-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FCg8cYszuoYWD5q8/3vP16HfcdRWCPy2vd8oOLjDWscqZXZhkBztBd04YE70nH+0 B/hync0RUhbLcBcINm4BeA== 0000898733-03-000461.txt : 20030905 0000898733-03-000461.hdr.sgml : 20030905 20030905163622 ACCESSION NUMBER: 0000898733-03-000461 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030905 EFFECTIVENESS DATE: 20030905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STRATEGIC PARTNERS EQUITY FUND INC CENTRAL INDEX KEY: 0000356683 IRS NUMBER: 133104589 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03336 FILM NUMBER: 03884174 BUSINESS ADDRESS: STREET 1: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 BUSINESS PHONE: 9733677473 MAIL ADDRESS: STREET 1: 100 MULBERRY STREET CITY: NEWARK STATE: NJ ZIP: 07102 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL EQUITY FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PRUDENTIAL BACHE EQUITY FUND INC DATE OF NAME CHANGE: 19920603 FORMER COMPANY: FORMER CONFORMED NAME: CHANCELLOR EQUITY FUND INC DATE OF NAME CHANGE: 19830509 N-CSR 1 mf16128ncsr.txt STRATEGIC PARTNERS EQUITY FUND, INC. -- 6/30/03 SEMIANNUAL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-3326 Exact name of registrant as specified in charter: Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) Address of principal executive offices: Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Name and address of agent for service: Marguerite E.H. Morrison Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Registrant's telephone number, including area code: 973-367-7525 Date of fiscal year end: December 31, 2003 Date of reporting period: June 30, 2003
Item 1 -- Reports to Stockholders Semiannual Report June 30, 2003 STRATEGIC PARTNERS Equity Fund [LOGO] Strategic Partners Objective: Long-Term Growth of Capital This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. The views expressed in this report and information about the Fund's portfolio holdings are for the period covered by this report and are subject to change thereafter. Strategic Partners Equity Fund Performance at a Glance FUND OBJECTIVE The Strategic Partners Equity Fund (the Fund) seeks long-term growth of capital. There can be no assurance that the Fund will achieve its investment objective.
Cumulative Total Returns(1) As of 6/30/03 Six Months One Year Five Years Ten Years Since Inception(2) Class A 11.91% -2.06% -13.68% 106.01% 233.86% Class B 11.46 -2.84 -16.88 91.04 1015.00 Class C 11.47 -2.83 -16.87 N/A 74.66 Class Z 11.92 -1.87 -12.63 N/A 38.40 S&P 500 Index(3) 11.75 0.25 -7.79 160.25 *** Russell 1000 Index(4) 12.34 0.95 -6.09 157.89 **** Lipper Large-Cap Core Funds Avg.(5) 10.38 -1.94 -12.13 121.88 *****
Average Annual Total Returns(1) As of 6/30/03 One Year Five Years Ten Years Since Inception(2) Class A -6.96% -3.89% 6.95% 8.97% Class B -7.70 -3.76 6.69 11.99 Class C -4.76 -3.82 N/A 6.34 Class Z -1.87 -2.66 N/A 4.53 S&P 500 Index(3) 0.25 -1.61 10.04 *** Russell 1000 Index(4) 0.95 -1.25 9.94 **** Lipper Large-Cap Core Funds Avg.(5) -1.94 -2.71 8.13 ***** Past performance is not indicative of future results. Principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. (1)Source: Prudential Investments LLC and Lipper Inc. The cumulative total returns do not take into account applicable sales charges. If reflected, the applicable sales charges would reduce the cumulative total return performance quoted. The average annual total returns do take into account applicable sales charges. Without the distribution and service (12b-1) fee waiver of 0.05% for Class A shares, the returns would have been lower. The Fund charges a maximum front-end sales charge of 5% for Class A shares and a 12b-1 fee of up to 0.30% annually. In some circumstances, Class A shares may not be subject to a front-end sales charge, but may be subject to a 1% contingent deferred sales charge (CDSC) for the first year. Class B shares are subject to a declining CDSC of 5%, 4%, 3%, 2%, 1%, and 1% respectively for the first six years after purchase and a 12b-1 fee of 1% annually. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Class C shares are subject to a front-end sales charge of 1%, a CDSC of 1% for shares redeemed within 18 months of purchase, and a 12b-1 fee of 1% annually. Class Z shares are not subject to a sales charge or 12b-1 fee. The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on fund distributions or following the redemption of fund shares. (2)Inception dates: Class A, 1/22/90; Class B, 3/15/82; Class C, 8/1/94; and Class Z, 3/1/96. (3)The Standard & Poor's 500 Composite Stock Price Index (S&P 500 Index) is an unmanaged index of 500 stocks of large www.strategicpartners.com (800) 225-1852 Semiannual Report June 30, 2003 U.S. public companies. It gives a broad look at how stock prices in the United States have performed. (4)The Russell 1000 Index is an unmanaged index that consists of the 1,000 largest securities in the Russell 3000 Index. (5)The Lipper Large-Cap Core Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper Large-Cap Core Funds category. Funds in the Lipper Average invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index. Large- cap core funds have more latitude with respect to the companies in which they invest. These funds typically have an average price-to-earnings ratio, price- to-book ratio, and three-year sales-per-share growth value, compared with the S&P 500 Index. Investors cannot invest directly in an index. The returns for the S&P 500 Index, the Russell 1000 Index, and the Lipper Average would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes. ***S&P 500 Index Closest Month-End to Inception cumulative total returns as of 6/30/03 are 297.74% for Class A, 1499.69% for Class B, 148.51% for Class C, and 70.53% for Class Z. S&P 500 Index Closest Month-End to Inception average annual total returns as of 6/30/03 are 10.84% for Class A, 13.94% for Class B, 10.75% for Class C, and 7.55% for Class Z. ****Russell 1000 Index Closest Month-End to Inception cumulative total returns as of 6/30/03 are 304.37% for Class A, 1446.39% for Class B, 148.01% for Class C, and 69.75% for Class Z. Russell 1000 Index Closest Month-End to Inception average annual total returns as of 6/30/03 are 10.98% for Class A, 13.75% for Class B, 10.72% for Class C, and 7.48% for Class Z. *****Lipper Average Closest Month-End to Inception cumulative total returns as of 6/30/03 are 246.70% for Class A, 1073.28% for Class B, 110.21% for Class C, and 49.11% for Class Z. Lipper Average Closest Month-End to Inception average annual total returns as of 6/30/03 are 9.54% for Class A, 11.97% for Class B, 8.52% for Class C, and 5.45% for Class Z. Five Largest Holdings Expressed as a percentage of net assets as of 6/30/03. 2.8% Microsoft Corp. Software 2.7 Pfizer, Inc. Pharmaceuticals 2.4 Amgen, Inc. Biotechnology 2.1 Intel Corp. Semiconductors & Semiconductor Equipment 2.0 American International Group, Inc. Insurance Holdings are subject to change. Five Largest Industries Expressed as a percentage of net assets as of 6/30/03. 10.5% Pharmaceuticals 6.9 Diversified Financials 6.5 Semiconductors & Semiconductor Equipment 6.1 Oil & Gas 5.7 Media Industries are subject to change. 