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: | 811-04024 | |
Exact name of registrant as specified in charter: | Dryden California Municipal Fund | |
Address of principal executive offices: | Gateway Center 3, | |
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Name and address of agent for service: | Deborah A. Docs | |
Gateway Center 3, | ||
100 Mulberry Street, | ||
Newark, New Jersey 07102 | ||
Registrant’s telephone number, including area code: | 973-367-7521 | |
Date of fiscal year end: | 8/31/2005 | |
Date of reporting period: | 2/28/2005 |
Item 1 – Reports to Stockholders – [ INSERT REPORT ]
Dryden California Municipal Fund/California Series
FEBRUARY 28, 2005 | SEMIANNUAL REPORT |
FUND TYPE
Municipal bond
OBJECTIVE
Maximize current income that is exempt from California state and federal income taxes, consistent with the preservation 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 Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter.
JennisonDryden is a registered trademark of The Prudential Insurance Company of America.
Dear Shareholder,
April 15, 2005
We hope that you find the semiannual report for the California Series informative and useful. As a JennisonDryden Mutual Fund shareholder, you may be thinking about where you can find additional growth opportunities. You could invest in last year’s top-performing asset class and hope that history repeats itself or you could stay in cash while waiting for the “right moment” to invest.
We believe it is wise to take advantage of developing domestic and global investment opportunities through a diversified portfolio of stock and bond mutual funds. A diversified asset allocation offers two advantages. It helps you manage downside risk by not being overly exposed to any particular asset class, plus it gives you a better opportunity to have at least some of your assets in the right place at the right time. Your financial professional can help you create a diversified investment plan that may include mutual funds that cover all the basic asset classes and is reflective of your personal investor profile and tolerance for risk.
JennisonDryden Mutual Funds give you a wide range of choices that can help you make progress toward your financial goals. Our funds offer the experience, resources, and professional discipline of three leading asset managers. They are recognized and respected in the institutional market and by discerning investors for excellence in their respective strategies. JennisonDryden equity funds are advised by Jennison Associates LLC and/or Quantitative Management Associates LLC (QMA). Prudential Investment Management, Inc. (PIM) advises the JennisonDryden fixed income and money market funds. Jennison Associates, QMA, and PIM are registered investment advisers and Prudential Financial companies.
Thank you for choosing JennisonDryden Mutual Funds.
Sincerely,
Judy A. Rice, President
Dryden California Municipal Fund/California Series
Dryden California Municipal Fund/California Series | 1 |
Your Series’ Performance
Series objective
The investment objective of the Dryden California Municipal Fund/California Series (the Series) is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. There can be no assurance that the Series will achieve its investment objective.
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data current to the most recent month-end by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The maximum initial sales charge is 4.00% (Class A shares).
Cumulative Total Returns1 as of 2/28/05 | |||||||||||||
Six Months | One Year | Five Years | Ten Years | Since Inception2 | |||||||||
Class A | 2.28 | % | 1.68 | % | 37.43 | % | 78.25% (77.95) | 156.08% (155.64) | |||||
Class B | 2.15 | 1.51 | 35.87 | 72.89 (72.59) | 292.66 (275.83) | ||||||||
Class C | 2.02 | 1.25 | 34.20 | 68.67 (68.38) | 73.11 (72.81) | ||||||||
Class Z | 2.40 | 1.93 | 39.14 | N/A | 63.01 (62.87) | ||||||||
Lehman Brothers Municipal Bond Index3 | 2.40 | 2.96 | 41.42 | 87.96 | *** | ||||||||
Lipper California (CA) Muni Debt Funds Avg.4 | 2.76 | 2.90 | 37.25 | 76.02 | **** | ||||||||
Average Annual Total Returns1 as of 3/31/05 | |||||||||||||
One Year | Five Years | Ten Years | Since Inception2 | ||||||||||
Class A | –2.17 | % | 5.07 | % | 5.34% (5.32) | 6.05% (6.04) | |||||||
Class B | –3.12 | 5.53 | 5.45 (5.43) | 6.85 (6.59) | |||||||||
Class C | 0.44 | 5.43 | 5.19 (5.17) | 5.20 (5.19) | |||||||||
Class Z | 2.15 | 6.19 | N/A | 5.81 (5.79) | |||||||||
Lehman Brothers Municipal Bond Index3 | 2.67 | 6.58 | 6.33 | *** | |||||||||
Lipper California (CA) Muni Debt Funds Avg.4 | 2.86 | 5.82 | 5.62 | **** | |||||||||
Distributions and Yields1 as of 2/28/05 | ||||||||||||||
Total Distributions Paid for Six Months | 30-Day SEC Yield | Taxable Equivalent 30-Day Yield5 at Tax Rates of | ||||||||||||
33% | 35% | |||||||||||||
Class A | $ | 0.56 | 2.87 | % | 4.72 | % | 4.87 | % | ||||||
Class B | $ | 0.55 | 2.74 | 4.51 | 4.65 | |||||||||
Class C | $ | 0.53 | 2.49 | 4.10 | 4.22 | |||||||||
Class Z | $ | 0.58 | 3.25 | 5.35 | 5.51 |
2 | Visit our website at www.jennisondryden.com |
The cumulative total returns do not reflect the deduction of applicable sales charges. If reflected, the applicable sales charges would reduce the cumulative total returns performance quoted. Class A shares are subject to a maximum front-end sales charge of 4.00%. Under certain circumstances, Class A shares may be subject to a contingent deferred sales charge (CDSC) of 1%. Class B and Class C shares are subject to a maximum CDSC of 5% and 1% respectively. Class Z shares are not subject to a sales charge.
1Source: Prudential Investments LLC and Lipper Inc. The average annual total returns take into account applicable sales charges. During certain periods shown, fee waivers and/or expense reimbursements were in effect. Without such fee waivers and expense reimbursements, the returns for the classes would have been lower. Class A, Class B, and Class C shares are subject to an annual distribution and service (12b-1) fee of up to 0.3%, 0.5%, and 1.0% respectively. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Class Z shares are not subject to a 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. Without waiver of fees and/or expense subsidization, the Series’ returns would have been lower, as indicated in parentheses.
2Inception dates: Class A, 1/22/90; Class B, 9/19/84; Class C, 8/1/94; and Class Z, 9/18/96.
3The Lehman Brothers Municipal Bond Index is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.
4The Lipper CA Muni Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper CA Muni Debt Funds category for the periods noted. Funds in the Lipper Average limit their assets to those securities that are exempt from taxation in California.
5Taxable equivalent yields reflect federal and applicable state tax rates.
Investors cannot invest directly in an index. The returns for the Lehman Brothers Municipal Bond Index 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.
***Lehman Brothers Municipal Bond Index Closest Month-End to Inception cumulative total returns as of 2/28/05 are 178.67% for Class A, 415.07% for Class B, 93.91% for Class C, and 66.34% for Class Z. Lehman Brothers Municipal Bond Index Closest Month-End to Inception average annual total returns as of 3/31/05 are 6.95% for Class A, 8.29% for Class B, 6.34% for Class C, and 6.09% for Class Z.
****Lipper Average Closest Month-End to Inception cumulative total returns as of 2/28/05 are 160.69% for Class A, 350.34% for Class B, 81.54% for Class C, and 56.68% for Class Z. Lipper Average Closest Month-End to Inception average annual total returns as of 3/31/05 are 6.47% for Class A, 7.57% for Class B, 5.67% for Class C, and 5.34% for Class Z.
Dryden California Municipal Fund/California Series | 3 |
Your Series’ Performance (continued)
Five Largest Issues expressed as a percentage of net assets as of 2/28/05 | |||
Orange Cnty. Loc. Trans. Auth., 2/14/11, 6.20% | 5.5 | % | |
So. California Pub. Pwr. Auth., 7/01/16, Zero Coupon | 4.7 | ||
Los Angeles California Cmnty. Coll. Dist., 8/01/17, 5.50% | 4.0 | ||
California St. Hsg. Fin. Agcy., 2/01/2015, Zero Coupon | 3.7 | ||
Santa Margarita/Dana Point Auth., 8/01/2012, 7.25% | 3.5 |
Issues are subject to change.
Credit Quality expressed as a percentage of net assets as of 2/28/05 | |||
Aaa | 62.5 | % | |
Aa | 10.5 | ||
A | 12.9 | ||
Baa | 9.1 | ||
Not Rated | 4.2 | ||
Total Investments | 99.2 | ||
Other assets in excess of liabilities | 0.8 | ||
Net Assets | 100.0 | ||
Source: Moody’s rating, defaulting to S&P when not rated by Moody’s. Credit quality is subject to change.
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Fees and Expenses (Unaudited)
As a shareholder of the Series, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Series expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on September 1, 2004, at the beginning of the period, and held through the six-month period ended February 28, 2005.
The Series may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to Individual Retirement Accounts (IRAs), Section 403(b) accounts, and Section 529 plan accounts. As of the close of the six months covered by the table, IRA fees included a setup fee of $5, a maintenance fee of up to $36 annually ($18 for the six-month period), and a termination fee of $10. Section 403(b) accounts and Section 529 plan accounts are each charged an annual $25 fiduciary maintenance fee ($12.50 for the six-month period). Some of the fees vary in amount, or are waived, based on your total account balance or the number of JennisonDryden or Strategic Partners funds, including the Series, that you own. You should consider the additional fees that were charged to your Series account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year
Dryden California Municipal Fund/California Series | 5 |
Fees and Expenses (continued)
before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads). Therefore the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Dryden California Municipal Fund/ California Series | Beginning Account Value September 1, 2004 | Ending Account February 28, 2005 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid Month Period* | ||||||||||
Class A | Actual | $ | 1,000 | $ | 1,023 | 1.02 | % | $ | 5.12 | |||||
Hypothetical | $ | 1,000 | $ | 1,020 | 1.02 | % | $ | 5.11 | ||||||
Class B | Actual | $ | 1,000 | $ | 1,022 | 1.27 | % | $ | 6.37 | |||||
Hypothetical | $ | 1,000 | $ | 1,018 | 1.27 | % | $ | 6.35 | ||||||
Class C | Actual | $ | 1,000 | $ | 1,020 | 1.52 | % | $ | 7.61 | |||||
Hypothetical | $ | 1,000 | $ | 1,017 | 1.52 | % | $ | 7.60 | ||||||
Class Z | Actual | $ | 1,000 | $ | 1,024 | 0.77 | % | $ | 3.86 | |||||
Hypothetical | $ | 1,000 | $ | 1,021 | 0.77 | % | $ | 3.86 |
* Series expenses for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended February 28, 2005, and divided by the 365 days in the Series’ fiscal year ending August 31, 2005 (to reflect the six-month period).
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Portfolio of Investments
as of February 28, 2005 (Unaudited)
Description (a) | Moody’s Rating | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
LONG-TERM INVESTMENTS 97.9% | |||||||||||||
Municipal Bonds | |||||||||||||
Abag Fin. Auth. Rev., Schs. of Sacred Heart, Ser. A | Baa3 | 6.45% | 6/01/30 | $ | 1,500 | $ | 1,596,315 | ||||||
Antelope Valley California Health Care Dist. Ser. A, F.S.A. | Aaa | 5.20 | 1/01/17 | 1,000 | 1,071,860 | ||||||||
Baldwin Park Uni. Sch. Dis., Election of 2002, F.S.A. | Aaa | 5.00 | 8/01/22 | 1,065 | 1,126,152 | ||||||||
California Edl. Facs. Auth. Rev., Panama College, Ser. A, C.A.B.S. | Aaa | Zero | 7/01/32 | 1,580 | 380,037 | ||||||||
California St. Econ. Recov., Ser. A, G.O., M.B.I.A. | Aaa | 5.25 | 7/01/13 | 1,500 | 1,680,345 | ||||||||
G.O. | A3 | 5.50 | 4/01/30 | 2,000 | 2,183,660 | ||||||||
California St. Dept. Wtr. Res. Pwr. Sup. Rev., Ser A | A2 | 5.00 | 5/01/17 | 2,000 | 2,129,560 | ||||||||
California St. Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtge., Ser. A | Aa2 | Zero | 2/01/15 | 8,420 | 3,873,537 | ||||||||
California St. Pub. Works Brd. Dept. Mental Hlth., Lease Rev. | Baa1 | 5.50 | 6/01/18 | 1,970 | 2,198,244 | ||||||||
California St., M.B.I.A. | Aaa | 5.25 | 2/01/27 | 1,500 | 1,596,870 | ||||||||
Central California Joint Pwrs. Hlth. Fin. Auth., C.O.P. | Baa2 | 6.00 | 2/01/30 | 1,000 | 1,040,270 | ||||||||
Chino Basin Reg. Fin. Auth. Rev., Inland Empire Util. Agcy. Swr. Proj., M.B.I.A. | Aaa | 5.75 | 11/01/19 | 200 | 224,066 | ||||||||
Corona-Norco Uni. Sch. Dist. Spec. Tax, Cmnty. Facs. Dist. No. 98-1, M.B.I.A. | Aaa | 5.00 | 9/01/22 | 1,060 | 1,117,039 | ||||||||
Foothill/Eastern Corridor Agcy. Toll Rd. Rev., M.B.I.A. | Aaa | 5.375 | 1/15/15 | 500 | 550,185 | ||||||||
Golden St. Tobacco Secur. Corp., Tobacco Settlement Rev., | |||||||||||||
Enhanced Asset Bkd., Ser. B | Baa1 | 5.50 | 6/01/19 | 595 | 624,423 | ||||||||
Enhanced Asset Bkd., Ser. B | Baa1 | 5.625 | 6/01/20 | 675 | 710,201 | ||||||||
Enhanced Asset Bkd., Ser. B | Baa1 | 5.50 | 6/01/43 | 1,500 | 1,601,340 | ||||||||
Ser. 2003-A-1 | Baa3 | 6.75 | 6/01/39 | 750 | 785,130 | ||||||||
La Quinta California Financing Authority Local A.M.B.A.C. | Aaa | 5.25 | 9/01/24 | 500 | 540,400 | ||||||||
Long Beach Redev. Agcy., Dist. No. 3, Spec. Tax Rev. | NR | 6.375 | 9/01/23 | 3,000 | (h) | 3,168,810 |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 7 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
Description (a) | Moody’s Rating | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
Los Angeles California Cmnty. Coll. Dist. Ser. A, G.O., M.B.I.A. | Aaa | 5.50% | 8/01/17 | $ | 3,800 | (e) | $ | 4,244,904 | |||||
Los Angeles California Unified Sch. Dist. C.O.P., Admin. Bldg. Proj., Ser. B, A.M.B.A.C. | Aaa | 5.00 | 10/01/31 | 1,500 | 1,540,590 | ||||||||
Election of 1997, Ser. F, G.O., F.G.I.C. | Aaa | 5.00 | 7/01/21 | 1,000 | 1,063,330 | ||||||||
Los Angeles Cnty., Correctional Facs. Proj., C.O.P., M.B.I.A., E.T.M. | Aaa | Zero | 9/01/10 | 3,770 | 3,132,757 | ||||||||
Los Angeles Conv. & Exhib. Ctr. Auth., C.O.P. | Aaa | 9.00 | 12/01/10 | 1,250 | (d)(e) | 1,312,587 | |||||||
Los Angeles Dept. Wtr. & Pwr. Rev., Pwr. Sys., Ser. A-A-1, F.S.A. | Aaa | 5.25 | 7/01/20 | 630 | 683,607 | ||||||||
Los Angeles Hbr. Dept. Rev., | Aa2 | 5.375 | 11/01/23 | 1,000 | 1,039,260 | ||||||||
Metro. Wtr. Dist. of Southern California, Rev. Linked S.A.V.R.S. & R.I.B.S. | Aa2 | 5.75 | 8/10/18 | 1,000 | 1,171,530 | ||||||||
Waterworks Rev., Ser. A | Aa2 | 5.75 | 7/01/21 | 2,240 | (e) | 2,647,411 | |||||||
MidPeninsula Regional Open Space Dist. of California, Financing Auth. Rev., A.M.B.A.C. | Aaa | 5.00 | 9/01/34 | 2,000 | 2,076,660 | ||||||||
Orange Cnty. Loc. Trans. Auth., Linked S.A.V.R.S. & R.I.B.S., T.C.R.S., A.M.B.A.C. | Aaa | 6.20 | 2/14/11 | 5,000 | 5,734,200 | ||||||||
Spec. Tax Rev., R.I.B.S. | Aa2 | 10.088(b) | 2/14/11 | 750 | 970,260 | ||||||||
Puerto Rico Comnwlth. Highway & Trans. Auth. Trans. Rev., Ser. J, F.G.I.C. | Aaa | 5.00 | 7/01/20 | 1,000 | 1,080,500 | ||||||||
Puerto Rico Comnwlth., Ser. 642A, G.O., M.B.I.A. | NR | 9.897(g) | 7/01/10 | 1,000 | (h) | 1,260,020 | |||||||
Redding Elec. Sys. Rev., C.O.P., E.T.M., Linked S.A.V.R.S. & R.I.B.S., M.B.I.A. | Aaa | 10.525(b) | 7/01/22 | 1,750 | 2,567,775 | ||||||||
R.I.B.S., M.B.I.A., E.T.M. | Aaa | 6.368 | 7/01/22 | 50 | 61,682 | ||||||||
Sacramento City Fin. Auth. Rev., Cap. Impv., Ser. A, A.M.B.A.C. | Aaa | 5.00 | 12/01/26 | 2,000 | 2,073,760 |
See Notes to Financial Statements.