1 [LOGO] Strategic Partners August 15, 2003 DEAR SHAREHOLDER, Stocks and bonds often move in opposite directions. However, for a period during the spring of 2003, both markets in the United States rallied in tandem. Recently, signs of stronger economic growth helped sustain the rise in equities but weighed heavily on bonds. Regardless of the direction of financial markets, it is important to remember that a wise investor plans today for tomorrow's needs. Current market activity should have little impact on planning for your long-term investment goals. Whether you are investing for your retirement, your children's education, or some other purpose, Strategic Partners mutual funds offer the resources and professional discipline of leading asset managers. Our team of experienced analysts selects firms that are widely respected by institutional and individual investors. These firms have established track records in the specific asset classes and management styles they offer in Strategic Partners funds. Our analysts continue to monitor their performance and their adherence to the investment processes that earned them their reputations. We recommend that you develop a diversified personal asset allocation strategy in consultation with a financial professional who knows you, who understands your reasons for investing, the time you have to reach your goals, and the amount of risk you are comfortable assuming. Strategic Partners mutual funds offer a wide range of investment choices, and your financial professional can help you choose the appropriate funds to implement your strategy. I was named president of the Strategic Partners Equity Fund in March 2003. Thank you for your confidence in Strategic Partners mutual funds. We look forward to serving your future investment needs. Sincerely, Judy A. Rice, President Strategic Partners Equity Fund 2 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited)
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- LONG-TERM INVESTMENTS 98.5% Common Stocks - ------------------------------------------------------------------------------------- Aerospace/Defense 1.5% 103,588 Boeing Co. $ 3,555,140 6,898 General Dynamics Corp. 500,105 41,011 Honeywell International, Inc. 1,101,145 365,082 Lockheed Martin Corp. 17,366,951 10,635 Northrop Grumman Corp. 917,694 18,806 Raytheon Co. 617,589 63,991 United Technologies Corp. 4,532,483 ---------------- 28,591,107 - ------------------------------------------------------------------------------------- Air Freight & Couriers 0.2% 6,624 FedEx Corp. 410,887 47,498 United Parcel Service, Inc. (Class B) 3,025,622 ---------------- 3,436,509 - ------------------------------------------------------------------------------------- Airlines 16,366 Southwest Airlines Co. 281,495 - ------------------------------------------------------------------------------------- Automobiles 1.2% 40,741 Ford Motor Co. 447,744 24,498 General Motors Corp. 881,928 254,192 Harley-Davidson, Inc. 10,132,093 27,733 Porsche AG 11,751,608 ---------------- 23,213,373 - ------------------------------------------------------------------------------------- Beverages 1.1% 42,272 Anheuser-Busch Companies, Inc. 2,157,986 108,942 Coca-Cola Co. 5,055,998 41,273 Pepsi Bottling Group, Inc. 826,285 280,009 PepsiCo, Inc. 12,460,401 ---------------- 20,500,670 - ------------------------------------------------------------------------------------- Biotechnology 3.9% 690,343 Amgen, Inc.(a) 45,866,389 14,374 Biogen, Inc.(a) 546,212
See Notes to Financial Statements 3 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 89,900 Cephalon, Inc.(a) $ 3,700,284 227,400 Gilead Sciences, Inc.(a) 12,638,892 304,283 MedImmune, Inc.(a) 11,066,773 ---------------- 73,818,550 - ------------------------------------------------------------------------------------- Building Products 0.3% 65,800 American Standard Cos., Inc.(a) 4,864,594 15,836 Masco Corp. 377,689 ---------------- 5,242,283 - ------------------------------------------------------------------------------------- Capital Markets 2.1% 243,805 Goldman Sachs Group, Inc. 20,418,669 423,095 Merrill Lynch & Co. 19,750,074 ---------------- 40,168,743 - ------------------------------------------------------------------------------------- Chemicals 0.3% 16,643 Air Products & Chemicals, Inc. 692,349 37,645 Dow Chemical Co. 1,165,489 43,104 E.I. du Pont de Nemours & Co. 1,794,851 12,412 Ecolab, Inc. 317,747 11,150 International Flavors & Fragrances, Inc. 356,019 6,657 PPG Industries, Inc. 337,776 15,478 Praxair, Inc. 930,228 14,320 Rohm & Haas Co. 444,350 ---------------- 6,038,809 - ------------------------------------------------------------------------------------- Commercial Banks 4.7% 196,975 Bank of America Corp. 15,566,934 371,696 Bank of New York Co., Inc. 10,686,260 464,851 Bank One Corp. 17,283,160 97,370 Fifth Third Bancorp 5,583,196 216,918 FleetBoston Financial Corp. 6,444,634 12,881 Golden West Financial Corp. 1,030,609 75,540 Mellon Financial Corp. 2,096,235 16,621 SunTrust Banks, Inc. 986,290 280,790 US Bancorp 6,879,355 150,553 Wachovia Corp. 6,016,098 51,126 Washington Mutual, Inc. 2,111,504
4 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 267,335 Wells Fargo & Co. $ 13,473,684 ---------------- 88,157,959 - ------------------------------------------------------------------------------------- Commercial Services & Supplies 0.5% 24,997 Automatic Data Processing, Inc. 846,398 55,322 Avery Dennison Corp. 2,777,164 63,042 Cendant Corp.(a) 1,154,930 15,582 Certegy, Inc.(a) 432,401 11,730 Cintas Corp. 415,711 37,642 Concord EFS, Inc.(a) 554,090 16,875 Fiserv, Inc.(a) 600,919 8,920 H&R Block, Inc. 385,790 15,478 Pitney Bowes, Inc. 594,510 41,873 Waste Management, Inc. 1,008,721 ---------------- 8,770,634 - ------------------------------------------------------------------------------------- Communications Equipment 2.6% 1,656,717 Cisco Systems, Inc.(a) 27,650,607 175,800 Comverse Technology, Inc.(a) 2,642,274 72,327 Corning, Inc.(a) 534,496 43,920 Lucent Technologies, Inc.(a) 89,158 110,306 Motorola, Inc. 1,040,186 1,029,700 Nokia Corp. ADR (Finland) 16,917,971 34,550 QUALCOMM, Inc. 1,235,162 ---------------- 50,109,854 - ------------------------------------------------------------------------------------- Computer & Peripherals 3.8% 406,815 Dell Computer Corp.(a) 13,001,807 120,620 EMC Corp.(a) 1,262,891 1,639,898 Hewlett-Packard Co. 34,929,828 230,962 IBM Corp. 19,054,365 2,931 Lexmark International, Inc.(a) 207,427 675,552 Sun Microsystems, Inc.(a) 3,107,539 ---------------- 71,563,857
See Notes to Financial Statements 5 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Consumer Finance 1.8% 673,765 American Express Co. $ 28,170,115 147,639 SLM Corp. 5,783,020 ---------------- 33,953,135 - ------------------------------------------------------------------------------------- Containers & Packaging 0.8% 2,696 Bemis Co., Inc. 126,173 14,346 Pactiv Corp.(a) 282,759 168,000 Smurfit-Stone Container Corp.(a) 2,189,040 303,200 Temple-Inland, Inc.(b) 13,010,312 ---------------- 15,608,284 - ------------------------------------------------------------------------------------- Diversified Financial Services 3.0% 79,518 Charles Schwab Corp. 802,337 620,662 Citigroup, Inc. 26,564,333 17,391 Countrywide Financial Corp. 1,209,892 77,723 Fannie Mae 5,241,639 95,279 Freddie Mac 4,837,315 258,333 JP Morgan Chase & Co. 8,829,822 12,196 Lehman Brothers Holdings, Inc. 810,790 189,424 MBNA Corp. 3,947,596 61,875 Morgan Stanley 2,645,156 52,019 State Street Corp. 2,049,549 ---------------- 56,938,429 - ------------------------------------------------------------------------------------- Diversified Telecommunication Services 1.4% 12,315 ALLTEL Corp. 593,829 35,528 AT&T Corp. 683,914 283,609 BellSouth Corp. 7,552,508 155,474 SBC Communications, Inc. 3,972,361 22,513 Sprint Corp. (FON Group) 324,187 348,143 Verizon Communications, Inc. 13,734,241 ---------------- 26,861,040 - ------------------------------------------------------------------------------------- Electric Utilities 2.6% 19,971 American Electric Power Co., Inc. 595,735 112,500 Consolidated Edison, Inc. 4,869,000 29,956 Dominion Resources, Inc. 1,925,272
6 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 26,628 Entergy Corp. $ 1,405,426 93,756 Exelon Corp. 5,607,546 316,093 FirstEnergy Corp. 12,153,776 14,979 FPL Group, Inc. 1,001,346 126,414 Progress Energy, Inc. 5,549,575 13,314 Public Service Enterprise Group, Inc. 562,516 46,599 Southern Co. 1,452,025 544,735 TXU Corp.(b) 12,229,301 78,300 Xcel Energy, Inc.(a) 1,177,632 ---------------- 48,529,150 - ------------------------------------------------------------------------------------- Electrical Equipment 0.1% 14,246 Emerson Electric Co. 727,970 18,110 Molex, Inc. (Class A) 419,772 ---------------- 1,147,742 - ------------------------------------------------------------------------------------- Electronic Equipment & Instruments 0.3% 264,169 Agilent Technologies, Inc.(a) 5,164,504 7,774 Jabil Circuit, Inc.(a) 171,805 ---------------- 5,336,309 - ------------------------------------------------------------------------------------- Energy Equipment & Services 2.5% 9,986 Baker Hughes, Inc. 335,230 409,000 BJ Services Co.(a) 15,280,240 129,100 ENSCO International, Inc. 3,472,790 21,669 Halliburton Co. 498,387 11,650 Nabors Industries Ltd. (Barbados)(a) 460,757 15,810 Noble Corp.(a) 542,283 187,751 Schlumberger Ltd. 8,931,315 606,500 Transocean Sedco Forex, Inc.(a) 13,324,805 110,614 Weatherford International Ltd.(a) 4,634,727 ---------------- 47,480,534 - ------------------------------------------------------------------------------------- Food & Staples Retailing 2.8% 6,819 CVS Corp. 191,136 66,570 Kroger Co.(a) 1,110,388 289,602 Safeway, Inc.(a) 5,925,257 54,907 SYSCO Corp. 1,649,406
See Notes to Financial Statements 7 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 27,627 Walgreen Co. $ 831,573 690,960 Wal-Mart Stores, Inc.(d) 37,083,823 144,800 Whole Foods Market, Inc.(a) 6,882,344 ---------------- 53,673,927 - ------------------------------------------------------------------------------------- Food Products 0.5% 31,765 Campbell Soup Co. 778,242 45,501 ConAgra Foods, Inc. 1,073,824 28,559 General Mills, Inc. 1,353,982 10,618 Hershey Foods Corp. 739,650 5,775 Kellogg Co. 198,487 147,000 Kraft Foods, Inc. (Class A) 4,784,850 ---------------- 8,929,035 - ------------------------------------------------------------------------------------- Gas Utilities 0.2% 12,948 Kinder Morgan, Inc. 707,608 169,900 NiSource, Inc. 3,228,100 ---------------- 3,935,708 - ------------------------------------------------------------------------------------- Healthcare Equipment & Supplies 0.9% 21,635 Baxter International, Inc. 562,510 24,964 Boston Scientific Corp.(a) 1,525,300 80,300 Guidant Corp. 3,564,517 210,013 Medtronic, Inc. 10,074,324 6,819 Smith & Nephew PLC ADR (United Kingdom) 395,502 9,790 Zimmer Holdings, Inc.(a) 441,040 ---------------- 16,563,193 - ------------------------------------------------------------------------------------- Healthcare Providers & Services 0.5% 52,506 Cardinal Health, Inc. 3,376,136 23,300 CIGNA Corp. 1,093,702 44,935 HCA, Inc. 1,439,717 8,321 Quest Diagnostics, Inc.(a) 530,880 39,942 UnitedHealth Group, Inc. 2,007,085 27,226 WebMD Corp.(a) 294,858 ---------------- 8,742,378
8 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Hotels Restaurants & Leisure 1.6% 30,789 Carnival Corp. $ 1,000,950 16,875 Darden Restaurants, Inc. 320,288 4,193 Harrah's Entertainment, Inc.(a) 168,726 4,260 International Game Technology, Inc.(a) 435,926 232,479 Marriott International, Inc. (Class A) 8,931,843 318,550 McDonald's Corp. 7,027,213 93,900 MGM Mirage, Inc.(a) 3,209,502 318,100 Wendy's International, Inc. 9,215,357 ---------------- 30,309,805 - ------------------------------------------------------------------------------------- Household Durables 0.3% 3,628 American Greetings Corp. (Class A)(a) 71,254 4,367 Black & Decker Corp. 189,746 2,729 Centex Corp. 212,289 80,656 Fortune Brands, Inc. 4,210,243 2,297 KB HOME 142,368 9,751 Leggett & Platt, Inc. 199,896 4,131 Maytag Corp. 100,879 12,881 Newell Rubbermaid, Inc. 360,668 2,829 Pulte Homes, Inc. 174,436 3,246 Snap-on, Inc. 94,231 4,599 Stanley Works 126,933 3,487 Tupperware Corp. 50,073 3,388 Whirlpool Corp. 215,816 ---------------- 6,148,832 - ------------------------------------------------------------------------------------- Household Products 1.2% 26,628 Clorox Co. 1,135,684 36,614 Colgate-Palmolive Co. 2,121,781 183,573 Kimberly-Clark Corp. 9,571,496 105,774 Procter & Gamble Co. 9,432,926 ---------------- 22,261,887 - ------------------------------------------------------------------------------------- Industrial Conglomerates 1.7% 132,417 3M Co. 17,079,145 222,600 General Electric Co. 6,384,168
See Notes to Financial Statements 9 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 11,550 Textron, Inc. $ 450,681 440,946 Tyco International Ltd. (Bermuda) 8,369,155 ---------------- 32,283,149 - ------------------------------------------------------------------------------------- Insurance 5.0% 32,187 ACE Ltd. 1,103,692 15,438 AFLAC, Inc. 474,719 50,626 Allstate Corp. 1,804,817 9,986 Ambac Financial Group, Inc. 661,573 688,696 American International Group, Inc. 38,002,245 3,916 Aon Corp. 94,297 37 Berkshire Hathaway, Inc. (Class A)(a) 2,682,500 18,400 Chubb Corp. 1,104,000 256,728 Hartford Financial Services Group, Inc.(b) 12,928,822 21,935 John Hancock Financial Services, Inc. 674,063 18,264 Lincoln National Corp. 650,746 245,800 Loews Corp. 11,623,882 116,415 Marsh & McLennan Companies, Inc. 5,945,314 95,295 MetLife, Inc. 2,698,754 5,651 Platinum Underwriters Holdings Ltd. 153,368 85,549 Travelers Property Casualty Corp. (Class B) 1,349,108 145,300 XL Capital Ltd. (Class A) (Bermuda) 12,059,900 ---------------- 94,011,800 - ------------------------------------------------------------------------------------- Internet & Catalog Retail 0.5% 91,524 eBay, Inc.(a) 9,534,970 - ------------------------------------------------------------------------------------- Internet Software & Services 26,387 Yahoo!, Inc.(a) 864,438 - ------------------------------------------------------------------------------------- IT Services 1.7% 19,605 Affiliated Computer Services, Inc. (Class A)(a) 896,537 332,359 Electronic Data Systems Corp. 7,129,100 315,337 First Data Corp. 13,067,565 366,200 Paychex, Inc. 10,733,322 51,500 Unisys Corp.(a) 632,420 ---------------- 32,458,944