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Description (a) | Moody’s Rating | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | |||||||
City Hall & Redev. Projs., | Aaa | 5.375% | 12/01/19 | $ | 1,000 | $ | 1,111,860 | |||||
Sacramento Mun. Utility Dist. Elec. Rev., Ser. N, M.B.I.A. | Aaa | 5.00 | 8/15/28 | 2,500 | 2,583,550 | |||||||
San Diego Redev., Agcy. Tax Alloc. North Bay Redev. | Baa1 | 5.875 | 9/01/29 | 1,000 | 1,039,720 | |||||||
San Diego Uni. Sch. Dist., Election of 1998, Ser. B, M.B.I.A. | Aaa | 6.00 | 7/01/19 | 1,000 | 1,212,940 | |||||||
San Francisco City & Cnty., Redev. Agcy., Lease Rev., Cap. Apprec. | A1 | Zero | 7/01/09 | 2,000 | 1,722,520 | |||||||
Santa Margarita/Dana Point Auth., Impvt. Dists. 1-2-2A & 8, Ser. A, M.B.I.A. | Aaa | 7.25 | 8/01/09 | 1,000 | 1,177,030 | |||||||
Impvt. Dists. 3, Ser. B, M.B.I.A. | Aaa | 7.25 | 8/01/08 | 2,500 | 2,862,775 | |||||||
Impvt. Dists. 3, Ser. B, M.B.I.A. | Aaa | 7.25 | 8/01/09 | 1,400 | 1,647,842 | |||||||
Impvt. Dists. 3, Ser. B, M.B.I.A. | Aaa | 7.25 | 8/01/14 | 1,000 | 1,280,090 | |||||||
Ser. A, M.B.I.A., Rev. | Aaa | 7.25 | 8/01/13 | 1,990 | 2,506,644 | |||||||
Ser. B, M.B.I.A., Rev. | Aaa | 7.25 | 8/01/12 | 3,000 | 3,726,570 | |||||||
Santa Maria Joint Union H.S., Dist., Election 2004,C.A.B.S., G.O., F.G.I.C. | Aaa | Zero | 8/01/29 | 1,250 | 355,900 | |||||||
So. California Pub. Pwr. Auth., Proj. Rev. | A2 | 6.75 | 7/01/10 | 2,265 | 2,621,873 | |||||||
Proj. Rev. | A2 | 6.75 | 7/01/11 | 1,195 | 1,403,695 | |||||||
Proj. Rev. | A2 | 6.75 | 7/01/13 | 1,000 | 1,195,700 | |||||||
Proj. Rev., A.M.B.A.C., E.T.M. | Aaa | Zero | 7/01/16 | 7,925 | 4,891,469 | |||||||
Torrance California Hosp. Rev., Torrance Mem. Med. Ctr., | A1 | 6.00 | 6/01/22 | 2,000 | 2,238,540 | |||||||
Univ. California Hosp. Rev. UCLA Med. Ctr., Ser. A, A.M.B.A.C. | Aaa | 5.125 | 9/01/31 | 2,500 | 2,601,250 | |||||||
Univ. California Rev. Multi. Purpose Proj., Ser. O, F.G.I.C. | Aaa | 5.25 | 5/15/30 | 2,000 | 2,121,660 | |||||||
Victor Elementary Sch. Dist., Ser. A, G.O., F.G.I.C. | Aaa | 5.375 | 8/01/19 | 1,290 | 1,430,894 | |||||||
Virgin Islands Pub. Fin. Auth. Rev., Gross Rcpts. Taxes Ln. Nt., F.S.A. | Aaa | 5.25 | 10/01/19 | 1,000 | 1,109,660 |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 9 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
Description (a) | Moody’s Rating | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | |||||||
Gross Rcpts. Taxes Ln. Nt., F.S.A. | Aaa | 5.25% | 10/01/21 | $ | 1,000 | $ | 1,104,600 | |||||
Total long-term investments | 102,806,059 | |||||||||||
SHORT-TERM INVESTMENTS 1.3% | ||||||||||||
Municipal Bonds | ||||||||||||
California St. Mun. Secs. Tr. Rcpts., Ser. SGA 119, G.O., F.G.I.C., F.R.D.D. | A-1+(c) | 1.83 | 3/01/05 | 1,350 | 1,350,000 | |||||||
Total Investments 99.2% | 104,156,059 | |||||||||||
Variation margin on open futures contracts, net(i) | 58,219 | |||||||||||
Other assets in excess of liabilities 0.8% | 790,261 | |||||||||||
Net Assets 100% | $ | 105,004,539 | ||||||||||
(a) | The following abbreviations are used in the portfolio descriptions: |
A.M.B.A.C.—American Municipal Bond Assurance Corporation.
A.M.T.—Alternative Minimum Tax.
C.A.B.S.—Capital Appreciation Bonds.
C.O.P.—Certificates of Participation.
E.T.M.—Escrowed to Maturity.
F.G.I.C.—Financial Guaranty Insurance Company.
F.R.D.D.—Floating Rate (Daily) Demand Note(f).
F.S.A.—Financial Security Assurance.
G.O.—General Obligation.
M.B.I.A.—Municipal Bond Insurance Corporation.
R.I.B.S.—Residential Interest Bearing Securities.
S.A.V.R.S.—Select Auction Variable Rate Securities.
T.C.R.S.—Transferable Custodial Receipts.
NR—Not Rated by Moody’s or Standard & Poor’s.
The Fund’s current Statement of Additional Information contains a description of Moody’s and Standard & Poor’s ratings.
(b) | Inverse floating rate bond. The coupon is inversely indexed to a floating interest rate. Rate shown is the rate in effect at February 28, 2005. |
(c) | Standard & Poor’s rating. |
(d) | Partial principal amount pledged as collateral for financial futures contracts. |
See Notes to Financial Statements.
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(e) | Prerefunded issues are secured by escrowed cash and/or direct U.S. guaranteed obligations. |
(f) | For purposes of amortized cost valuation, the maturity date of Floating Rate Demand Notes is considered to be the later of the next date on which the security can be redeemed at par, or the next date on which the rate of interest is adjusted. |
(g) | Adjustable rate. Rate shown is the rate in effect at February 28, 2005. |
(h) | Indicates illiquid securities restricted as to resale. The aggregate cost of such securities was $4,012,970. The aggregate value, $4,428,830 and was approximately 4.2% of net assets. |
(i) | Open futures contracts as of February 28, 2005 were as follows: |
Number of Contracts | Type | Expiration Date | Value at Trade Date | Value at February 28, 2005 | Unrealized Appreciation (Depreciation) | |||||||||
Long Positions: | ||||||||||||||
6 | U.S. Treasury Bonds | Mar. 2005 | $ | 699,195 | $ | 678,563 | $ | (20,632 | ) | |||||
12 | U.S. Treasury 2 Yr. Notes | Mar. 2005 | 2,508,202 | 2,498,438 | (9,764 | ) | ||||||||
Short Positions: | ||||||||||||||
26 | U.S. Treasury 5 Yr. Notes | Mar. 2005 | 2,845,750 | 2,811,250 | 34,500 | |||||||||
105 | U.S. Treasury 10 Yr. Notes | Mar. 2005 | 11,748,334 | 11,641,875 | 106,459 | |||||||||
$ | 110,563 | |||||||||||||
The industry classification of portfolio holdings and other assets in excess of liabilities shown as a Percentage of net assets as of February 28, 2005 were as follows:
Special Tax/Assessment District | 25.7 | % | |
General Obligation | 18.1 | ||
Power | 16.6 | ||
Lease Backed Certificate of Participation | 13.0 | ||
Healthcare | 6.2 | ||
Education | 5.4 | ||
Water & Sewer | 4.5 | ||
Housing | 3.7 | ||
Tobacco | 3.5 | ||
Transportation | 2.5 | ||
99.2 | |||
Other assets in excess of liabilities | 0.8 | ||
100.0 | % | ||
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 11 |
Statement of Assets and Liabilities
as of February 28, 2005 (Unaudited)
Assets | ||||
Investments, at value (cost $95,508,604) | $ | 104,156,059 | ||
Interest receivable | 980,878 | |||
Due from broker-variation margin | 58,219 | |||
Other assets | 3,624 | |||
Receivable for Series shares sold | 511 | |||
Total assets | 105,199,291 | |||
Liabilities | ||||
Accrued expenses | 57,168 | |||
Management fee payable | 40,972 | |||
Payable to custodian | 27,332 | |||
Distribution fee payable | 23,557 | |||
Payable for Series shares reacquired | 18,043 | |||
Deferred Trustees’ fees | 15,296 | |||
Dividends payable | 12,384 | |||
Total liabilities | 194,752 | |||
Net Assets | $ | 105,004,539 | ||
Net assets were comprised of: | ||||
Shares of beneficial interest, at par | $ | 89,964 | ||
Paid-in capital in excess of par | 95,978,600 | |||
96,068,564 | ||||
Overdistribution of net investment income | (46,185 | ) | ||
Accumulated net realized gain on investments | 224,142 | |||
Net unrealized appreciation on investments | 8,758,018 | |||
Net assets, February 28, 2005 | $ | 105,004,539 | ||
See Notes to Financial Statements.
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Class A | |||
Net asset value and redemption price per share | $ | 11.67 | |
Maximum sales charge (4% of offering price) | 0.49 | ||
Maximum offering price to public | $ | 12.16 | |
Class B | |||
Net asset value, offering price and redemption price per share | $ | 11.67 | |
Class C | |||
Net asset value and redemption price per share | $ | 11.67 | |
Class Z | |||
Net asset value, offering price and redemption price per share | $ | 11.67 | |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 13 |
Statement of Operations
Six Months Ended February 28, 2005 (Unaudited)
Net Investment Income | |||
Income | |||
Interest | $ | 2,717,891 | |
Expenses | |||
Management fee | 272,451 | ||
Distribution fee—Class A | 108,615 | ||
Distribution fee—Class B | 41,203 | ||
Distribution fee—Class C | 6,217 | ||
Custodian’s fees and expenses | 51,000 | ||
Reports to shareholders | 19,000 | ||
Registration fees | 21,000 | ||
Transfer agent’s fees and expenses | 21,000 | ||
Legal fees and expenses | 14,000 | ||
Audit fee | 12,000 | ||
Trustees’ fees | 6,000 | ||
Miscellaneous | 5,545 | ||
Total expenses | 578,031 | ||
Net investment income | 2,139,860 | ||
Realized And Unrealized Gain On Investments | |||
Net realized gain on: | |||
Investment transactions | 62,966 | ||
Financial futures transactions | 4,265 | ||
67,231 | |||
Net change in unrealized appreciation on: | |||
Investments | 91,379 | ||
Financial futures | 128,945 | ||
220,324 | |||
Net gain on investments | 287,555 | ||
Net Increase In Net Assets Resulting From Operations | $ | 2,427,415 | |
See Notes to Financial Statements.