10 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Leisure Equipment & Products 14,080 Eastman Kodak Co. $ 385,088 24,345 Mattel, Inc. 460,607 ---------------- 845,695 - ------------------------------------------------------------------------------------- Machinery 0.8% 16,742 Caterpillar, Inc. 931,860 47,900 Cummins, Inc. 1,719,131 42,938 Danaher Corp. 2,921,931 22,584 Deere & Co. 1,032,089 23,233 Dover Corp. 696,061 7,323 Eaton Corp. 575,661 18,873 Illinois Tool Works, Inc. 1,242,787 7,639 Ingersoll-Rand Co. (Class A) (Bermuda) 361,477 102,900 Navistar International Corp.(a) 3,357,627 43,050 PACCAR, Inc. 2,908,458 ---------------- 15,747,082 - ------------------------------------------------------------------------------------- Media 5.7% 219,681 AOL Time Warner, Inc.(a) 3,534,667 227,147 Clear Channel Communications, Inc.(a) 9,628,761 263,301 Comcast Corp. (Class A)(a) 7,946,424 232,634 Comcast Corp. (Special Class A)(a) 6,706,839 12,915 Gannett Co., Inc. 992,001 133,300 InterActiveCorp(a) 5,274,681 397,932 Liberty Media Corp. (Class A)(a) 4,600,094 9,386 McGraw-Hill Cos., Inc. 581,932 162,150 New York Times Co. (Class A) 7,377,825 349,400 News Corp. Ltd. ADR (Australia) 8,752,470 166,310 Omnicom Group, Inc. 11,924,427 14,645 Tribune Co. 707,354 191,500 Univision Communications, Inc. (Class A)(a)(b) 5,821,600 753,347 Viacom, Inc. (Class B)(a) 32,891,130 73,859 Walt Disney Co. 1,458,715 ---------------- 108,198,920
See Notes to Financial Statements 11 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Metals & Mining 5.4% 1,100,430 Alcoa, Inc. $ 28,060,965 128,194 Barrick Gold Corp. 2,294,673 657,000 Companhia Vale do Rio Doce ADR (Brazil) 19,486,620 1,241,695 Freeport-McMoRan Copper & Gold, Inc. (Class B)(b) 30,421,528 703,688 Newmont Mining Corp. 22,841,712 ---------------- 103,105,498 - ------------------------------------------------------------------------------------- Multi-line Retail 1.0% 207,355 Costco Wholesale Corp.(a) 7,589,193 8,524 Family Dollar Stores, Inc. 325,191 146,839 Federated Department Stores, Inc. 5,411,017 18,906 Kohl's Corp.(a) 971,390 8,729 Sears, Roebuck & Co. 293,644 91,532 Target Corp. 3,463,571 ---------------- 18,054,006 - ------------------------------------------------------------------------------------- Multi-Utilities 16,643 Duke Energy Co. 332,028 31,511 Mirant Corp.(a) 91,382 ---------------- 423,410 - ------------------------------------------------------------------------------------- Oil & Gas 6.1% 149,625 Apache Corp. 9,734,602 11,650 BP PLC ADR (United Kingdom) 489,533 24,298 Burlington Resources, Inc. 1,313,793 146,749 ChevronTexaco Corp. 10,595,278 44,620 ConocoPhillips 2,445,176 16,443 Devon Energy Corp. 878,056 20,637 Encana Corp. 791,842 740,079 Exxon Mobil Corp.(d) 26,576,237 289,400 Kerr-McGee Corp. 12,965,120 74,000 Occidental Petroleum Corp. 2,482,700 758,500 Suncor Energy, Inc.(a) 14,145,641 430,000 TotalFinaElf SA ADR (France) 32,594,000 ---------------- 115,011,978
12 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- Paper & Forest Products 0.9% 421,529 International Paper Co.(b) $ 15,061,231 14,446 MeadWestvaco Corp. 356,816 14,512 Weyerhaeuser Co. 783,648 ---------------- 16,201,695 - ------------------------------------------------------------------------------------- Personal Products 1.1% 195,800 Avon Products, Inc. 12,178,760 196,200 Estee Lauder Cos., Inc. (Class A) 6,578,586 43,271 Gillette Co. 1,378,614 ---------------- 20,135,960 - ------------------------------------------------------------------------------------- Pharmaceuticals 10.5% 577,313 Abbott Laboratories 25,263,217 141,000 Allergan, Inc. 10,871,100 223,000 AstraZeneca PLC ADR (United Kingdom) 9,091,710 43,271 Bristol-Myers Squibb Co. 1,174,808 48,885 Eli Lilly & Co. 3,371,598 19,305 Forest Laboratories, Inc.(a) 1,056,949 523,918 Johnson & Johnson 27,086,561 190,526 Merck & Co., Inc. 11,536,349 106,150 Mylan Laboratories, Inc. 3,690,835 1,500,716 Pfizer, Inc.(d) 51,249,451 391,700 Schering-Plough Corp. 7,285,620 526,300 Sepracor, Inc.(a) 9,489,189 499,400 Teva Pharmaceutical Industries Ltd. ADR (Israel) 28,430,842 8,557 Watson Pharmaceuticals, Inc.(a) 345,446 207,181 Wyeth 9,437,095 ---------------- 199,380,770 - ------------------------------------------------------------------------------------- Real Estate Investment Trust 0.1% 43,000 iStar Financial, Inc. 1,569,500 23,899 Simon Property Group, Inc. 932,778 ---------------- 2,502,278 - ------------------------------------------------------------------------------------- Road & Rail 0.3% 36,580 Burlington Northern, Inc. 1,040,335
See Notes to Financial Statements 13 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 81,400 Canadian National Railway Co. (Canada) $ 3,928,364 22,900 Union Pacific Corp. 1,328,658 ---------------- 6,297,357 - ------------------------------------------------------------------------------------- Semiconductors & Semiconductor Equipment 6.5% 624,400 Altera Corp.(a) 10,240,160 29,857 Analog Devices, Inc.(a) 1,039,621 745,828 Applied Materials, Inc.(a) 11,828,832 308,400 ASML Holding NV (Netherlands)(a) 2,948,304 17,521 Axcelis Technologies, Inc.(a) 107,228 10,267 Broadcom Corp.(a) 255,751 266,900 Infineon Technologies AG ADR (Germany)(a) 2,559,571 1,929,343 Intel Corp. 40,099,465 224,934 KLA-Tencor Corp.(a)(b) 10,457,182 12,015 Linear Technology Corp. 387,003 144,300 LSI Logic Corp.(a) 1,021,644 27,160 Maxim Integrated Products, Inc. 928,600 9,020 Microchip Technology, Inc. 222,163 21,169 Micron Technology, Inc.(a) 246,195 293,600 Novellus Systems, Inc.(a) 10,751,926 549,500 STMicroelectronics NV (Switzerland) 11,424,105 982,487 Texas Instruments, Inc. 17,291,771 28,925 Xilinx, Inc.(a) 732,092 ---------------- 122,541,613 - ------------------------------------------------------------------------------------- Software 4.5% 2,090 Adobe Systems, Inc. 67,026 309,764 BMC Software, Inc.(a) 5,058,446 1,512 Electronic Arts, Inc.(a) 111,873 27,999 Intuit, Inc.(a) 1,246,796 2,070,061 Microsoft Corp. 53,014,262 632,155 Oracle Corp.(a) 7,598,503 8,632 PeopleSoft, Inc.(a) 151,837 336,000 SAP AG ADR (Germany)(b) 9,817,920 43,986 Siebel Systems, Inc.(a) 419,626 1,587 Symantec Corp.(a) 69,606 695 Synopsys, Inc.(a) 42,986
14 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- 290,745 VERITAS Software Corp.(a) $ 8,335,659 ---------------- 85,934,540 - ------------------------------------------------------------------------------------- Specialty Retail 2.3% 15,445 AutoNation, Inc.(a) 242,795 9,520 Bed Bath & Beyond, Inc.(a) 369,471 288,369 Best Buy Co., Inc.(a) 12,665,167 465,308 CarMax, Inc.(a) 14,029,036 40,974 Gap, Inc. 768,672 424,791 Home Depot, Inc. 14,069,078 52,790 Lowe's Cos., Inc. 2,267,331 ---------------- 44,411,550 - ------------------------------------------------------------------------------------- Textiles & Apparel 11,916 NIKE, Inc. (Class B) 637,387 - ------------------------------------------------------------------------------------- Tobacco 0.5% 222,474 Altria Group, Inc. 10,109,219 - ------------------------------------------------------------------------------------- Wireless Telecommunication Services 1.2% 958,806 AT&T Wireless Services, Inc.(a) 7,871,797 49,361 Nextel Communications, Inc. (Class A)(a) 892,447 51,144 Sprint Corp. (PCS Group) 294,078 681,882 Vodafone Group PLC ADR (United Kingdom)(b) 13,398,981 ---------------- 22,457,303 ---------------- Total long-term investments (cost $1,836,807,143) 1,867,462,793 ----------------
See Notes to Financial Statements 15 Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd.
Shares Description Value (Note 1) - ---------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS 5.6% Mutual Fund 4.8% 90,647,932 Prudential Core Investment Fund-Taxable Money Market Series (cost $90,647,932; Note 3)(c) $ 90,647,932 ---------------- Principal Amount (000) - ---------------------------------------------------------------------------------------- Repurchase Agreement 0.8% $ 15,805 Joint Repurchase Agreement Account, 1.25%, 7/01/03, (cost $15,805,000; Note 6) 15,805,000 ---------------- Total short-term investments (cost $106,452,932) 106,452,932 ---------------- Contracts - ---------------------------------------------------------------------------------------- Outstanding Option Purchased(a) - ------------------------------------------------------------------------------------- Put Option 590 AstraZeneca PLC expiring 7/19/03 @$40.00 (cost $26,550) 55,342 ---------------- Total Investments before Outstanding Option Written 104.1% (cost $1,943,286,625; Note 5) 1,973,971,067 ---------------- Shares - ---------------------------------------------------------------------------------------- Outstanding Option Written(a) - ------------------------------------------------------------------------------------- Call Option (590) AstraZeneca PLC expiring 7/18/03 @$50.00 (premiums received $5,900) (531) ---------------- Total Investments, Net of Outstanding Option Written 104.1% (cost $1,943,280,725) 1,973,970,536 Liabilities in excess of other assets (4.1%) (77,480,046) ---------------- Net Assets 100% $ 1,896,490,490 ---------------- ----------------
16 See Notes to Financial Statements Strategic Partners Equity Fund Portfolio of Investments as of June 30, 2003 (Unaudited) Cont'd. (a) Non-income producing security. (b) Portion of securities on loan, see Note 4. (c) Represents security, or portion thereof, purchased with cash collateral received for securities on loan. (d) Portion of securities segregated as collateral for financial futures contracts. ADR--American Depository Receipt. See Notes to Financial Statements 17 Strategic Partners Equity Fund Statement of Assets and Liabilities (Unaudited)
June 30, 2003 - --------------------------------------------------------------------------------------- ASSETS Investments, at value including securities on loan of $66,856,408 (cost $1,943,286,625) $ 1,973,971,067 Foreign currency, at value (cost $23,654) 23,725 Receivable for investments sold 7,521,802 Receivable for Fund shares sold 1,922,974 Dividends and interest receivable 1,519,987 Tax reclaim receivable 172,931 Receivable for securities lending income (gross) 65,930 Prepaid expenses and other assets 50,713 Due from broker-variation margin 470 ----------------- Total assets 1,985,249,599 ----------------- LIABILITIES Collateral for securities on loan 69,472,303 Payable for investments purchased 12,764,835 Payable for Fund shares reacquired 3,592,801 Accrued expenses and other liabilities 1,401,697 Management fee payable 747,637 Distribution fee payable 676,046 Security lending rebate payable 55,477 Deferred director's fee payable 16,178 Payable to custodian 15,367 Foreign withholding taxes payable 13,624 Payable to securities lending agent 2,613 Outstanding option written (premiums received $5,900) 531 ----------------- Total liabilities 88,759,109 ----------------- NET ASSETS $ 1,896,490,490 ----------------- ----------------- Net assets were comprised of: Common stock, at par $ 1,577,191 Paid-in capital in excess of par 2,389,590,076 ----------------- 2,391,167,267 Undistributed net investment income 624,174 Accumulated net realized loss on investments and foreign currency transactions (525,921,191) Net unrealized appreciation on investments and foreign currencies 30,620,240 ----------------- Net assets, June 30, 2003 $ 1,896,490,490 ----------------- -----------------
18 See Notes to Financial Statements Strategic Partners Equity Fund Statement of Assets and Liabilities (Unaudited) Cont'd.
June 30, 2003 - --------------------------------------------------------------------------------------- Class A: Net asset value and redemption price per share ($1,300,599,453 / 107,771,933 shares of common stock issued and outstanding) $12.07 Maximum sales charge (5% of offering price) .64 ----------------- Maximum offering price to public $12.71 ----------------- ----------------- Class B: Net asset value, offering price and redemption price per share ($421,681,287 / 35,466,204 shares of common stock issued and outstanding) $11.89 ----------------- ----------------- Class C: Net asset value and redemption price per share ($39,745,373 / 3,342,976 shares of common stock issued and outstanding) $11.89 Sales charge (1% of offering price) .12 ----------------- Offering price to public $12.01 ----------------- ----------------- Class Z: Net asset value, offering price and redemption price per share ($134,464,377 / 11,138,021 shares of common stock issued and outstanding) $12.07 ----------------- -----------------
See Notes to Financial Statements 19 Strategic Partners Equity Fund Statement of Operations (Unaudited)
Six Months Ended June 30, 2003 - -------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Dividends (net of foreign withholding taxes of $372,406) $ 14,085,869 Interest 107,653 Income from securities lending (net) 90,049 ------------- Total income 14,283,571 ------------- Expenses Management fee 4,210,413 Distribution fee--Class A 1,459,183 Distribution fee--Class B 2,268,173 Distribution fee--Class C 187,241 Transfer agent's fees and expenses 2,114,000 Reports to shareholders 435,000 Custodian's fees and expenses 148,000 Registration fees 44,000 Legal fees and expenses 25,000 Audit fees 16,000 Directors' fees 16,000 Miscellaneous 43,708 ------------- Total expenses 10,966,718 ------------- Net investment income 3,316,853 ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES Net realized gain (loss) on: Investment transactions (126,628,647) Financial futures contracts 1,436,032 Foreign currency transactions (18,736) ------------- (125,211,351) ------------- Net change in unrealized appreciation (depreciation) on: Investments 323,725,733 Written options 5,369 Foreign currencies 768 Financial futures contracts 75,272 ------------- 323,807,142 ------------- Net gain on investments and foreign currencies 198,595,791 ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 201,912,644 ------------- -------------
20 See Notes to Financial Statements Strategic Partners Equity Fund Statement of Changes in Net Assets (Unaudited)
Six Months Year Ended Ended June 30, 2003 December 31, 2002 - ---------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income $ 3,316,853 $ 3,986,149 Net realized loss on investments and foreign currency transactions (125,211,351) (330,203,372) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 323,807,142 (302,772,991) -------------- ----------------- Net increase (decrease) in net assets resulting from operations 201,912,644 (628,990,214) -------------- ----------------- Dividends from net investment income (Note 1) Class A (3,913,491) (1,563,351) Class B (92,602) -- Class C (11,802) -- Class Z (569,666) (550,783) -------------- ----------------- (4,587,561) (2,114,134) -------------- ----------------- Fund share transactions (net of share conversions) (Note 7) Proceeds from shares sold 54,175,504 169,938,529 Net asset value of shares issued in reinvestment of dividends and distributions 4,397,452 2,037,372 Cost of shares reacquired (192,906,100) (635,561,417) -------------- ----------------- Net decrease in net assets from Fund share transactions (134,333,144) (463,585,516) -------------- ----------------- Total increase (decrease) 62,991,939 (1,094,689,864) NET ASSETS Beginning of period 1,833,498,551 2,928,188,415 -------------- ----------------- End of period(a) $1,896,490,490 $ 1,833,498,551 -------------- ----------------- -------------- ----------------- - --------------- (a) Includes undistributed net investment income $ 624,174 $ 1,894,882 -------------- -----------------
See Notes to Financial Statements 21 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Prudential Equity Fund, Inc., doing business as Strategic Partners Equity Fund (the 'Fund'), is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The investment objective of the Fund is long-term growth of capital. The Fund invests primarily in common stocks of major, established corporations. Note 1. Accounting Policies The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. Securities Valuation: Securities listed on a securities exchange are valued at the last sale price on such exchange on the day of valuation or, if there was no sale on such day, at the mean between the last reported bid and asked prices, or at the last bid price on such day in the absence of an asked price. Securities traded via NASDAQ are valued at the official closing price as provided by NASDAQ. Securities traded in the over-the-counter market, including securities listed on exchanges whose primary market is believed to be over-the-counter, are valued at market value using prices provided by an independent pricing agent or principal market maker. Futures contracts and options thereon traded on a commodities exchange or board of trade are valued at the last sale price at the close of trading on such exchange or board of trade or, if there was no sale on the applicable commodities exchange or board of trade on such day, at the mean between the most recently quoted bid and asked prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Securities for which reliable market quotations are not readily available or for which the pricing agent or market maker does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgement of the subadviser, does not represent fair value, are valued at fair value by a Valuation Committee appointed by the Board of Trustees, in consultation with the Manager or subadviser. Investments in mutual funds are valued at their net asset value as of the close of the New York Stock Exchange on the date of valuation. 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. Repurchase Agreements: In connection with transactions in repurchase agreements with U.S. financial institutions, it is the Fund's policy that its custodian or designated subcustodians under triparty repurchase agreements, as the case may be, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the 22 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. 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 rate 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 fiscal 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 securities held at the end of the fiscal period. 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 portfolio securities sold during the period. Accordingly, realized foreign currency gains (losses) are included in the reported net realized gains (losses) on investment transactions. Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from the holding of foreign currencies, currency gains (losses) realized between the trade date and settlement date on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains (losses) from valuing foreign currency denominated assets and liabilities (other than investments) 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 domestic origin as a result of, among other factors, the possibility of political and economic instability or the level of governmental supervision and regulation of foreign securities markets. 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, 23 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Fund writes an option, it receives a premium and an amount equal to that premium is recorded as a liability. The asset 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 recorded as an adjustment to the proceeds from the sale or the cost 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 (or loss) on investment transactions. Gain (or loss) on written options is presented separately as net realized gain (or loss) on options written. The Fund, as writer of an option, may have no control over whether the underlying securities 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 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. 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 existing portfolio securities, or securities the Fund intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or market conditions. 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. 24 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. Financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized and unrealized gains (losses) on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Expenses are recorded on the accrual basis which may require the use of certain estimates by management. Net investment income (loss) (other than distribution fees) and unrealized and realized 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. Securities Lending: The Fund may lend its portfolio securities to qualified institutions. 