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Statement of Changes in Net Assets
(Unaudited)
Six Months Ended February 28, 2005 | Year Ended August 31, 2004 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 2,139,860 | $ | 4,710,823 | ||||
Net realized gain on investments | 67,231 | 4,262,556 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 220,324 | (2,295,396 | ) | |||||
Net increase in net assets resulting from operations | 2,427,415 | 6,677,983 | ||||||
Dividends and distributions (Note 1) | ||||||||
Dividends from net investment income | ||||||||
Class A | (1,716,775 | ) | (3,695,744 | ) | ||||
Class B | (304,935 | ) | (726,345 | ) | ||||
Class C | (28,569 | ) | (73,929 | ) | ||||
Class Z | (82,448 | ) | (200,892 | ) | ||||
(2,132,727 | ) | (4,696,910 | ) | |||||
Distributions from net realized gains | ||||||||
Class A | (2,399,014 | ) | (1,462,100 | ) | ||||
Class B | (467,445 | ) | (319,113 | ) | ||||
Class C | (45,246 | ) | (34,029 | ) | ||||
Class Z | (117,944 | ) | (91,318 | ) | ||||
(3,029,649 | ) | (1,906,560 | ) | |||||
Series share transactions (Net of share conversions) (Note 6) | ||||||||
Net proceeds from shares sold | 1,950,763 | 9,360,453 | ||||||
Net asset value of shares issued in | 3,284,652 | 3,991,685 | ||||||
Cost of shares reacquired | (10,653,990 | ) | (25,439,241 | ) | ||||
Net decrease in net assets from Series share transactions | (5,418,575 | ) | (12,087,103 | ) | ||||
Total decrease | (8,153,536 | ) | (12,012,590 | ) | ||||
Net Assets | ||||||||
Beginning of period | 113,158,075 | 125,170,665 | ||||||
End of period | $ | 105,004,539 | $ | 113,158,075 | ||||
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 15 |
Notes to Financial Statements
(Unaudited)
Dryden California Municipal Fund (the “Fund”), is registered under the Investment Company Act of 1940 as an open-end management investment company. The Fund was organized as a Massachusetts business trust on May 18, 1984 and consists of two series. These financial statements relate only to California Series (the “Series”). The financial statements of the other series are not presented herein. The assets of each series are invested in separate, independently managed portfolios. The Series commenced investment operations on September 19, 1984. The Series is diversified and seeks to achieve its investment objective of obtaining the maximum amount of income exempt from federal and California state income taxes with the minimum of risk by investing in “investment grade” tax-exempt securities whose ratings are within the four highest ratings categories by a nationally recognized statistical rating organization or, if not rated, are of comparable quality. The ability of the issuers of the securities held by the Series to meet their obligations may be affected by economic developments in a specific state, industry or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund, and the Series, in the preparation of its financial statements.
Securities Valuations: The Fund values municipal securities (including commitments to purchase such securities on a “when-issued” basis) as of the close of trading on the New York Stock Exchange, on the basis of prices provided by a pricing service which uses information with respect to transactions in comparable securities and various relationships between securities in determining values. Securities listed on a securities exchange (other than options on securities and indices) 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 Nasdaq Official Closing Price (“NOCP”) on the day of valuation, or if there was no NOCP, at the last sale price. Securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadviser, to be over-the-counter, are valued at market value using prices provided, by an independent pricing agent or principal market marker. 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
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mean between the most recently quoted prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available or whose values have been affected by events occurring after the close of the security’s foreign market and before the Fund’s normal pricing time, are valued at fair value in accordance with Board of Trustees’ approved fair valuation procedures. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.
Short-term securities which mature in sixty days or less are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term securities which mature in more than sixty days are valued at current market quotations.
Restricted Securities: The Series may hold up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). The restricted securities held by the Series at February 28, 2005 include registration rights under which the Series may demand registration by the issuers. Restricted securities, sometimes referred to as private placements, are valued pursuant to the valuation procedures noted above.
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 Series 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 Series 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 or loss on financial futures contracts.
The Series invests in financial futures contracts in order to hedge its existing portfolio securities, or securities the Series intends to purchase, against fluctuations in value caused by changes in prevailing interest rates or market conditions. Should interest
Dryden California Municipal Fund/California Series | 17 |
Notes to Financial Statements
Cont’d
rates move unexpectedly, the Series 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.
Inverse Floaters: The Series invests in variable rate securities commonly called “inverse floaters”. The interest rates on these securities have an inverse relationship to the interest rate of other securities or the value of an index. Changes in interest rates on the other security or index inversely affect the rate paid on the inverse floater, and the inverse floater’s price will be more volatile than that of a fixed-rate bond. Additionally, some of these securities contain a “leverage factor” whereby the interest rate moves inversely by a “factor” to the benchmark rate. Certain interest rate movements and other market factors can substantially affect the liquidity of inverse floating rate notes.
Options: The Series 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 Series currently owns or intends to purchase. The Series’ principal reason for writing options is to realize, through receipt of premiums, a greater current return than would be realized on the underlying security alone. When the Series purchases an option, it pays a premium and an amount equal to that premium is recorded as an asset. When the Series 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 Series 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 determining whether the Series 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 Series, 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 Series bears the market risk of an unfavorable change in the price of the security underlying the written option. The Series, as purchaser of an option, bears the risk of the potential inability of the counterparties to meet the terms of their contracts.
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Interest Rate Swaps: The Series may enter into interest rate swaps. In a simple interest rate swap, one investor pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps were conceived as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time.
During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, the Series will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Series’ basis in the contract, if any.
The Series is exposed to credit loss in the event of non-performance by the other party to the interest rate swap. However, the Series does not anticipate non-performance by any counterparty.
Written options, future contracts and swap contracts involve elements of both market and certain risk in excess of the amounts reflected in the Statement of Assets and Liabilities.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized and unrealized gains and losses from securities transactions are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis.
Net investment income or loss (other than distribution fees, which are charged directly to the respective class) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class at the beginning of the day.
Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is the Series’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
Dividends and Distributions: The Series declares daily dividends from net investment income. Payment of dividends is made monthly. Distributions of net capital gains, if any, are made annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulation and which may differ
Dryden California Municipal Fund/California Series | 19 |
Notes to Financial Statements
Cont’d
from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.
Custody Fee Credits: The Fund has an arrangement with its custodian bank, whereby uninvested assets earn credits which reduce the fees charged by the custodian. The Fund could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if they had not entered into such arrangements.
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
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 the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Series. In connection therewith, PIM is obligated to keep certain books and records of the Series. PI pays for the services of PIM, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is accrued daily and payable monthly, at an annual rate of .50 of 1% of the average daily net assets of the Series up to $1 billion and .45 of 1% of the average daily net assets of the Series in excess of $1 billion. The effective management fee rate was .50 of 1% for the six months ended February 28, 2005.
The Series 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 of the Series. The Series compensates PIMS for distributing and servicing the Series’ 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 it. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor for Class Z shares of the Series.
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Pursuant to the Class A, B and C Plans, the Series compensates PIMS for distribution-related activities at an annual rate of up to .30 of 1%, .50 of 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively. PIMS has contractually agreed to limit such fees to .25% and ..75 of 1% of the Class A and C shares, respectively.
PIMS has advised the Series that they received approximately $15,700 in front-end sales charges resulting from sales of Class A shares during the six months ended February 28, 2005. 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 Series that for the six months ended February 28, 2005, it received approximately $7,000 in contingent deferred sales charges imposed upon redemptions by Class B shareholders. Redemptions by Class C shareholders were not subject to any contingent deferred sales charges during the period.
PI, PIMS and PIM are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
The Series, along with other affiliated registered investment companies (the “Companies”), is a party to a syndicated credit agreement (“SCA”) with a group of banks. Beginning May 1, 2004, the SCA provided for a commitment of $500 million. Interest on any borrowings under the SCA would be incurred at market rates. The Funds paid a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued daily 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 funding for capital share redemptions. The expiration date of the SCA was October 29, 2004. Effective October 29, 2004, the Companies entered into a revised credit agreement with two banks. The commitment under the revised credit agreement continues to be $500 million. The Companies pay a commitment fee of .075 of 1% of the unused portion of the revised credit agreement. The expiration date of the revised credit agreement is October 28, 2005. The Fund did not borrow any amounts pursuant to the SCA during the six months ended February 28, 2005.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. During the six months ended February 28, 2005, the Series incurred fees of approximately $15,100 for the services of PMFS. As of February 28 2005, approximately $2,500 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, where applicable.
Dryden California Municipal Fund/California Series | 21 |
Notes to Financial Statements
Cont’d
The Series 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 Series incurred approximately $4,000 in total networking fees, of which the amounts relating to the services of Wachovia Securities, LLC (“Wachovia”) and First Clearing, LLC (“First Clearing”) affiliates of PI, were approximately $40 and $2,800, respectively, for the six months ended February 28, 2005. As of February 28, 2005 approximately $900 of such fees were due to First Clearing. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.
For the six months ended February 28, 2005, the Series did not pay any brokerage commissions to Wachovia.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments, for the six months ended February 28, 2005 were $4,408,053 and $10,707,319 respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of February 28, 2005 were as follows:
Tax Basis | Appreciation | Depreciation | Total Net Unrealized | |||
$95,357,844 | $8,829,655 | $31,440 | $8,798,215 |
The difference between book basis and tax basis is primarily attributable to the difference in the treatment of market discount for book and tax purposes .
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Note 6. Capital
The Series 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 4%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential. Class B shares are sold with a CDSC which declines from 5% to zero depending upon the period of time the shares are held. Class C shares sold within 12 months of purchase are subject to a CDSC of 1%. 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 qualify 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 limited group of investors.
The Series has authorized an unlimited number of shares of beneficial interest of each class at $.01 par value per share.
Transactions in shares of beneficial interest were as follows:
Class A | Shares | Amount | |||||
Six months ended February 28, 2005: | |||||||
Shares sold | 109,216 | $ | 1,296,901 | ||||
Shares issued in reinvestment of dividends and distributions | 222,493 | 2,606,759 | |||||
Shares reacquired | (622,461 | ) | (7,378,382 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (290,752 | ) | (3,474,722 | ) | |||
Shares issued upon conversion from Class B | 112,664 | 1,329,725 | |||||
Net increase (decrease) in shares outstanding | (178,088 | ) | $ | (2,144,997 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 341,993 | $ | 4,105,547 | ||||
Shares issued in reinvestment of dividends and distributions | 259,117 | 3,116,626 | |||||
Shares reacquired | (1,347,278 | ) | (16,060,612 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (746,168 | ) | (8,838,439 | ) | |||
Shares issued upon conversion from Class B | 134,385 | 1,619,117 | |||||
Net increase (decrease) in shares outstanding | (611,783 | ) | $ | (7,219,322 | ) | ||
Dryden California Municipal Fund/California Series | 23 |
Notes to Financial Statements
Cont’d
Class B | Shares | Amount | |||||
Six months ended February 28, 2005: | |||||||
Shares sold | 25,779 | $ | 306,919 | ||||
Shares issued in reinvestment of dividends and distributions | 36,845 | 431,452 | |||||
Shares reacquired | (69,785 | ) | (824,427 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (7,161 | ) | (86,056 | ) | |||
Shares reacquired upon conversion into Class A | (112,664 | ) | (1,329,725 | ) | |||
Net increase (decrease) in shares outstanding | (119,825 | ) | $ | (1,415,781 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 63,757 | $ | 764,836 | ||||
Shares issued in reinvestment of dividends and distributions | 46,396 | 558,519 | |||||
Shares reacquired | (270,220 | ) | (3,207,869 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (160,067 | ) | (1,884,514 | ) | |||
Shares reacquired upon conversion into Class A | (134,439 | ) | (1,619,117 | ) | |||
Net increase (decrease) in shares outstanding | (294,506 | ) | $ | (3,503,631 | ) | ||
Class C | |||||||
Six months ended February 28, 2005: | |||||||
Shares sold | 2,170 | $ | 25,894 | ||||
Shares issued in reinvestment of dividends and distributions | 5,671 | 66,428 | |||||
Shares reacquired | (31,378 | ) | (370,966 | ) | |||
Net increase (decrease) in shares outstanding | (23,537 | ) | $ | (278,644 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 10,855 | $ | 132,326 | ||||
Shares issued in reinvestment of dividends and distributions | 7,455 | 89,714 | |||||
Shares reacquired | (83,932 | ) | (1,004,262 | ) | |||
Net increase (decrease) in shares outstanding | (65,622 | ) | $ | (782,222 | ) | ||
Class Z | |||||||
Six months ended February 28, 2005: | |||||||
Shares sold | 26,953 | $ | 321,049 | ||||
Shares issued in reinvestment of dividends and distributions | 15,354 | 180,013 | |||||
Shares reacquired | (176,516 | ) | (2,080,215 | ) | |||
Net increase (decrease) in shares outstanding | (134,209 | ) | $ | (1,579,153 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 363,951 | $ | 4,357,744 | ||||
Shares issued in reinvestment of dividends and distributions | 18,845 | 226,826 | |||||
Shares reacquired | (431,062 | ) | (5,166,498 | ) | |||
Net increase (decrease) in shares outstanding | (48,266 | ) | $ | (581,928 | ) | ||
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Financial Highlights
FEBRUARY 28, 2005 | SEMIANNUAL REPORT |
Dryden California Municipal Fund
California Series
Financial Highlights
(Unaudited)
Class A | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 11.97 | ||
Income (Loss) from investment operations | ||||
Net investment income | .23 | |||
Net realized and unrealized gain (loss) on investment transactions | .03 | |||
Total from investment operations | .26 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.23 | ) | ||
Distributions in excess of net investment income | — | |||
Distributions from net realized gains | (.33 | ) | ||
Total dividends and distributions | (.56 | ) | ||
Net asset value, end of period | $ | 11.67 | ||
Total Return(b): | 2.28 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 84,924 | ||
Average net assets (000) | $ | 87,612 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees(d) | 1.02 | %(e) | ||
Expenses, excluding distribution and service (12b-1) fees | .77 | %(e) | ||
Net investment income | 3.96 | %(e) | ||
For Class A, B, C and Z shares: | ||||
Portfolio turnover rate | 4 | %(f) |
(a) | Less than $.005 per share. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns for periods less than a full year are not annualized. |
(c) | Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and increase the ratio of net investment income from 4.37% to 4.38%. Per share amounts and ratios for the year ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | The distributor of the Series contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% on the average daily net assets of Class A shares. |
(e) | Annualized. |
(f) | Not annualized. |
See Notes to Financial Statements.
26 | Visit our website at www.jennisondryden.com |
Class A | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | $ | 11.45 | |||||||||
.47 | .51 | .53 | .56 | .58 | ||||||||||||||
.20 | (.27 | ) | .05 | .58 | .33 | |||||||||||||
.67 | .24 | .58 | 1.14 | .91 | ||||||||||||||
(.47 | ) | (.51 | ) | (.53 | ) | (.56 | ) | (.58 | ) | |||||||||
— | — | — | — | — | (a) | |||||||||||||
(.18 | ) | (.08 | ) | (.11 | ) | — | — | |||||||||||
(.65 | ) | (.59 | ) | (.64 | ) | (.56 | ) | (.58 | ) | |||||||||
$ | 11.97 | $ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | |||||||||
5.75 | % | 2.02 | % | 4.92 | % | 9.91 | % | 8.35 | % | |||||||||
$ | 89,239 | $ | 96,409 | $ | 102,729 | $ | 103,368 | $ | 94,776 | |||||||||
$ | 94,033 | $ | 103,428 | $ | 102,429 | $ | 99,324 | $ | 93,560 | |||||||||
1.04 | % | .97 | % | .97 | % | .98 | % | .93 | % | |||||||||
.79 | % | .72 | % | .72 | % | .73 | % | .68 | % | |||||||||
3.94 | % | 4.22 | % | 4.38 | % | 4.66 | % | 5.13 | % | |||||||||
74 | % | 63 | % | 30 | % | 48 | % | 25 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 27 |
Financial Highlights
(Unaudited) Cont’d
Class B | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 11.97 | ||
Income (Loss) from investment operations | ||||
Net investment income | .22 | |||
Net realized and unrealized gain (loss) on investment transactions | .03 | |||
Total from investment operations | .25 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.22 | ) | ||
Distributions in excess of net investment income | — | |||
Distributions from net realized gains | (.33 | ) | ||
Total dividends and distributions | (.55 | ) | ||
Net asset value, end of period | $ | 11.67 | ||
Total Return(b): | 2.15 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 15,825 | ||
Average net assets (000) | $ | 16,618 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 1.27 | %(d) | ||
Expenses, excluding distribution and service (12b-1) fees | .77 | %(d) | ||
Net investment income | 3.71 | %(d) |
(a) | Less than $.005 per share. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns for periods less than a full year are not annualized. |
(c) | Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the year ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | Annualized. |
See Notes to Financial Statements.
28 | Visit our website at www.jennisondryden.com |
Class B | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | $ | 11.44 | |||||||||
.44 | .48 | .50 | .53 | .56 | ||||||||||||||
.20 | (.27 | ) | .05 | .58 | .34 | |||||||||||||
.64 | .21 | .55 | 1.11 | .90 | ||||||||||||||
(.44 | ) | (.48 | ) | (.50 | ) | (.53 | ) | (.56 | ) | |||||||||
— | — | — | — | — | (a) | |||||||||||||
(.18 | ) | (.08 | ) | (.11 | ) | — | — | |||||||||||
(.62 | ) | (.56 | ) | (.61 | ) | (.53 | ) | (.56 | ) | |||||||||
$ | 11.97 | $ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | |||||||||
5.48 | % | 1.76 | % | 4.67 | % | 9.63 | % | 8.18 | % | |||||||||
$ | 17,666 | $ | 21,157 | $ | 25,787 | $ | 27,554 | $ | 32,403 | |||||||||
$ | 19,723 | $ | 23,862 | $ | 26,110 | $ | 28,540 | $ | 38,348 | |||||||||
1.29 | % | 1.22 | % | 1.22 | % | 1.23 | % | 1.18 | % | |||||||||
.79 | % | .72 | % | .72 | % | .73 | % | .68 | % | |||||||||
3.69 | % | 3.97 | % | 4.13 | % | 4.41 | % | 4.89 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 29 |
Financial Highlights
(Unaudited) Cont’d
Class C | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 11.97 | ||
Income (Loss) from investment operations | ||||
Net investment income | .20 | |||
Net realized and unrealized gain (loss) on investment transactions | .03 | |||
Total from investment operations | .23 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.20 | ) | ||
Distributions in excess of net investment income | — | |||
Distributions from net realized gains | (.33 | ) | ||
Total dividends and distributions | (.53 | ) | ||
Net asset value, end of period | $ | 11.67 | ||
Total Return(b): | 2.02 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 1,418 | ||
Average net assets (000) | $ | 1,672 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees(d) | 1.52 | %(e) | ||
Expenses, excluding distribution and service (12b-1) fees | .77 | %(e) | ||
Net investment income | 3.46 | %(e) |
(a) | Less than $.005 per share. |
(b) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns for periods less than a full year are not annualized. |
(c) | Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the year ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | The distributor of the Series contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% on the average daily net assets of Class C shares. |
(e) | Annualized. |
See Notes to Financial Statements.
30 | Visit our website at www.jennisondryden.com |
Class C | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | $ | 11.44 | |||||||||
.41 | .45 | .47 | .50 | .53 | ||||||||||||||
.20 | (.27 | ) | .05 | .58 | .34 | |||||||||||||
.61 | .18 | .52 | 1.08 | .87 | ||||||||||||||
(.41 | ) | (.45 | ) | (.47 | ) | (.50 | ) | (.53 | ) | |||||||||
— | — | — | — | — | (a) | |||||||||||||
(.18 | ) | (.08 | ) | (.11 | ) | — | — | |||||||||||
(.59 | ) | (.53 | ) | (.58 | ) | (.50 | ) | (.53 | ) | |||||||||
$ | 11.97 | $ | 11.95 | $ | 12.30 | $ | 12.36 | $ | 11.78 | |||||||||
5.22 | % | 1.51 | % | 4.41 | % | 9.36 | % | 7.91 | % | |||||||||
$ | 1,736 | $ | 2,518 | $ | 2,098 | $ | 1,519 | $ | 1,112 | |||||||||
$ | 2,148 | $ | 2,271 | $ | 1,778 | $ | 1,226 | $ | 1,290 | |||||||||
1.54 | % | 1.47 | % | 1.47 | % | 1.48 | % | 1.43 | % | |||||||||
.79 | % | .72 | % | .72 | % | .73 | % | .68 | % | |||||||||
3.45 | % | 3.74 | % | 3.89 | % | 4.14 | % | 4.64 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 31 |
Financial Highlights
(Unaudited) Cont’d
Class Z | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning Of Period | $ | 11.97 | ||
Income (Loss) from investment operations | ||||
Net investment income | .25 | |||
Net realized and unrealized gain (loss) on investment transactions | .03 | |||
Total from investment operations | .28 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.25 | ) | ||
Distributions in excess of net investment income | — | |||
Distributions from net realized gains | (.33 | ) | ||
Total dividends and distributions | (.58 | ) | ||
Net asset value, end of period | $ | 11.67 | ||
Total Return(b): | 2.40 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 2,838 | ||
Average net assets (000) | $ | 3,982 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | .77 | %(d) | ||
Expenses, excluding distribution and service (12b-1) fees | .77 | %(d) | ||
Net investment income | 4.19 | %(d) |
(a) | Less than $.005 per share. |
(b) | Total return does not consider the effects of sales load. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns for periods less than a full year are not annualized. |
(c) | Effective September 1, 2001, the Series has adopted the provisions of the AICPA Audit and Accounting Guide for for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended August 31, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $.005 and no effect on the ratio of net investment income. Per share amounts and ratios for the year ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | Annualized. |
See Notes to Financial Statements.
32 | Visit our website at www.jennisondryden.com |
Class Z | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 11.95 | $ | 12.30 | $ | 12.37 | $ | 11.79 | $ | 11.45 | |||||||||
.50 | .54 | .56 | .59 | .61 | ||||||||||||||
.20 | (.27 | ) | .04 | .58 | .34 | |||||||||||||
.70 | .27 | .60 | 1.17 | .95 | ||||||||||||||
(.50 | ) | (.54 | ) | (.56 | ) | (.59 | ) | (.61 | ) | |||||||||
— | — | — | — | — | (a) | |||||||||||||
(.18 | ) | (.08 | ) | (.11 | ) | — | — | |||||||||||
(.68 | ) | (.62 | ) | (.67 | ) | (.59 | ) | (.61 | ) | |||||||||
$ | 11.97 | $ | 11.95 | $ | 12.30 | $ | 12.37 | $ | 11.79 | |||||||||
6.01 | % | 2.27 | % | 5.09 | % | 10.17 | % | 8.71 | % | |||||||||
$ | 4,517 | $ | 5,087 | $ | 3,832 | $ | 2,298 | $ | 1,599 | |||||||||
$ | 4,805 | $ | 4,300 | $ | 2,778 | $ | 1,708 | $ | 1,231 | |||||||||
.79 | % | .72 | % | .72 | % | .73 | % | .68 | % | |||||||||
.79 | % | .72 | % | .72 | % | .73 | % | .68 | % | |||||||||
4.19 | % | 4.49 | % | 4.64 | % | 4.90 | % | 5.37 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Series | 33 |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.jennisondryden.com |
PROXY VOTING |
The Board of Trustees of the Fund has delegated to the Series’ investment adviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Series. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s (the Commission) website at http://www.sec.gov. Information regarding how the Series voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2004, is available on the Series’ website at http://www.prudential.com and on the Commission’s website at http://www.sec.gov. |
TRUSTEES |
David E.A. Carson • Robert F. Gunia • Robert E. La Blanc • Douglas H. McCorkindale • Richard A. Redeker • Judy A. Rice • Robin B. Smith • Stephen G. Stoneburn • Clay T. Whitehead |
OFFICERS |
Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • William V. Healey, Chief Legal Officer • Deborah A. Docs, Secretary • Jonathan D. Shain, Assistant Secretary • Maryanne Ryan, Anti-Money Laundering Officer • Helen Gurian, Acting Anti-Money Laundering Compliance Officer • Lee D. Augsburger, Chief Compliance Officer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
INVESTMENT ADVISER | Prudential Investment Management, Inc. | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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 19176 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 757 Third Avenue New York, NY 10017 | ||
FUND COUNSEL | Shearman & Sterling LLP | 599 Lexington Avenue New York, NY 10022 |
Dryden California Municipal Fund/California Series | ||||||||||||
Share Class | A | B | C | Z | ||||||||
NASDAQ | PRMCX | PBCMX | PCCSX | PZCSX | ||||||||
CUSIP | 262433881 | 262433873 | 262433865 | 262433857 | ||||||||
An investor should consider the investment objectives, risks, and charges and expenses of the Series carefully before investing. The prospectus for the Series contains this and other information about the Series. An investor may obtain a prospectus by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The prospectus should be read carefully before investing. |
Prudential Fixed Income is a business unit of Prudential Investment Management, Inc. (PIM). Quantitative Management Associates LLC, Jennison Associates LLC, and PIM are registered investment advisers and Prudential Financial companies. |
The views expressed in this report and information about the Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of February 28, 2005, were not audited, and accordingly, no auditor’s opinion is expressed on them. |
E-DELIVERY |
To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders of the Series can communicate directly with the Board of Trustees by writing to the Chair of the Board, Dryden California Municipal Fund/California Series, PO Box 13964, Philadelphia, PA 19176. Shareholders can communicate directly with an individual Trustee by writing to that Trustee at Dryden California Municipal Fund/California Series, PO Box 13964, Philadelphia, PA 19176. Such communications to the Board or individual Trustees are not screened before being delivered to the addressee. |
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE |
The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The Series’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Series’ Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330 (732-0330). The Series will provide a full list of its portfolio holdings as of the end of each fiscal quarter on its website at www.jennisondryden.com approximately 60 days after the end of the fiscal quarter. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
Dryden California Municipal Fund/California Series | ||||||||||||
Share Class | A | B | C | Z | ||||||||
NASDAQ | PRMCX | PBCMX | PCCSX | PZCSX | ||||||||
CUSIP | 262433881 | 262433873 | 262433865 | 262433857 | ||||||||
MF116E2 IFS-A103207 Ed. 04/2005
Dryden California Municipal Fund/California Income Series
FEBRUARY 28, 2005 | SEMIANNUAL REPORT |
FUND TYPE
Municipal bond
OBJECTIVE
Maximize current income that is exempt from California state and federal income taxes, consistent with the preservation 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 Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter.
JennisonDryden is a registered trademark of The Prudential Insurance Company of America.
Dear Shareholder,
April 15, 2005
We hope that you find the semiannual report for the California Income Series informative and useful. As a JennisonDryden Mutual Fund shareholder, you may be thinking about where you can find additional growth opportunities. You could invest in last year’s top-performing asset class and hope that history repeats itself or you could stay in cash while waiting for the “right moment” to invest.
We believe it is wise to take advantage of developing domestic and global investment opportunities through a diversified portfolio of stock and bond mutual funds. A diversified asset allocation offers two advantages. It helps you manage downside risk by not being overly exposed to any particular asset class, plus it gives you a better opportunity to have at least some of your assets in the right place at the right time. Your financial professional can help you create a diversified investment plan that may include mutual funds that cover all the basic asset classes and is reflective of your personal investor profile and tolerance for risk.
JennisonDryden Mutual Funds give you a wide range of choices that can help you make progress toward your financial goals. Our funds offer the experience, resources, and professional discipline of three leading asset managers. They are recognized and respected in the institutional market and by discerning investors for excellence in their respective strategies. JennisonDryden equity funds are advised by Jennison Associates LLC and/or Quantitative Management Associates LLC (QMA). Prudential Investment Management, Inc. (PIM) advises the JennisonDryden fixed income and money market funds. Jennison Associates, QMA, and PIM are registered investment advisers and Prudential Financial companies.
Thank you for choosing JennisonDryden Mutual Funds.
Sincerely,
Judy A. Rice, President
Dryden California Municipal Fund/California Income Series
Dryden California Municipal Fund/California Income Series | 1 |
Your Series’ Performance
Series objective
The investment objective of the Dryden California Municipal Fund/California Income Series (the Series) is to maximize current income that is exempt from California state and federal income taxes, consistent with the preservation of capital. There can be no assurance that the Series will achieve its investment objective.
Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data current to the most recent month-end by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The maximum initial sales charge is 4.00% (Class A shares).
Cumulative Total Returns1 as of 2/28/05 | |||||||||||||
Six Months | One Year | Five Years | Ten Years | Since Inception2 | |||||||||
Class A | 2.76 | % | 2.89 | % | 38.46 | % | 84.14% (82.97) | 161.81% (154.44) | |||||
Class B | 2.63 | 2.63 | 36.76 | 78.61 (77.48) | 82.26 (80.11) | ||||||||
Class C | 2.50 | 2.37 | 35.06 | 74.21 (73.10) | 77.96 (76.34) | ||||||||
Class Z | 2.89 | 3.14 | 40.19 | N/A | 64.98 (64.68) | ||||||||
Lehman Brothers Municipal Bond Index3 | 2.40 | 2.96 | 41.42 | 87.96 | *** | ||||||||
Lipper California (CA) Muni Debt Funds Avg.4 | 2.76 | 2.90 | 37.25 | 76.02 | **** | ||||||||
Average Annual Total Returns1 as of 3/31/05 | |||||||||||||
One Year | Five Years | Ten Years | Since Inception2 | ||||||||||
Class A | –1.13 | % | 5.13 | % | 5.65% (5.59) | 6.59% (6.37) | |||||||
Class B | –2.21 | 5.57 | 5.76 (5.70) | 5.38 (5.27) | |||||||||
Class C | 1.49 | 5.47 | 5.50 (5.43) | 5.48 (5.39) | |||||||||
Class Z | 3.25 | 6.26 | N/A | 5.96 (5.94) | |||||||||
Lehman Brothers Municipal Bond Index3 | 2.67 | 6.58 | 6.33 | *** | |||||||||
Lipper California (CA) Muni Debt Funds Avg.4 | 2.86 | 5.82 | 5.62 | **** |
Distributions and Yields1 as of 2/28/05 | ||||||||||||
Taxable Equivalent 30-Day Yield5 at Tax Rates of | ||||||||||||
Total Distributions Paid for Six Months | 30-Day SEC Yield | 33% | 35% | |||||||||
Class A | $ | 0.23 | 3.08 | % | 5.07 | % | 5.22 | % | ||||
Class B | $ | 0.22 | 2.96 | 4.87 | 5.02 | |||||||
Class C | $ | 0.20 | 2.70 | 4.44 | 4.58 | |||||||
Class Z | $ | 0.24 | 3.46 | 5.69 | 5.87 |
2 | Visit our website at www.jennisondryden.com |
The cumulative total returns do not reflect the deduction of applicable sales charges. If reflected, the applicable sales charges would reduce the cumulative total returns performance quoted. Class A shares are subject to a maximum front-end sales charge of 4.00%. Under certain circumstances, Class A shares may be subject to a contingent deferred sales charge (CDSC) of 1%. Class B and Class C shares are subject to a maximum CDSC of 5% and 1% respectively. Class Z shares are not subject to a sales charge.