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, net of any rebate and securities lending fees, for lending its securities in the form of interest or dividend on the collateral received for the securities loaned. The Fund is entitled to any gain or loss in the market price of the securities loaned that may occur during the term of the loan. Dividends and Distributions: Dividends from net investment income are declared and paid semi-annually. The Fund will distribute at least annually net capital gains in excess of capital loss carryforwards, if any. 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. 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 net income and net capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates. Note 2. Agreements The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises each subadviser's performance of such services. Pursuant to subadvisers agreements between PI and each of Jennison Associates LLC ('Jennison'), GE Asset Management, Inc., ('GEAM') and Salomon Brothers Asset Management, Inc. ('Salomon'), these subadvisers are 25 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. responsible for the day-to-day management of each portion of the Fund they manage with Jennison managing approximately half of the assets and the other two subadvisers each managing approximately 25% of assets. PI pays for the services of Jennison, GEAM and Salomon, 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 to PI is computed daily and payable monthly, at an annual rate of .50 of 1% of the Fund's average daily net assets up to $500 million, .475 of 1% of the next $500 million of average daily net assets and .45 of 1% of the Fund's average daily net assets in excess of $1 billion. The Fund has a distribution agreement with Prudential Investment Management Services LLC ('PIMS') which acts as the distributor of the Class A, Class B, Class C and Class Z shares. The Fund compensates PIMS 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 PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Fund. Pursuant to the Class A, B and C Plans, the Fund compensates PIMS for distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively. Such expenses under the Class A, Class B and Class C Plans were .25%, 1% and 1% of the average daily net assets of Class A, Class B and Class C shares for the six months ended June 30, 2003, respectively. PIMS has advised the Fund that it has received approximately $107,100 and $6,000 in front-end sales charges resulting from sales of Class A and Class C shares, respectively, during the six months ended June 30, 2003. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs. PIMS has advised the Fund that for the six months ended June 30, 2003, it received approximately $318,800 and $900 in contingent deferred sales charges imposed upon certain redemptions by certain Class B and Class C shareholders, respectively. PI, PIMS and Jennison are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. ('Prudential'). The Fund, along with other affiliated registered investment companies (the 'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of banks. For the six months ended June 30, 2003, the amount of the commitment was $800 26 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. million from January 1, 2003 through May 2, 2003 and allows the Fund to increase the commitment to $1 billion, if necessary. Interest on any borrowings under the SCA will be incurred at market rates. The Funds pay a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued and paid quarterly and is allocated to the Funds pro rata, based on net assets. The purpose of the SCA is to serve as an alternative source of funds to facilitate capital share redemptions. On May 2, 2003, the SCA was renewed under the same terms and conditions ('May 2003 renewal'). The expiration date of the May 2003 renewal is April 30, 2004. The Fund did not borrow any amounts pursuant to the SCA during the six months ended June 30, 2003. Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an a indirect wholly owned subsidiary of Prudential, serves as the Fund's transfer agent. During the six months ended June 30, 2003, the Fund incurred fees of approximately $1,462,000 for the services of PMFS. As of June 30, 2003, approximately $234,000 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 nonaffiliates. The Fund pays networking fees to affiliated and unaffiliated broker/dealers. These networking fees are payments made to broker/dealers that clear mutual fund transactions through a national clearing system. The Fund incurred approximately $146,000 in total networking fees, of which the amount relating to the services of Prudential Securities, Inc. ('PSI'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential was approximately $137,000 for the six months ended June 30, 2003. As of June 30, 2003, approximately $22,200 of such fees were due to PSI. These amounts are included in transfer agent's fees and expenses in the Statement of Operations. For the six months ended June 30, 2003, PSI earned $7,419 in brokerage commissions from portfolio transactions executed on behalf of the Fund. PSI was the securities lending agent for the Fund. Effective July 1, 2003, Prudential Investment Management, Inc. ('PIM'), an indirect, wholly-owned subsidiary of Prudential is the Fund's securities lending agent. For the six months ended June 30, 2003, PIM has been compensated by the Fund approximately $30,000 for these services of which $2,600 is payable at June 30, 2003. Effective July 1, 2003, PSI became a division of Wachovia Securities LLC of which Prudential holds a minority interest. The Fund invested in the Taxable Money Market Series, a portfolio of Prudential Core Investment Fund, pursuant to an exemptive order received from the Securities 27 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. and Exchange Commission. The Taxable Money Market Series is a money market fund registered under the Investment Company Act of 1940, as amended, and managed by PI. For the six months ended June 30, 2003, the Fund earned income of approximately $153,000 and $285,700 from the Taxable Money market Series by investing its excess cash and collateral received from securities lending respectively. Note 4. Portfolio Securities Purchases and sales of investment securities, other than short-term investments, for the six months ended June 30, 2003 aggregated $475,161,381 and $594,679,699, respectively. As of June 30, 2003, the Fund had securities on loan with an aggregate market value of $66,856,408. The Fund received $69,472,303 in cash as collateral for securities on loan which was used to purchase highly liquid short-term investments in accordance with the Fund's securities lending procedures. During the six months ended June 30, 2003, the Fund entered into financial futures contracts. Details of open contracts at June 30, 2003 are as follows:
Value at Value at Number of Expiration Trade June 30, Unrealized Contracts Type Date Date 2003 Depreciation - --------- ----------------- ----------- ----------- ------------ --------------- Long Position: 43 S&P 500 Sep 2003 $10,533,578 $ 10,462,975 $ (70,603)
Note 5. Tax Information For federal income tax purposes, the Fund had a capital loss carryforward at December 31, 2002, of approximately $330,563,800 of which $5,750,100 expires in 2009 and $324,813,700 expires in 2010. Accordingly, no capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carry-forward. The Fund elected to treat post-October capital losses and currency losses from the prior fiscal year of approximately $10,299,254 and $36,519, respectively as being incurred in the current fiscal year. The United States federal income tax basis of the Fund's investments and the net unrealized appreciation as of June 30, 2003 were as follows: Net Unrealized Tax Basis Appreciation Depreciation Depreciation - --------------- ---------------- ---------------- ---------------- $1,951,946,780 $162,425,375 $(209,873,922) $(47,448,547) The difference between book basis and tax basis is primarily attributable to the deferred losses on wash sales. 28 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. Note 6. 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, 2003, the Fund had a 7.3% undivided interest in the joint account. The undivided interest for the Fund represents $15,805,000 in principal amount. As of such date, each repurchase agreement in the joint account and the collateral therefore were as follows: Bank of America Securities, 1.26%, in the principal amount of $72,637,000, repurchase price $72,639,542, due 7/1/03. The value of the collateral including accrued interest was $74,089,740. Bear Stearns & Co., Inc., 1.24%, in the principal amount of $72,636,000, repurchase price $72,638,502, due 7/1/03. The value of the collateral including accrued interest was $74,089,944. State Street Corp., 1.25%, in the principal amount of $72,637,000, repurchase price $72,639,522, due 7/1/03. The value of the collateral including accrued interest was $74,096,024. Note 7. Capital The Fund 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 5%. Class B shares are sold with a contingent deferred sales charge which declines from 5% 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 will automatically convert to Class A shares on a quarterly basis approximately seven 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 charge and are offered exclusively for sale to a limited group of investors. There are 1 billion shares of common stock, $.01 par value per share, divided into four classes, designated Class A, Class B, Class C and Class Z common stock, each of which consists of 250 million authorized shares. 29 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd. Transactions in shares of common stock were as follows:
Class A Shares Amount - -------------------------------------------------------- ------------ ------------- Six months ended June 30, 2003: Shares sold 2,662,405 $ 29,536,833 Shares issued in reinvestment of dividends 323,817 3,730,372 Shares reacquired (10,927,740) (120,463,681) ------------ ------------- Net increase (decrease) in shares outstanding before conversions (7,941,518) (87,196,476) Shares issued upon conversion from Class B 7,463,022 85,075,187 ------------ ------------- Net increase (decrease) in shares outstanding (478,496) $ (2,121,289) ------------ ------------- ------------ ------------- Year ended December 31, 2002: Shares sold 7,327,260 $ 91,096,995 Shares issued in reinvestment of dividends 130,285 1,490,461 Shares reacquired (30,999,590) (378,829,974) ------------ ------------- Net increase (decrease) in shares outstanding before conversions (23,542,045) (286,242,518) Shares issued upon conversion from Class B 11,063,693 133,749,286 ------------ ------------- Net increase (decrease) in shares outstanding (12,478,352) $(152,493,232) ------------ ------------- ------------ ------------- Class B - -------------------------------------------------------- Six months ended June 30, 2003: Shares sold 1,196,152 $ 13,044,303 Shares issued in reinvestment of dividends 7,921 89,979 Shares reacquired (4,193,970) (45,185,581) ------------ ------------- Net increase (decrease) in shares outstanding before conversions (2,989,897) (32,051,299) Shares reacquired upon conversion into Class A (7,573,711) (85,075,187) ------------ ------------- Net increase (decrease) in shares outstanding (10,563,608) $(117,126,486) ------------ ------------- ------------ ------------- Year ended December 31, 2002: Shares sold 3,364,387 $ 41,823,415 Shares reacquired (15,390,505) (181,931,673) ------------ ------------- Net increase (decrease) in shares outstanding before conversions (12,026,118) (140,108,258) Shares reacquired upon conversion into Class A (11,198,222) (133,749,286) ------------ ------------- Net increase (decrease) in shares outstanding (23,224,340) $(273,857,544) ------------ ------------- ------------ ------------- Class C - -------------------------------------------------------- Six months ended June 30, 2003: Shares sold 256,023 $ 2,787,369 Shares issued in reinvestment of dividends 1,012 11,496 Shares reacquired (563,413) (6,061,892) ------------ ------------- Net increase (decrease) in shares outstanding (306,378) $ (3,263,027) ------------ ------------- ------------ ------------- Year ended December 31, 2002: Shares sold 942,630 $ 10,960,693 Shares reacquired (1,718,166) (20,360,745) ------------ ------------- Net increase (decrease) in shares outstanding (775,536) $ (9,400,052) ------------ ------------- ------------ -------------
30 Strategic Partners Equity Fund Notes to Financial Statements (Unaudited) Cont'd.
Class Z Shares Amount - -------------------------------------------------------- ------------ ------------- Six months ended June 30, 2003: Shares sold 806,992 $ 8,806,998 Shares issued in reinvestment of dividends 49,097 565,605 Shares reacquired (1,873,605) (21,194,945) ------------ ------------- Net increase (decrease) in shares outstanding (1,017,516) $ (11,822,342) ------------ ------------- ------------ ------------- Year ended December 31, 2002: Shares sold 2,086,771 $ 26,057,426 Shares issued in reinvestment of dividends 47,807 546,911 Shares reacquired (4,397,217) (54,439,025) ------------ ------------- Net increase (decrease) in shares outstanding (2,262,639) $ (27,834,688) ------------ ------------- ------------ -------------
31 Strategic Partners Equity Fund Financial Highlights (Unaudited)
Class A ---------------- Six Months Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.82 ---------------- Income from investment operations Net investment income .03 Net realized and unrealized gain (loss) on investments and foreign currencies 1.26 ---------------- Total from investment operations 1.29 ---------------- Less distributions Dividends from net investment income (.04) Distributions from net realized capital gains -- ---------------- Total distributions (.04) ---------------- Net asset value, end of period $ 12.07 ---------------- ---------------- TOTAL RETURN(a): 11.91% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $1,300,600 Average net assets (000) $1,177,021 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.04%(c) Expenses, excluding distribution and service (12b-1) fees .79%(c) Net investment income .55%(c) For Classes A, B, C and Z shares: Portfolio turnover 27%
- ------------------------------ (a) 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 return does not consider the effects of sales loads. Total return for periods of less than a full year is not annualized. (b) Calculated based upon weighted average shares outstanding during the year. (c) Annualized. 32 See Notes to Financial Statements Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class A - ---------------------------------------------------------------------------- Year Ended December 31, - ---------------------------------------------------------------------------- 2002(b) 2001 2000 1999 1998 - ---------------------------------------------------------------------------- $ 14.06 $ 16.99 $ 19.29 $ 19.76 $ 19.85 - ---------- ---------- ---------- ---------- ---------- .05 .05 .20 .26 .31 (3.28) (1.99) .55 2.15 1.37 - ---------- ---------- ---------- ---------- ---------- (3.23) (1.94) .75 2.41 1.68 - ---------- ---------- ---------- ---------- ---------- (.01) (.02) (.22) (.27) (.28) -- (.97) (2.83) (2.61) (1.49) - ---------- ---------- ---------- ---------- ---------- (.01) (.99) (3.05) (2.88) (1.77) - ---------- ---------- ---------- ---------- ---------- $ 10.82 $ 14.06 $ 16.99 $ 19.29 $ 19.76 - ---------- ---------- ---------- ---------- ---------- - ---------- ---------- ---------- ---------- ---------- (22.95)% (12.14)% 4.73% 12.50% 8.41% $1,171,741 $1,697,621 $2,028,525 $2,240,250 $2,290,659 $1,405,215 $1,822,036 $1,983,138 $2,217,410 $2,088,616 .95% .93% .87% .86% .85% .70% .68% .62% .61% .60% .40% .34% 1.01% 1.25% 1.41% 49% 155% 63% 9% 25%
See Notes to Financial Statements 33 Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class B ---------------- Six Months Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.67 ---------------- Income from investment operations Net investment income (loss) (.06) Net realized and unrealized gain (loss) on investments and foreign currencies 1.28 ---------------- Total from investment operations 1.22 ---------------- Less distributions Dividends from net investment income --(c) Distributions from net realized capital gains -- ---------------- Total distributions -- ---------------- Net asset value, end of period $ 11.89 ---------------- ---------------- TOTAL RETURN(a): 11.46% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $421,681 Average net assets (000) $457,394 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.79%(d) Expenses, excluding distribution and service (12b-1) fees .79%(d) Net investment income (loss) (.18)%(d)
- ------------------------------ (a) 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 return does not consider the effect of sales loads. Total return for periods of less than a full year is not annualized. (b) Calculated based upon weighted average shares outstanding during the year. (c) Less than ($0.005). (d) Annualized. 34 See Notes to Financial Statements Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class B - ---------------------------------------------------------------------------- Year Ended December 31, - ---------------------------------------------------------------------------- 2002(b) 2001 2000 1999 1998 - ---------------------------------------------------------------------------- $ 13.95 $ 16.97 $ 19.26 $ 19.73 $ 19.83 - ---------- ---------- ---------- ---------- ---------- (.04) (.07) .11 .13 .14 (3.24) (1.98) .50 2.12 1.37 - ---------- ---------- ---------- ---------- ---------- (3.28) (2.05) .61 2.25 1.51 - ---------- ---------- ---------- ---------- ---------- -- -- (.07) (.11) (.12) -- (.97) (2.83) (2.61) (1.49) - ---------- ---------- ---------- ---------- ---------- -- (.97) (2.90) (2.72) (1.61) - ---------- ---------- ---------- ---------- ---------- $ 10.67 $ 13.95 $ 16.97 $ 19.26 $ 19.73 - ---------- ---------- ---------- ---------- ---------- - ---------- ---------- ---------- ---------- ---------- (23.51)% (12.80)% 3.93% 11.69% 7.55% $ 491,226 $ 966,066 $1,479,532 $2,351,200 $2,923,060 $ 736,091 $1,182,447 $1,785,239 $2,666,269 $3,135,980 1.70% 1.68% 1.62% 1.61% 1.60% .70% .68% .62% .61% .60% (.35)% (.40)% .26% .49% .66%
See Notes to Financial Statements 35 Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class C ---------------- Six Months Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.67 -------- Income from investment operations Net investment income (loss) (.02) Net realized and unrealized gain (loss) on investments and foreign currencies 1.24 -------- Total from investment operations 1.22 -------- Less distributions Dividends from net investment income --(c) Distributions from net realized capital gains -- -------- Total distributions -- -------- Net asset value, end of period $ 11.89 -------- -------- TOTAL RETURN(a): 11.47% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $ 39,745 Average net assets (000) $ 37,758 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees 1.79%(d) Expenses, excluding distribution and service (12b-1) fees .79%(d) Net investment income (loss) (.19)%(d)
- ------------------------------ (a) 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 return does not consider the effects of sales loads. Total return for periods of less than a full year is not annualized. (b) Calculated based upon weighted average shares outstanding during the year. (c) Less than ($0.005). (d) Annualized. 36 See Notes to Financial Statements Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class C - ----------------------------------------------------------------------- Year Ended December 31, - ----------------------------------------------------------------------- 2002(b) 2001 2000 1999 1998 - ----------------------------------------------------------------------- $ 13.95 $ 16.97 $ 19.26 $ 19.73 $ 19.83 - --------- --------- --------- --------- --------- (.04) (.06) .04 .10 .16 (3.24) (1.99) .57 2.15 1.35 - --------- --------- --------- --------- --------- (3.28) (2.05) .61 2.25 1.51 - --------- --------- --------- --------- --------- -- -- (.07) (.11) (.12) -- (.97) (2.83) (2.61) (1.49) - --------- --------- --------- --------- --------- -- (.97) (2.90) (2.72) (1.61) - --------- --------- --------- --------- --------- $ 10.67 $ 13.95 $ 16.97 $ 19.26 $ 19.73 - --------- --------- --------- --------- - --------- --------- --------- --------- (23.51)% (12.80)% 3.93% 11.69% 7.55% $38,943 $61,722 $67,237 $82,737 $88,839 $49,304 $64,197 $67,999 $86,078 $82,907 1.70% 1.68% 1.62% 1.61% 1.60% .70% .68% .62% .61% .60% (.34)% (.40) .26% .50% .67%