1Source: Prudential Investments LLC and Lipper Inc. The average annual total returns take into account applicable sales charges. During certain periods shown, fee waivers and/or expense reimbursements were in effect. Without such fee waivers and expense reimbursements, the returns for the classes would have been lower. Class A, Class B, and Class C shares are subject to an annual distribution and service (12b-1) fee of up to 0.3%, 0.5%, and 1.0% respectively. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. Class Z shares are not subject to a 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. Without waiver of fees and/or expense subsidization, the Series’ returns would have been lower, as indicated in parentheses.
2Inception dates: Class A, 12/3/90; Class B, 12/7/93; Class C, 8/1/94; and Class Z, 9/18/96.
3The Lehman Brothers Municipal Bond Index is an unmanaged index of over 39,000 long-term investment-grade municipal bonds. It gives a broad look at how long-term investment-grade municipal bonds have performed.
4The Lipper CA Muni Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper CA Muni Debt Funds category for the periods noted. Funds in the Lipper Average limit their assets to those securities that are exempt from taxation in California.
5Taxable equivalent yields reflect federal and applicable state tax rates.
Investors cannot invest directly in an index. The returns for the Lehman Brothers Municipal Bond Index 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.
***Lehman Brothers Municipal Bond Index Closest Month-End to Inception cumulative total returns as of 2/28/05 are 159.64% for Class A, 92.66% for Class B, 93.91% for Class C, and 66.34% for Class Z. Lehman Brothers Municipal Bond Index Closest Month-End to Inception average annual total returns as of 3/31/05 are 6.84% for Class A, 5.90% for Class B, 6.34% for Class C, and 6.09% for Class Z.
****Lipper Average Closest Month-End to Inception cumulative total returns as of 2/28/05 are 143.26% for Class A, 80.43% for Class B, 81.54% for Class C, and 56.58% for Class Z. Lipper Average Closest Month-End to Inception average annual total returns as of 3/31/05 are 6.34% for Class A, 5.28% for Class B, 5.67% for Class C, and 5.34% for Class Z.
Dryden California Municipal Fund/California Income Series | 3 |
Your Series’ Performance (continued)
Five Largest Issues expressed as a percentage of net assets as of 2/28/05 | |||
Foothill/Eastern Trans. Corr. Agcy., Toll Rd. Rev., 1/01/10, 7.15% | 2.9 | % | |
Southern Pub. Pwr. Auth., Palo Verde Proj., 7/01/16, Zero Coupon | 2.6 | ||
Orange Cnty. Loc. Trans. Auth., Sales. Tax Rev., 2/14/11, 6.20% | 2.3 | ||
California St. Pub. Wks. Brd., Rev., Dept. Mental Hlth., 6/01/18, 5.50% | 2.3 | ||
Foothill/Eastern Trans. Cour. Agcy., Toll Rd. Rev., 1/15/28, Zero Coupon | 2.1 |
Issues are subject to change.
Credit Quality expressed as a percentage of net assets as of 2/28/05 | |||
Aaa | 51.0 | % | |
Aa | 3.0 | ||
A | 9.0 | ||
Baa | 12.2 | ||
Ba | 1.4 | ||
B | 0.5 | ||
Not Rated | 21.8 | ||
Total Investments | 98.9 | ||
Other assets in excess of liabilities | 1.1 | ||
Net Assets | 100.0 | ||
Source: Moody’s rating, defaulting to S&P when not rated by Moody’s.
Credit quality is subject to change.
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Fees and Expenses (Unaudited)
As a shareholder of the Series, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Series expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested on September 1, 2004, at the beginning of the period, and held through the six-month period ended February 28, 2005.
The Series may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to Individual Retirement Accounts (IRAs), Section 403(b) accounts, and Section 529 plan accounts. As of the close of the six months covered by the table, IRA fees included a setup fee of $5, a maintenance fee of up to $36 annually ($18 for the six-month period), and a termination fee of $10. Section 403(b) accounts and Section 529 plan accounts are each charged an annual $25 fiduciary maintenance fee ($12.50 for the six-month period). Some of the fees vary in amount, or are waived, based on your total account balance or the number of JennisonDryden or Strategic Partners funds, including the Series, that you own. You should consider the additional fees that were charged to your Series account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.
Actual Expenses
The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before
Dryden California Municipal Fund/California Income Series | 5 |
Fees and Expenses (continued)
expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads). Therefore the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Dryden California Municipal Fund/ California Income Series | Beginning Account Value September 1, 2004 | Ending Account Value February 28, 2005 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six- Month Period* | ||||||||||
Class A | Actual | $ | 1,000 | $ | 1,028 | 0.93 | % | $ | 4.68 | |||||
Hypothetical | $ | 1,000 | $ | 1,020 | 0.93 | % | $ | 4.66 | ||||||
Class B | Actual | $ | 1,000 | $ | 1,026 | 1.18 | % | $ | 5.93 | |||||
Hypothetical | $ | 1,000 | $ | 1,019 | 1.18 | % | $ | 5.91 | ||||||
Class C | Actual | $ | 1,000 | $ | 1,025 | 1.43 | % | $ | 7.18 | |||||
Hypothetical | $ | 1,000 | $ | 1,018 | 1.43 | % | $ | 7.16 | ||||||
Class Z | Actual | $ | 1,000 | $ | 1,029 | 0.68 | % | $ | 3.42 | |||||
Hypothetical | $ | 1,000 | $ | 1,021 | 0.68 | % | $ | 3.41 |
* Series expenses for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 181 days in the six-month period ended February 28, 2005, and divided by the 365 days in the Series’ fiscal year ending in August 31, 2005 (to reflect the six-month period).
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Portfolio of Investments
as of February 28, 2005 (Unaudited)
Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | |||||||
LONG-TERM INVESTMENTS 97.4% | ||||||||||||
Municipal Bonds | ||||||||||||
Abag Fin. Auth. For Nonprofit Corp. Rev., San Diego Hosp. Assoc., Ser. C | Baa1 | 5.375% | 3/01/21 | $ | 1,665 | $ | 1,743,655 | |||||
Brea Redev. Agcy., Rfdg., Tax Alloc., Ser. A, A.M.B.A.C. | Aaa | 5.50 | 8/01/12 | 1,055 | 1,185,493 | |||||||
Rfdg., Tax Alloc., Ser. A, A.M.B.A.C. | Aaa | 5.50 | 8/01/19 | 3,350 | 3,749,822 | |||||||
California Edl. Facs. Auth. Rev., Pomona Coll., | Aaa | Zero | 7/01/31 | 3,155 | 799,477 | |||||||
Rfdg. Stanford Univ., Ser. R | Aaa | 5.00 | 11/01/21 | 3,700 | 3,933,063 | |||||||
California Infrastructure & Econ. Dev. Bk. Rev., Scripps Research Inst., Ser. A | Aa3 | 5.75 | 7/01/30 | 1,500 | 1,606,515 | |||||||
California Rural Home Mtge. Fin. Auth., Sngl. Fam. Mtge. Rev., Mtge. Bkd. Secs., Ser. D, F.N.M.A., A.M.T., G.N.M.A. | AAA(c) | 6.00 | 12/01/31 | 380 | 382,386 | |||||||
California St. Cmnty. Cap. Apprec. Cmnty. Facs., Dist. No. 97-1 | NR | Zero | 9/01/22 | 4,440 | 1,617,892 | |||||||
California St. Dept. Wtr. Res. Pwr., Ser. A | A2 | 5.00 | 5/01/17 | 3,320 | 3,535,070 | |||||||
California St. Pub. Wks. Brd., Rev., Dept. Mental Hlth., Ser. A | Baa1 | 5.50 | 6/01/18 | 4,000 | 4,463,440 | |||||||
California St. Univ. Rev. & Coll., Systemwide, Ser. A, A.M.B.A.C. | Aaa | 5.50 | 11/01/16 | 1,350 | 1,523,502 | |||||||
California St., G.O. | A3 | 5.50 | 4/01/30 | 3,000 | 3,275,490 | |||||||
G.O., A.M.B.A.C. | Aaa | 5.50 | 3/01/16 | 2,000 | 2,224,200 | |||||||
G.O., M.B.I.A. | Aaa | 5.25 | 2/01/27 | 2,500 | 2,661,450 | |||||||
G.O., Ser. A, M.B.I.A. | Aaa | 5.25 | 7/01/13 | 2,985 | 3,343,887 |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 7 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
California Statewide Cmntys. Dev. Auth., C.O.P., F.S.A., E.T.M. | Aaa | 5.30% | 12/01/15 | $ | 1,900 | $ | 2,008,148 | ||||||
Rev., Kaiser Permanente, | A(c) | 2.30 | 5/01/07 | 1,000 | 985,060 | ||||||||
Carson City Ltd. Oblig. Impvt. Rev., Assmt. Dist., No. 92-1 | NR | 7.375 | 9/02/22 | 360 | 372,600 | ||||||||
Central California Joint Pwrs. Hlth. Fin. Auth., Cmnty. Hosps., C.O.P. | Baa2 | 6.00 | 2/01/30 | 2,000 | 2,080,540 | ||||||||
Chula Vista Cmnty. Redev. Agcy., Rfdg. Tax Alloc. Sub. Bayfront, Ser. C | NR | 8.25 | 5/01/24 | 1,500 | 1,603,125 | ||||||||
Davis Pub. Facs. Fin. Auth., Mace Ranch, Ser. A | NR | 6.60 | 9/01/25 | 1,325 | 1,389,342 | ||||||||
El Dorado Cnty., Spec. Tax, Cmnty. Facs., | NR | 6.125 | 9/01/16 | 1,000 | 1,069,810 | ||||||||
Cmnty. Facs., | NR | 6.25 | 9/01/29 | 475 | 497,415 | ||||||||
Emeryville Pub. Fin. Auth. Rev., Emeryville Redev. Proj., Ser. A, M.B.I.A. | Aaa | 5.25 | 9/01/20 | 1,635 | 1,793,889 | ||||||||
Folsom Spec. Tax, | NR | 6.875 | 9/01/19 | 2,000 | 2,150,600 | ||||||||
Cmnty. Facs., Dist. No. 7 | NR | 6.00 | 9/01/24 | 2,500 | 2,596,650 | ||||||||
Foothill/Eastern Trans. Corr. Agcy., Hwy. Toll Rd. Rev., M.B.I.A. | Aaa | 5.375 | 1/15/15 | 1,000 | (f) | 1,100,370 | |||||||
Foothill/Eastern Trans. Corr. Agcy., Toll Rd. Rev., Conv., Sr. Lien, Ser. A, Zero Coupon (until 1/01/05), C.A.B.S. | Aaa | 7.15 | 1/01/10 | 4,750 | (e) | 5,726,173 | |||||||
Conv., Zero Coupon | Baa3 | Zero | 1/15/28 | 4,890 | (f) | 4,013,076 |
See Notes to Financial Statements.
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Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
Gateway Impvt. Auth. Rev., Marin City Cmnty. Facs. Dist., Ser. A | NR | 7.75% | 9/01/05 | $ | 2,070 | (e) | $ | 2,168,987 | |||||
Glendale Redev. Agcy. Tax Alloc. Rev., Central Glendale Redev. Proj., M.B.I.A. | Aaa | 5.25 | 12/01/19 | 3,275 | (e) | 3,569,619 | |||||||
Golden St. Tobacco Securitization Asset-Bkd., Ser. 2003-A-1 | Baa3 | 6.75 | 6/01/39 | 2,950 | 3,088,178 | ||||||||
Asset-Bkd., Ser. B | Baa1 | 5.625 | 6/01/20 | 1,000 | 1,052,150 | ||||||||
Asset-Bkd., Ser. B | Baa1 | 5.50 | 6/01/43 | 3,000 | 3,202,680 | ||||||||
Golden West Sch. Fin. Auth., California Rev., C.A.B.S., Rfdg. Ser. A., M.B.I.A. | Aaa | Zero | 2/01/19 | 2,110 | 1,109,459 | ||||||||
La Quinta California Fin. Auth. Local, Rfdg. Proj., Ser. A, A.M.B.A.C. | Aaa | 5.25 | 9/01/24 | 1,000 | 1,080,800 | ||||||||
La Quinta Redev. Agcy., Tax Alloc., M.B.I.A. | Aaa | 7.30 | 9/01/10 | 1,000 | 1,205,610 | ||||||||
Rfdg. Proj. Area No. 1 | Aaa | 7.30 | 9/01/11 | 1,000 | 1,228,870 | ||||||||
Lincoln Impvt. Bond Act of 1915, Pub. Fin Auth., Twelve Bridges | NR | 6.20 | 9/02/25 | 2,670 | 2,816,476 | ||||||||
Long Beach Hbr. Rev., Rfdg. Ser. A, A.M.T., F.G.I.C. | Aaa | 6.00 | 5/15/19 | 3,000 | 3,506,490 | ||||||||
Los Angeles California Cmnty. Coll. Dist., Ser A, G.O., M.B.I.A. | Aaa | 5.50 | 8/01/17 | 2,630 | 2,937,920 | ||||||||
Los Angeles California Cmnty. Redev. Agcy., Bunker Hill Proj., Ser. A, F.S.A. | Aaa | 5.00 | 12/01/22 | 2,720 | (e) | 2,883,635 | |||||||
Los Angeles Hbr. Dept. Rev., A.M.T., Ser. B | Aa2 | 5.375 | 11/01/23 | 2,000 | 2,078,520 | ||||||||
Los Angeles Uni. Sch. Dist., Ser. F, F.G.I.C., G.O. | Aaa | 5.00 | 7/01/21 | 750 | 797,497 | ||||||||
Lynwood Pub. Fin. Auth. Rev., Wtr. Sys. Impvt. Proj. | BBB+(c) | 6.50 | 6/01/21 | 1,500 | 1,536,645 |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 9 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
Metro. Wtr. Dist. of Southern California, Waterworks Rev., Linked S.A.V.R.S. & R.I.B.S. | Aa2 | 5.75% | 8/10/18 | $ | 1,000 | $ | 1,171,530 | ||||||
MidPeninsula Reg. Open Space Dist., Rfdg. Proj., A.M.B.A.C. | Aaa | 5.00 | 9/01/34 | 1,500 | 1,557,495 | ||||||||
Norco Spec. Tax Cmnty. Facs., Dist. No. 97-1 | NR | 7.10 | 10/01/30 | 1,320 | 1,440,424 | ||||||||
Ontario California Impvt. Bond Act of 1915, Assmt. Dist. 100C, Cmnty. Ctr. III | NR | 8.00 | 9/02/11 | 535 | 561,038 | ||||||||
Orange Cnty. Cmnty. Facs. Dist., Spec. Tax Rev., | NR | 6.00 | 8/15/25 | 1,350 | 1,446,174 | ||||||||
Orange Cnty. Loc. Trans. Auth., Sales Tax Rev., Linked S.A.V.R.S. & R.I.B.S., A.M.B.A.C., T.C.R.S. | Aaa | 6.20 | 2/14/11 | 4,000 | (f) | 4,587,360 | |||||||
Spec. Tax Rev., Linked S.A.V.R.S. & R.I.B.S. | Aa2 | 6.20(d) | 2/14/11 | 750 | 970,260 | ||||||||
Perris Cmnty. Facs. Dist., Spec. Tax No. 01-2, Ser. A | NR | 6.25 | 9/01/23 | 2,000 | 2,057,700 | ||||||||
Pico Rivera California Wtr. Auth. Rev., Wtr. Sys. Proj., Ser. A, M.B.I.A. | Aaa | 5.50 | 5/01/29 | 1,500 | 1,694,925 | ||||||||
Pittsburg California Redev. Agcy. Tax Alloc., | Aaa | 5.80 | 8/01/34 | 2,700 | 3,058,101 | ||||||||
Los Medanos Cmnty. Dev. Proj., A.M.B.A.C. | Aaa | Zero | 8/01/26 | 1,375 | 462,564 | ||||||||
Poway Cmnty., Facs., Dist. No. 88-1, Pkwy. Bus. Ctr. | NR | 6.75 | 8/15/15 | 1,000 | 1,116,600 | ||||||||
Puerto Rico Comnwlth., Rites, PA 642A, G.O., M.B.I.A. (cost $1,062,440; purchased 3/29/00) | NR | 5.75 | 7/01/10 | 1,000 | (g) | 1,260,020 |
See Notes to Financial Statements.