See Notes to Financial Statements 37 Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class Z ---------------- Six Months Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.83 ---------------- Income from investment operations Net investment income .05 Net realized and unrealized gain (loss) on investments and foreign currencies 1.24 ---------------- Total from investment operations 1.29 ---------------- Less distributions Dividends from net investment income (.05) Distributions from net realized capital gains -- ---------------- Total distributions (.05) ---------------- Net asset value, end of period $ 12.07 ---------------- ---------------- TOTAL RETURN(a): 11.92% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) $134,464 Average net assets (000) $131,296 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees .79%(c) Expenses, excluding distribution and service (12b-1) fees .79%(c) Net investment income .81%(c)
- ------------------------------ (a) 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 return for periods of less than a full year is not annualized. (b) Calculated based upon weighted average shares outstanding during the year. (c) Annualized. 38 See Notes to Financial Statements Strategic Partners Equity Fund Financial Highlights (Unaudited) Cont'd.
Class Z - ----------------------------------------------------------------------- Year Ended December 31, - ----------------------------------------------------------------------- 2002(b) 2001 2000 1999 1998 - ----------------------------------------------------------------------- $ 14.06 $ 16.99 $ 19.30 $ 19.76 $ 19.87 - --------- --------- --------- --------- --------- .08 .09 .25 .31 .35 (3.27) (2.00) .54 2.16 1.36 - --------- --------- --------- --------- --------- (3.19) (1.91) .79 2.47 1.71 - --------- --------- --------- --------- --------- (.04) (.05) (.27) (.32) (.33) -- (.97) (2.83) (2.61) (1.49) - --------- --------- --------- --------- --------- (.04) (1.02) (3.10) (2.93) (1.82) - --------- --------- --------- --------- --------- $ 10.83 $ 14.06 $ 16.99 $ 19.30 $ 19.76 - --------- --------- --------- --------- --------- - --------- --------- --------- --------- --------- (22.67)% (11.93)% 4.95% 12.81% 8.56% $ 131,589 $ 202,779 $ 255,250 $ 304,906 $ 307,921 $ 165,724 $ 225,442 $ 269,633 $ 302,528 $ 311,816 .70% .68% .62% .61% .60% .70% .68% .62% .61% .60% .65% .60% 1.26% 1.50% 1.67%
See Notes to Financial Statements 39 www.strategicpartners.com (800) 225-1852 FOR MORE INFORMATION Strategic Partners Mutual Funds Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 (800) 225-1852 Directors David E.A. Carson Robert F. Gunia Robert E. La Blanc Douglas H. McCorkindale Stephen P. Munn Richard A. Redeker Judy A. Rice Robin B. Smith Stephen D. Stoneburn Clay T. Whitehead Officers Judy A. Rice, President Robert F. Gunia, Vice President Grace C. Torres, Treasurer Marguerite E.H. Morrison, Chief Legal Officer and Assistant Secretary Maryanne Ryan, Anti-Money Laundering Compliance Officer Manager Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Investment Advisers Jennison Associates LLC 466 Lexington Avenue New York, NY 10017 GE Asset Management, Inc. 3003 Summer Street Stamford, CT 06904 Salomon Brothers Asset Management, Inc. 388 Greenwich Street, 8th Floor New York, NY 10013 Distributor Prudential Investment Management Services LLC Gateway Center Three, 14th Floor 100 Mulberry Street Newark, NJ 07102-4077 Custodian State Street Bank and Trust Company One Heritage Drive North Quincy, MA 02171 Transfer Agent Prudential Mutual Fund Services LLC PO Box 8098 Philadelphia, PA 19101 Independent Auditors PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 Legal Counsel Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004-2498 Fund Symbols Nasdaq CUSIP Class A PBQAX 86276T102 Class B PBQFX 86276T201 Class C PRECX 86276T300 Class Z PEQZX 86276T409 The views expressed in this report and information about the Fund's portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of June 30, 2003, were not audited and, accordingly, no auditor's opinion is expressed on them. Mutual Funds: ARE NOT INSURED BY THE FDIC OR ANY FEDERAL MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR GOVERNMENT AGENCY ANY BANK AFFILIATE
[LOGO] Strategic Partners Fund Symbols Nasdaq CUSIP Class A PBQAX 86276T102 Class B PBQFX 86276T201 Class C PRECX 86276T300 Class Z PEQZX 86276T409 MFSP101E2 IFS-A083174 Item 2 -- Code of Ethics -- Not required in this filing Item 3 -- Audit Committee Financial Expert -- Not required in this filing Item 4 -- Principal Accountant Fees and Services -- Not required in this filing Item 5 -- Reserved Item 6 -- Reserved Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies -- Not required in this filing Item 8 -- Reserved Item 9 -- Controls and Procedures (a) It is the conclusion of the registrant's principal executive officer and principal financial officer that the effectiveness of the registrant's current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant's principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. (b) There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10 -- Exhibits (a) Code of Ethics -- Not required in this filing (b) Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act -- Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) By: /s/ Marguerite E.H. Morrison ---------------------------------------------------------- Marguerite E.H. Morrison Assistant Secretary Date: August 26, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Judy A. Rice ---------------------------------------------------------- Judy A. Rice President and Principal Executive Officer Date: August 26, 2003 By: /s/ Grace C. Torres ---------------------------------------------------------- Grace C. Torres Treasurer and Principal Financial Officer Date: August 26, 2003 EX-99.CERT 3 mf16128ex99cert.txt SECTION 302 SARBANES-OXLEY CERTIFICATIONS Item 10 Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) Semi-Annual period ending 06/30/03 File No. 811-3326 CERTIFICATIONS I, Judy A. Rice, certify that: 1. I have reviewed this report on Form N-CSR of Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 26, 2003 /s/ Judy A. Rice --------------------- Judy A. Rice President and Principal Executive Officer Item 10 Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) Semi-Annual period ending 06/30/03 File No. 811-3326 CERTIFICATIONS I, Grace C. Torres, certify that: 1. I have reviewed this report on Form N-CSR of Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 26, 2003 /s/ Grace C. Torres ----------------------- Grace C. Torres Treasurer and Principal Financial Officer EX-99.906.CERT 4 mf16128ex906cert.txt SECTION 906 SARBANES-OXLEY CERTIFICATIONS Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Prudential Equity Fund, Inc. (d/b/a Strategic Partners Equity Fund) In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 26, 2003 /s/ Judy A. Rice ------------------------ Judy A. Rice President and Principal Executive Officer Date: August 26, 2003 /s/ Grace C. Torres ------------------------ Grace C. Torres Treasurer and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----