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Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | |||||||
Puerto Rico Comnwlth., Hwy. & Trans. Auth. Rev, Ser. G, F.G.I.C. | Aaa | 5.25% | 7/01/16 | $ | 2,000 | $ | 2,213,080 | |||||
Ser. G, F.G.I.C. | Aaa | 5.25 | 7/01/17 | 1,260 | 1,394,240 | |||||||
Ser. J, F.G.I.C. | Aaa | 5.00 | 7/01/20 | 2,155 | 2,328,478 | |||||||
Puerto Rico Pub. Bldgs. Auth., Gtd. Pub. Ed. & Hlth. Facs., Ser. J, E.T.M., C.A.B.S. | Baa1 | Zero | 7/01/06 | 145 | 140,376 | |||||||
Redding Elec. Sys. Rev., C.O.P., E.T.M., Linked S.A.V.R.S., R.I.B.S., M.B.I.A. | Aaa | 6.368 | 7/01/22 | 50 | 61,682 | |||||||
M.B.I.A., R.I.B.S. | Aaa | 10.525(d) | 7/01/22 | 1,850 | 2,714,505 | |||||||
Rio Vista Impvt. Bond Act of 1915, Assmt. Dist. | NR | 7.50 | 9/02/22 | 1,685 | 1,800,962 | |||||||
Riverside Cnty. Asset Leasing Corp., Leasehold Rev., Hosp. Proj., Ser. B, M.B.I.A. | Aaa | 5.70 | 6/01/16 | 1,500 | 1,715,250 | |||||||
Riverside Uni. Sch. Dist. Spec. Tax, Cmnty. Facs., | ||||||||||||
Dist. No. 7, Ser. A | NR | 6.90 | 9/01/20 | 1,320 | 1,446,443 | |||||||
Dist. No. 7, Ser. A | NR | 7.00 | 9/01/30 | 1,000 | 1,138,000 | |||||||
Rocklin Uni. Sch. Dist., | Aaa | Zero | 8/01/16 | 1,400 | 850,528 | |||||||
Roseville California Spec. Tax, | ||||||||||||
Highland Cmnty. Facs., Dist. No. 1 | NR | 6.30 | 9/01/25 | 1,890 | 2,011,546 | |||||||
Woodcreek Cmnty. Facs., Dist. No. 1 | NR | 6.375 | 9/01/27 | 1,000 | 1,069,730 | |||||||
Sacramento City. Fin. Auth., Ser. B, C.A.B.S., M.B.I.A. | Aaa | Zero | 11/01/17 | 5,695 | 3,223,883 | |||||||
Tax Alloc. Comb. Proj., | ||||||||||||
Ser. B, C.A.B.S., M.B.I.A. | Aaa | Zero | 11/01/16 | 5,700 | 3,413,616 | |||||||
Sacramento Impvt. Bond Act of 1915, Willowcreek II, Assmt. Dist. No. 96-1 | NR | 6.70 | 9/02/22 | 2,420 | 2,513,049 |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 11 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | ||||||||
San Diego California Uni. Sch. Dist. Election 1998, Ser. C, F.S.A., G.O. | Aaa | 5.00% | 7/01/19 | $ | 1,000 | (e) | $ | 1,072,080 | |||||
San Diego Redev. Agcy., Tax Alloc., North Bay Redev. | Baa1 | 5.875 | 9/01/29 | 2,000 | 2,079,440 | ||||||||
San Diego Spec. Tax, Cmnty. Facs. Dist. No. 1, Ser. B | NR | 7.10 | 9/01/20 | 2,000 | (e) | 2,089,300 | |||||||
San Francisco City & Cnty., Redev. Agcy., Lease Rev., C.A.B.S., E.T.M. | A1 | Zero | 7/01/06 | 1,500 | 1,444,500 | ||||||||
C.A.B.S. | A1 | Zero | 7/01/07 | 2,250 | 2,095,560 | ||||||||
San Joaquin Hills Trans. Corridor Agcy., Toll Rd. Rev., Jr. Lien, C.A.B.S., E.T.M. | Aaa | Zero | 1/01/11 | 2,000 | 1,631,180 | ||||||||
San Leandro Cmnty. Facs., Spec. Tax, Dist. No. 1 | NR | 6.50 | 9/01/25 | 2,160 | 2,241,022 | ||||||||
Santa Margarita Wtr. Dist. Spec. Tax, Cmnty. Facs., | |||||||||||||
Dist. No. 99-1 | NR | 6.20 | 9/01/20 | 2,000 | 2,136,520 | ||||||||
Dist. No. 99-1 | NR | 6.25 | 9/01/29 | 2,000 | 2,107,920 | ||||||||
Santa Margarita, Dana Point Auth., Impvt. Dists., | |||||||||||||
1,2,2A,8, Ser. A, M.B.I.A. | Aaa | 7.25 | 8/01/09 | 905 | 1,065,212 | ||||||||
3,3A, 4,4A, Ser. B, M.B.I.A. | Aaa | 7.25 | 8/01/14 | 1,000 | 1,280,090 | ||||||||
Santa Maria Joint Union H.S., Dist., C.A.B.S., Election 2004, G.O., F.G.I.C. | Aaa | Zero | 8/01/27 | 1,505 | 480,140 | ||||||||
South Orange Cnty., Pub. Fin. Auth., Sr. Lien, Ser. A, M.B.I.A. | Aaa | 7.00 | 9/01/10 | 2,535 | 3,016,549 | ||||||||
Southern California Pub. Pwr. Auth., Proj. Rev. | A2 | 6.75 | 7/01/10 | 3,000 | 3,472,680 | ||||||||
Southern California Pub. Pwr. Auth., Proj. Rev., Rfdg., Palo Verde Proj., Ser. C, A.M.B.A.C., E.T.M. | Aaa | Zero | 7/01/16 | 8,400 | 5,184,648 | ||||||||
Sulphur Springs Uni. Sch. Dist., Int. Accrual, Ser. A, M.B.I.A. | Aaa | Zero | 9/01/11 | 3,000 | 2,368,170 |
See Notes to Financial Statements.
12 | Visit our website at www.jennisondryden.com |
Description (a) | Moody’s Rating (Unaudited) | Interest Rate | Maturity Date | Principal Amount (000) | Value (Note 1) | |||||||
Univ. California Research Facs., Rev., Ser. E, A.M.B.A.C. | Aaa | 5.00% | 9/01/18 | $ | 2,000 | $ | 2,157,220 | |||||
Vallejo, Touro Univ., C.O.P. | Ba2 | 7.375 | 6/01/29 | 2,500 | 2,651,025 | |||||||
Valley Hlth. Sys., California Hosp. Rev., Impvt. Proj., Ser. A | B+(c) | 6.50 | 5/15/25 | 1,000 | 1,000,730 | |||||||
Victor Elem. Sch. Dist., G.O., F.G.I.C., | Aaa | 5.375 | 8/01/20 | 1,455 | 1,605,956 | |||||||
Ser. A | Aaa | 5.375 | 8/01/21 | 1,635 | 1,804,631 | |||||||
West Contra Costa Uni. Sch. Dist., C.O.P. | Baa3 | 6.875 | 1/01/09 | 550 | 562,661 | |||||||
Total long-term investments | 190,662,469 | |||||||||||
SHORT-TERM INVESTMENTS 1.5% | ||||||||||||
California Hsg. Fin. Agcy. Rev., Home Mtge., Ser. J, A.M.T., F.S.A., F.R.D.D. | VMIG1 | 1.90 | 3/10/05 | 200 | 200,000 | |||||||
Home Mtge., Ser. M, A.M.T., F.R.D.D. | VMIG1 | 1.84 | 3/07/05 | 800 | 800,000 | |||||||
Home Mtge., Ser. R, A.M.T., A.M.B.A.C., F.R.D.D. | VMIG1 | 1.84 | 3/07/05 | 1,850 | 1,850,000 | |||||||
Total short-term investments | 2,850,000 | |||||||||||
Total Investments 98.9% | 193,512,469 | |||||||||||
Variation margin on open futures contracts, net(h) | 80,000 | |||||||||||
Other assets in excess of liabilities 1.1% | 2,062,486 | |||||||||||
Net Assets 100% | $ | 195,654,955 | ||||||||||
(a) | The following abbreviations are used in the portfolio descriptions: |
A.M.B.A.C.—American Municipal Bond Assurance Corporation.
A.M.T.—Alternative Minimum Tax.
C.A.B.S.—Capital Appreciation Bonds.
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 13 |
Portfolio of Investments
as of February 28, 2005 (Unaudited) Cont’d.
C.O.P.—Certificates of Participation.
E.T.M.—Escrowed To Maturity.
F.G.I.C.—Financial Guaranty Insurance Company.
F.N.M.A.—Federal National Mortgage Association.
F.R.D.D.—Floating Rate (Daily) Demand Note(b).
F.S.A.—Financial Security Assurance.
G.N.M.A.—Government National Mortgage Association.
G.O.—General Obligation.
M.B.I.A.—Municipal Bond Insurance Corporation.
R.I.B.S.—Residual Interest Bearing Securities.
S.A.V.R.S.—Select Auction Variable Rate Securities.
T.C.R.S.—Transferable Custodial Receipts.
NR—Not Rated by Moody’s or Standard & Poor’s.
The fund’s current Statement of Additional Information contains a description of Moody’s and Standard & Poor’s ratings.
(b) | For purposes of amortized cost valuation, the maturity date of Floating Rate Demand Notes is considered to be the later of the next date on which the security can be redeemed at par, or the next date on which the rate of interest is adjusted. |
(c) | Standard & Poor’s Rating. |
(d) | Inverse floating rate bond. The coupon is inversely indexed to a floating interest rate. The rate shown is the rate at period end. |
(e) | Prerefunded issues are secured by escrowed cash and/or direct U.S. guaranteed obligations. |
(f) | Security segregated as collateral for futures contracts. |
(g) | Indicates a security that has been deemed illiquid. The aggregate cost of the illiquid security was $1,062,440. The aggregate value, $1,260,020 represents approximately .64% of net assets. |
(h) | Open futures contracts as of February 28, 2005 were as follows: |
Number of | Type | Expiration Date | Value at Trade Date | Value at February 28, 2005 | Unrealized Appreciation/ (Depreciation) | |||||||||
Long Positions: | ||||||||||||||
6 | U.S. Treasury 5 Yr. Notes | Mar. 05 | $ | 657,241 | $ | 648,750 | $ | (8,491 | ) | |||||
Short Positions: | ||||||||||||||
112 | U.S. Treasury 10 Yr. Notes | Mar. 05 | $ | 12,493,494 | $ | 12,418,000 | $ | 75,494 | ||||||
26 | U.S. Treasury Bonds | Mar. 05 | $ | 2,986,063 | $ | 2,940,438 | 45,625 | |||||||
$ | 112,628 | |||||||||||||
See Notes to Financial Statements.
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The industry classification of portfolio holdings and other assets in excess of liabilities shown as a percentage of net assets as of February 28, 2005 were as follows:
Special Tax/Assessment District | 40.4 | % | |
General Obligation | 12.6 | ||
Transportation | 12.3 | ||
Power | 7.7 | ||
Education | 6.2 | ||
Lease-Backed Certificate of Participation | 6.2 | ||
Healthcare | 4.9 | ||
Tobacco | 3.8 | ||
Water & Sewer | 2.3 | ||
Housing | 1.7 | ||
Other | 0.8 | ||
Total Investments | 98.9 | ||
Other assets in excess of liabilities | 1.1 | ||
Net Assets | 100.0 | % | |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 15 |
Statement of Assets and Liabilities
as of February 28, 2005 (Unaudited)
Assets | |||
Investments, at value (cost $176,591,886) | $ | 193,512,469 | |
Cash | 102,368 | ||
Interest receivable | 2,719,167 | ||
Receivable for Series shares sold | 25,201 | ||
Prepaid expenses | 5,240 | ||
Due from broker-variation margin | 80,000 | ||
Total assets | 196,444,445 | ||
Liabilities | |||
Payable for Series shares reacquired | 503,156 | ||
Accrued expenses | 120,872 | ||
Management fee payable | 75,820 | ||
Distribution fee payable | 48,569 | ||
Dividends payable | 24,189 | ||
Deferred trustees’ fees | 16,884 | ||
Total liabilities | 789,490 | ||
Net Assets | $ | 195,654,955 | |
Net assets were comprised of: | |||
Shares of beneficial interest, at par | $ | 177,598 | |
Paid-in capital in excess of par | 178,314,528 | ||
178,492,126 | |||
Undistributed net investment income | 119,082 | ||
Accumulated net realized gain on investments | 10,536 | ||
Net unrealized appreciation on investments | 17,033,211 | ||
Net assets, February 28, 2005 | $ | 195,654,955 | |
See Notes to Financial Statements.
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Class A | |||
Net asset value and redemption price per share | $ | 11.02 | |
Maximum sales charge (4.00% of offering price) | 0.46 | ||
Maximum offering price to public | $ | 11.48 | |
Class B | |||
Net asset value and redemption price per share | $ | 11.02 | |
Class C | |||
Net asset value and redemption price per share | $ | 11.02 | |
Class Z | |||
Net asset value and redemption price per share | $ | 11.02 | |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 17 |
Statement of Operations
Six Months Ended February 28, 2005 (Unaudited)
Net Investment Income | ||||
Income | ||||
Interest | $ | 5,030,872 | ||
Expenses | ||||
Management fee | 497,853 | |||
Distribution fee—Class A | 176,355 | |||
Distribution fee—Class B | 109,632 | |||
Distribution fee—Class C | 32,841 | |||
Custodian’s fees and expenses | 58,000 | |||
Reports to shareholders | 30,000 | |||
Transfer agent’s fees and expenses | 26,000 | |||
Registration fees | 25,000 | |||
Legal fees and expenses | 14,000 | |||
Audit fee | 11,000 | |||
Trustees’ fees | 7,000 | |||
Miscellaneous | 8,614 | |||
Total expenses | 996,295 | |||
Net investment income | 4,034,577 | |||
Realized And Unrealized Gain (Loss) On Investments | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 370,854 | |||
Financial futures transactions | (107,761 | ) | ||
263,093 | ||||
Net change in unrealized appreciation on: | ||||
Investments | 702,088 | |||
Financial futures contracts | 264,008 | |||
966,096 | ||||
Net gain on investments | 1,229,189 | |||
Net Increase In Net Assets Resulting From Operations | $ | 5,263,766 | ||
See Notes to Financial Statements.
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Statement of Changes in Net Assets
(Unaudited)
Six Months Ended February 28, 2005 | Year Ended August 31, 2004 | |||||||
Increase (Decrease) In Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ | 4,034,577 | $ | 8,962,314 | ||||
Net realized gain on investments | 263,093 | 1,684,672 | ||||||
Net change in unrealized appreciation on investments | 966,096 | 3,026,327 | ||||||
Net increase in net assets resulting from operations | 5,263,766 | 13,673,313 | ||||||
Dividends and distributions (Note 1): | ||||||||
Dividends from net investment income | ||||||||
Class A | (2,900,445 | ) | (6,255,435 | ) | ||||
Class B | (845,645 | ) | (2,055,475 | ) | ||||
Class C | (158,452 | ) | (331,169 | ) | ||||
Class Z | (118,479 | ) | (303,093 | ) | ||||
(4,023,021 | ) | (8,945,172 | ) | |||||
Distributions from net realized gains | ||||||||
Class A | — | (2,247,359 | ) | |||||
Class B | — | (803,256 | ) | |||||
Class C | — | (134,430 | ) | |||||
Class Z | — | (82,703 | ) | |||||
— | (3,267,748 | ) | ||||||
Series share transactions (net of share conversions) (Note 6): | ||||||||
Net proceeds from shares sold | 3,823,921 | 19,861,648 | ||||||
Net asset value of shares issued in reinvestment of dividends and distributions | 2,016,971 | 5,976,996 | ||||||
Cost of shares reacquired | (16,672,894 | ) | (53,331,286 | ) | ||||
Net decrease in net assets from Series share transactions | (10,832,002 | ) | (27,492,642 | ) | ||||
Total decrease | (9,591,257 | ) | (26,032,249 | ) | ||||
Net Assets | ||||||||
Beginning of period | 205,246,212 | 231,278,461 | ||||||
End of period(a) | $ | 195,654,955 | $ | 205,246,212 | ||||
(a) Includes undistributed net investment income of: | $ | 119,082 | $ | 107,526 | ||||
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 19 |
Notes to Financial Statements
(Unaudited)
Dryden California Municipal Fund (the “Fund”), is registered under the Investment Company Act of 1940, as an open-end management investment company. The Fund was organized as a Massachusetts business trust on May 18, 1984 and consists of two series. These financial statements relate to California Income Series. The financial statements of the other series are not presented herein. The assets of each series are invested in separate, independently managed portfolios. The Series commenced investment operations on December 3, 1990. The Series is diversified and seeks to achieve its investment objective of obtaining the maximum amount of income exempt from federal and California state income taxes with the minimum of risk. The Series will invest primarily in investment grade municipal obligations but may also invest a portion of its assets in lower-quality municipal obligations or in nonrated securities which are of comparable quality. The ability of the issuers of the securities held by the Series to meet their obligations may be affected by economic developments in a specific state, industry or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund and the Series in preparation of its financial statements.
Securities Valuations: The Series values municipal securities (including commitments to purchase such securities on a “when-issued” basis) as of the close of trading on the New York Stock Exchange, on the basis of prices provided by a pricing service which uses information with respect to transactions in comparable securities and various relationships between securities in determining values. Securities listed on a securities exchange (other than options on securities and indices) 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 that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed by Prudential Investments LLC (“PI” or “Manager”) in consultation with the subadvisor, to be over-the-counter, are valued at market value using prices provided, by an independent pricing agent or principal market maker. Options on securities and indices traded on an exchange are valued at their last sales price as of the close of trading on an applicable exchange, or if there was no sale, at the mean between the most recently quoted bid and asked prices on such exchanges.
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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 prices on such exchange or board of trade or at the last bid price in the absence of an asked price. Certain fixed income securities for which daily market quotations are not readily available may be valued with reference to fixed income securities whose prices are more readily available, pursuant to guidelines established by Board of Trustees. Prices may be obtained from independent pricing services which use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Securities for which reliable market quotations are not readily available, or for which the pricing service does not provide a valuation methodology, or does not present fair value, are valued at fair value in accordance with Board of Trustees’ approved fair valuation procedures. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.
Short-term securities, which mature in sixty days or less are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term securities which mature in more than sixty days are valued at current market quotations.
Restricted Securities: The Series may hold up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). The restricted securities held by the Series at August 31, 2004 include registration rights under which the Series may demand registration by the issuers. Restricted securities, sometimes referred to as private placements, are valued pursuant to the valuation procedures noted above.
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 Series 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 Series 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
Dryden California Municipal Fund/California Income Series | 21 |
Notes to Financial Statements
(Unaudited) Cont’d
loss is realized and is presented in the Statement of Operations as net realized gain or loss on financial futures transactions.
The Series invests in financial futures contracts in order to hedge its existing portfolio securities or securities the Series intends to purchase, against fluctuations in value caused by changes in prevailing interest rates. Should interest rates move unexpectedly, the Series 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.
Interest Rate Swaps: The Series may enter into interest rate swaps. In a simple interest rate swap, one investor pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps were conceived as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time.
During the term of the swap, changes in the value of the swap are recorded as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, the Series will record a realized gain (loss) equal to the difference between the proceeds from (or cost of) the closing transaction and the Series’ basis in the contract, if any.
The Series is exposed to credit loss in the event of non-performance by the other party to the interest rate swap. However, the Series does not anticipate non-performance by any counterparty.
Financial future contracts, written options and swap contracts involve elements of both market and credit risk in excess of the amounts reflected in the Statement of Assets and Liabilities.
Inverse Floaters: The Series invests in variable rate securities commonly called “inverse floaters”. The interest rates on these securities have an inverse relationship to the interest rate of other securities or the value of an index. Changes in interest rates on the other security or index inversely affect the rate paid on the inverse floater, and
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the inverse floater’s price will be more volatile than that of a fixed-rate bond. Additionally, some of these securities contain a “leverage factor” whereby the interest rate moves inversely by a “factor” to the benchmark rate. Certain interest rate movements and other market factors can substantially affect the liquidity of inverse floating rate notes.
When-Issued/Delayed Delivery Securities: Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Series enters into such transactions, it instructs the custodian to segregate assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments.
Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Interest income, including amortization of premium and accretion of discount on debt securities, as required is recorded on the accrual basis.
Net investment income or loss (other than distribution fees which are charged directly to the respective class) and unrealized and realized gains (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.
Dividends and Distributions: The Series declares daily dividends from net investment income and paid monthly. Distributions of net capital gains, if any, are made at least annually.
Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulation and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst net investment income, accumulated net realized gain or loss and paid-in-capital in excess of par, as appropriate.
Taxes: For federal income tax purposes, each series in the Fund is treated as a separate taxpaying entity. It is the Series’ policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net income and capital gains, if any, to shareholders. Therefore, no federal income tax provision is required.
Dryden California Municipal Fund/California Income Series | 23 |
Notes to Financial Statements
(Unaudited) Cont’d
Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments LLC (“PI”). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with The Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM furnishes investment advisory services in connection with the management of the Series. In connection therewith, PIM is obligated to keep certain books and records of the Series. PI pays for the services of PIM, the cost of compensation of officers of the Series, occupancy and certain clerical and bookkeeping costs of the Series. The Series bears all other costs and expenses.
The management fee paid to PI is accrued daily and payable monthly, at an annual rate of .50 of 1% of the Series’ average daily net assets up to and including $1 billion and .45% of the Series average daily net assets in excess of $1 billion. The effective management fee rate was .50 of 1% for the six months ended February 28, 2005.
The Series 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 of the Series. The Series compensates PIMS for distributing and servicing the Series’ 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 for Class A, Class B and Class C shares are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Z shares of the Series.
Pursuant to the Class A, Class B and Class C Plans, the Series compensates PIMS for distribution-related activities at an annual rate of up to .30 of 1%, .50 of 1% and 1% of the average daily net assets of the Class A, B and C shares, respectively. PIMS has contractually agreed to limit such fees to .25 of 1% and .75 of 1% of the Class A and Class C shares, respectively for the six months ended February 28, 2005.
PIMS has advised the Series that it received approximately $28,700 in front-end sales charges resulting from sales of Class A shares, during the six months ended
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February 28, 2005. From these fees, PIMS paid a substantial part of such sales charges to affiliated broker-dealers which in turn paid commissions to sales persons and incurred other distribution costs. Effective February 2, 2004, Class C shares purchased on or after February 2, 2004 will not be subject to an initial sales charge.
PIMS has advised the Series that for the six months ended February 28, 2005, it received approximately $27,000 and $300 in contingent deferred sales charges imposed upon certain redemptions by Class B and Class C shareholders, respectively.
PI, PIMS and PIM are indirect wholly owned subsidiaries of Prudential Financial, Inc. (“Prudential”).
The Series along with other affiliated registered investment companies (the “Funds”), is a party to a syndicated credit agreement (“SCA”) with a group of banks. Beginning May 1, 2004, the SCA provided for a commitment of $500 million. Interest on any borrowings under the SCA would be incurred at market rates. The Funds paid a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment fee is accrued daily 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 funding for capital share redemptions. The expiration date of the SCA was October 29, 2004. Effective October 29, 2004, the Funds entered into a revised credit agreement with two banks. The commitment under the revised credit agreement continues to be $500 million. The Funds pay a commitment fee of .075 of 1% of the unused portion of the revised credit agreement. The expiration date of the revised credit agreement is October 28, 2005. The Fund did not borrow any amounts pursuant to the SCA during the year ended February 28, 2005.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect wholly owned subsidiary of Prudential, serves as the Fund’s transfer agent. During the six months ended February 28, 2005, the Series incurred fees of approximately $17,500 for the services of PMFS. As of February 28, 2005 approximately $2,900 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 Series incurred approximately $4,100 in total networking fees, of which the amount relating to the services of Wachovia Securities, LLC (“Wachovia”), and First Clearing Corporation (“First
Dryden California Municipal Fund/California Income Series | 25 |
Notes to Financial Statements
(Unaudited) Cont’d
Clearing”), affiliates of PI, were approximately $60 and $3,600 for the six months ended February 28, 2005. As of February 28, 2005 approximately $925 of such fees were due to First Clearing. These amounts are included in transfer agent’s fees and expenses in the Statement of Operations.
For the six months ended February 28, 2005, the Series did not pay any brokerage commissions to Wachovia.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term investments, for the six months ended February 28, 2005 were $11,001,409 and $23,440,779 respectively.
Note 5. Tax Information
The United States federal income tax basis of the Series’ investments and the net unrealized appreciation as of February 28, 2005 were as follows:
Tax Basis | Appreciation | Depreciation | Net Unrealized | |||
$176,409,665 | $17,184,765 | $81,961 | $17,102,804 |
The difference between book basis and tax basis was primarily attributable to the difference in the treatment of accreting market discount and premium amortization for book and tax purposes.
Note 6. Capital
The Series 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 4%. All investors who purchase Class A shares in an amount of $1 million or more and sell these shares within 12 months of purchase are subject to a contingent deferred sales charge (CDSC) of 1%, including investors who purchase their shares through broker-dealers affiliated with Prudential Financial, Inc. Class B shares are sold with a CDSC which declines from 5% to zero depending on the period of time the shares are held. Class C shares sold within 12 months of purchase are subject to a CDSC of 1%. Class B shares automatically convert to Class A
26 | Visit our website at www.jennisondryden.com |
shares on a quarterly basis approximately seven years after purchase. A special exchange privilege is also available for shareholders who qualify 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.
The Fund has authorized an unlimited number of shares of beneficial interest for each class at $.01 par value per share.
Transactions in shares of beneficial interest for the fiscal six months ended February 28, 2005 and the fiscal year ended August 31, 2004 were as follows:
Class A | Shares | Amount | |||||
Six months ended February 28, 2005: | |||||||
Shares sold | 176,472 | $ | 1,946,197 | ||||
Shares issued in reinvestment of distributions | 123,587 | 1,362,671 | |||||
Shares reacquired | (998,579 | ) | (10,985,280 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (698,520 | ) | (7,676,412 | ) | |||
Shares issued upon conversion from Class B | 318,619 | 3,497,747 | |||||
Net increase (decrease) in shares outstanding | (379,901 | ) | $ | (4,178,665 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 1,033,659 | $ | 11,317,710 | ||||
Shares issued in reinvestment of distributions | 359,165 | 3,933,590 | |||||
Shares reacquired | (3,259,257 | ) | (35,491,035 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (1,866,433 | ) | (20,239,735 | ) | |||
Shares issued upon conversion from Class B | 381,688 | 4,189,697 | |||||
Net increase (decrease) in shares outstanding | (1,484,745 | ) | $ | (16,050,038 | ) | ||
Class B | |||||||
Six months ended February 28, 2005: | |||||||
Shares sold | 53,071 | $ | 584,251 | ||||
Shares issued in reinvestment of distributions | 38,818 | 428,056 | |||||
Shares reacquired | (308,794 | ) | (3,397,862 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (216,905 | ) | (2,385,555 | ) | |||
Shares issued upon conversion from Class A | (318,619 | ) | (3,497,747 | ) | |||
Net increase (decrease) in shares outstanding | (535,524 | ) | $ | (5,883,302 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 208,004 | $ | 2,280,202 | ||||
Shares issued in reinvestment of distributions | 136,568 | 1,496,437 | |||||
Shares reacquired | (890,197 | ) | (9,654,298 | ) | |||
Net increase (decrease) in shares outstanding before conversion | (545,625 | ) | (5,877,659 | ) | |||
Shares issued upon conversion from Class A | (381,688 | ) | (4,189,697 | ) | |||
Net increase (decrease) in shares outstanding | (927,313 | ) | $ | (10,067,356 | ) | ||
Dryden California Municipal Fund/California Income Series | 27 |
Notes to Financial Statements
(Unaudited) Cont’d
Class C | Shares | Amount | |||||
Six months ended February 28, 2005: | |||||||
Shares sold | 55,618 | $ | 613,552 | ||||
Shares issued in reinvestment of distributions | 9,867 | 108,804 | |||||
Shares reacquired | (74,965 | ) | (824,521 | ) | |||
Net increase (decrease) in shares outstanding | (9,480 | ) | $ | (102,165 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 102,573 | $ | 1,125,181 | ||||
Shares issued in reinvestment of distributions | 31,493 | 344,969 | |||||
Shares reacquired | (172,419 | ) | (1,882,193 | ) | |||
Net increase (decrease) in shares outstanding | (38,353 | ) | $ | (412,043 | ) | ||
Class Z | |||||||
Six months ended February 28, 2005: | |||||||
Shares sold | 61,649 | $ | 679,921 | ||||
Shares issued in reinvestment of distributions | 10,648 | 117,440 | |||||
Shares reacquired | (133,090 | ) | (1,465,231 | ) | |||
Net increase (decrease) in shares outstanding | (60,793 | ) | $ | (667,870 | ) | ||
Year ended August 31, 2004: | |||||||
Shares sold | 468,660 | $ | 5,138,555 | ||||
Shares issued in reinvestment of distributions | 18,467 | 202,000 | |||||
Shares reacquired | (582,222 | ) | (6,303,760 | ) | |||
Net increase (decrease) in shares outstanding | (95,095 | ) | $ | (963,205 | ) | ||
See Notes to Financial Statements.
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Financial Highlights
FEBRUARY 28, 2005 | SEMIANNUAL REPORT |
Dryden California Municipal Fund/California Income Series
Financial Highlights
(Unaudited)
Class A | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning of Period | $ | 10.95 | ||
Income from investment operations | ||||
Net investment income | 0.23 | |||
Net realized and unrealized gain (loss) on investment transactions | 0.07 | |||
Total from investment operations | .30 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.23 | ) | ||
Distributions from net realized gains | — | |||
Distributions in excess of net investment income | — | |||
Total dividends and distributions | (.23 | ) | ||
Net asset value, end of period | $ | 11.02 | ||
Total Return(a): | 2.76 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 139,816 | ||
Average net assets (000) | $ | 142,253 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees(d) | .93 | %(e) | ||
Expenses, excluding distribution and service (12b-1) fees | .68 | %(e) | ||
Net investment income | 4.12 | %(e) | ||
For Class A, B, C and Z shares: | ||||
Portfolio turnover rate | 6 | % |
(a) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for period of less than one full year are not annualized. |
(b) | Less than $.005 per share. |
(c) | Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share or on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | The distributor of the Series has contractually agreed to limited its distributions and service (12b-1) fees to .25 of 1% of the daily net assets of Class A shares. |
(e) | Annualized. |
See Notes to Financial Statements.
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Class A | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.66 | $ | 10.49 | |||||||||
.45 | .47 | .49 | .52 | .54 | ||||||||||||||
.25 | �� | (.23 | ) | (.01 | ) | .45 | .17 | |||||||||||
.70 | .24 | .48 | .97 | .71 | ||||||||||||||
(.45 | ) | (.47 | ) | (.50 | ) | (.52 | ) | (.54 | ) | |||||||||
(.16 | ) | — | — | — | — | |||||||||||||
— | — | — | — | (b) | — | (b) | ||||||||||||
(.61 | ) | (.47 | ) | (.50 | ) | (.52 | ) | (.54 | ) | |||||||||
$ | 10.95 | $ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.66 | |||||||||
6.55 | % | 2.20 | % | 4.54 | % | 9.35 | % | 7.10 | % | |||||||||
$ | 143,120 | $ | 158,120 | $ | 172,623 | $ | 167,009 | $ | 167,153 | |||||||||
$ | 151,980 | $ | 171,193 | $ | 169,196 | $ | 164,424 | $ | 171,688 | |||||||||
.92 | % | .90 | % | .87 | % | .87 | % | .86 | % | |||||||||
.67 | % | .65 | % | .62 | % | .62 | % | .61 | % | |||||||||
4.12 | % | 4.32 | % | 4.55 | % | 4.83 | % | 5.21 | % | |||||||||
38 | % | 59 | % | 23 | % | 32 | % | 34 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 31 |
Financial Highlights
(Unaudited) Cont’d
Class B | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning of Period | $ | 10.95 | ||
Income from investment operations | ||||
Net investment income | .22 | |||
Net realized and unrealized gain (loss) on investment transactions | .07 | |||
Total from investment operations | .29 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.22 | ) | ||
Distributions from net realized gains | — | |||
Distributions in excess of net investment income | — | |||
Total dividends and distributions | (.22 | ) | ||
Net asset value, end of period | $ | 11.02 | ||
Total Return(a): | 2.63 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 41,933 | ||
Average net assets (000) | $ | 44,216 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | 1.18 | %(d) | ||
Expenses, excluding distribution and service (12b-1) fees | .68 | %(d) | ||
Net investment income | 3.87 | %(d) |
(a) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for period of less than one full year are not annualized. |
(b) | Less than $.005 per share. |
(c) | Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share. The effect of this change on the ratio of net investment income was an increase from 4.30% to 4.31%. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | Annualized. |
See Notes to Financial Statements.
32 | Visit our website at www.jennisondryden.com |
Class B | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.67 | $ | 10.49 | |||||||||
.42 | .45 | .47 | .49 | .51 | ||||||||||||||
.25 | (.23 | ) | (.01 | ) | .44 | .18 | ||||||||||||
.67 | .22 | .46 | .93 | .69 | ||||||||||||||
(.42 | ) | (.45 | ) | (.48 | ) | (.49 | ) | (.51 | ) | |||||||||
(.16 | ) | — | — | — | — | |||||||||||||
— | — | — | — | (b) | — | (b) | ||||||||||||
(.58 | ) | (.45 | ) | (.48 | ) | (.49 | ) | (.51 | ) | |||||||||
$ | 10.95 | $ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.67 | |||||||||
6.29 | % | 1.94 | % | 4.29 | % | 8.98 | % | 6.93 | % | |||||||||
$ | 47,536 | $ | 57,234 | $ | 70,308 | $ | 78,237 | $ | 80,580 | |||||||||
$ | 53,143 | $ | 65,204 | $ | 72,864 | $ | 79,046 | $ | 78,743 | |||||||||
1.17 | % | 1.15 | % | 1.12 | % | 1.12 | % | 1.11 | % | |||||||||
.67 | % | .65 | % | .62 | % | .62 | % | .61 | % | |||||||||
3.87 | % | 4.07 | % | 4.31 | % | 4.58 | % | 4.96 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 33 |
Financial Highlights
(Unaudited) Cont’d
Class C | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning of Period | $ | 10.95 | ||
Income from investment operations | ||||
Net investment income | .20 | |||
Net realized and unrealized gain (loss) on investment transactions | .07 | |||
Total from investment operations | .27 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.20 | ) | ||
Distributions from net realized gains | — | |||
Distributions in excess of net investment income | — | |||
Total dividends and distributions | (.20 | ) | ||
Net asset value, end of period | $ | 11.02 | ||
Total Return(a): | 2.50 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 8,938 | ||
Average net assets (000) | $ | 8,830 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees(d) | 1.43 | %(e) | ||
Expenses, excluding distribution and service (12b-1) fees | .68 | %(e) | ||
Net investment income | 3.63 | %(e) |
(a) | Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for period of less than one full year are not annualized. |
(b) | Less than $.005 per share. |
(c) | Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net realized and unrealized gain/(loss) per share. The effect of this change on the ratio of net investment income was an increase from 4.06% to 4.07%. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | The distributor of the Series has contractually agreed to limited its distributions and service (12b-1) fees to .75 of 1% of the daily net assets of Class C shares. |
(e) | Annualized. |
See Notes to Financial Statements.
34 | Visit our website at www.jennisondryden.com |
Class C | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.67 | $ | 10.49 | |||||||||
.40 | .42 | .44 | .47 | .49 | ||||||||||||||
.25 | (.23 | ) | (.01 | ) | .44 | .18 | ||||||||||||
.65 | .19 | .43 | .91 | .67 | ||||||||||||||
(.40 | ) | (.42 | ) | (.45 | ) | (.47 | ) | (.49 | ) | |||||||||
(.16 | ) | — | — | — | — | |||||||||||||
— | — | — | — | (b) | — | (b) | ||||||||||||
(.56 | ) | (.42 | ) | (.45 | ) | (.47 | ) | (.49 | ) | |||||||||
$ | 10.95 | $ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.67 | |||||||||
6.03 | % | 1.69 | % | 4.02 | % | 8.71 | % | 6.66 | % | |||||||||
$ | 8,986 | $ | 9,332 | $ | 10,071 | $ | 9,394 | $ | 8,309 | |||||||||
$ | 9,164 | $ | 9,804 | $ | 9,188 | $ | 8,346 | $ | 9,021 | |||||||||
1.42 | % | 1.40 | % | 1.37 | % | 1.37 | % | 1.36 | % | |||||||||
.67 | % | .65 | % | .62 | % | .62 | % | .61 | % | |||||||||
3.62 | % | 3.82 | % | 4.07 | % | 4.33 | % | 4.71 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 35 |
Financial Highlights
(Unaudited) Cont’d
Class Z | ||||
Six Months Ended February 28, 2005 | ||||
Per Share Operating Performance: | ||||
Net Asset Value, Beginning of Period | $ | 10.95 | ||
Income from investment operations | ||||
Net investment income | .24 | |||
Net realized and unrealized gain (loss) on investment transactions | .07 | |||
Total from investment operations | .31 | |||
Less Dividends and Distributions | ||||
Dividends from net investment income | (.24 | ) | ||
Distributions from net realized gains | — | |||
Distributions in excess of net investment income | — | |||
Total dividends and distributions | (.24 | ) | ||
Net asset value, end of period | $ | 11.02 | ||
Total Return(a): | 2.89 | % | ||
Ratios/Supplemental Data: | ||||
Net assets, end of period (000) | $ | 4,969 | ||
Average net assets (000) | $ | 5,492 | ||
Ratios to average net assets: | ||||
Expenses, including distribution and service (12b-1) fees | .68 | %(d) | ||
Expenses, excluding distribution and service (12b-1) fees | .68 | %(d) | ||
Net investment income | 4.36 | %(d) |
(a) | Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each purchase of shares on the first day and a sale on the last day of each period reported and includes reinvestment of dividends and distributions. Total returns for period of less than one full year are not annualized. |
(b) | Less than $.005 per share. |
(c) | Effective September 1, 2001 the Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. There was no effect of this change for the year ended August 31, 2002 on net investment income per share, net reazlized and unrealized gain/(loss) per share or on the ratio of net investment income. Per share amounts and ratios for the years ended prior to August 31, 2002 have not been restated to reflect this change in presentation. |
(d) | Annualized. |
See Notes to Financial Statements.
36 | Visit our website at www.jennisondryden.com |
Class Z | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2004 | 2003 | 2002(c) | 2001 | 2000 | ||||||||||||||
$ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.65 | $ | 10.49 | |||||||||
.48 | .50 | .52 | .55 | .56 | ||||||||||||||
.25 | (.23 | ) | (.01 | ) | .46 | .16 | ||||||||||||
.73 | .27 | .51 | 1.01 | .72 | ||||||||||||||
(.48 | ) | (.50 | ) | (.53 | ) | (.55 | ) | (.56 | ) | |||||||||
(.16 | ) | — | — | — | — | |||||||||||||
— | — | — | — | (b) | — | (b) | ||||||||||||
(.64 | ) | (.50 | ) | (.53 | ) | (.55 | ) | (.56 | ) | |||||||||
$ | 10.95 | $ | 10.86 | $ | 11.09 | $ | 11.11 | $ | 10.65 | |||||||||
6.82 | % | 2.45 | % | 4.80 | % | 9.72 | % | 7.26 | % | |||||||||
$ | 5,604 | $ | 6,592 | $ | 6,148 | $ | 4,052 | $ | 4,336 | |||||||||
$ | 6,958 | $ | 6,118 | $ | 4,712 | $ | 4,292 | $ | 4,281 | |||||||||
.67 | % | .65 | % | .62 | % | .62 | % | .61 | % | |||||||||
.67 | % | .65 | % | .62 | % | .62 | % | .61 | % | |||||||||
4.36 | % | 4.58 | % | 4.78 | % | 5.09 | % | 5.45 | % |
See Notes to Financial Statements.
Dryden California Municipal Fund/California Income Series | 37 |
n MAIL | n TELEPHONE | n WEBSITE | ||
Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | (800) 225-1852 | www.jennisondryden.com |
PROXY VOTING |
The Board of Trustees of the Fund has delegated to the Series’ investment adviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Series. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s (the Commission) website at http://www.sec.gov. Information regarding how the Series voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2004, is available on the Series’ website at http://www.prudential.com and on the Commission’s website at http://www.sec.gov. |
TRUSTEES |
David E.A. Carson • Robert F. Gunia • Robert E. La Blanc • Douglas H. McCorkindale • Richard A. Redeker • Judy A. Rice • Robin B. Smith • Stephen G. Stoneburn • Clay T. Whitehead |
OFFICERS |
Judy A. Rice, President • Robert F. Gunia, Vice President • Grace C. Torres, Treasurer and Principal Financial and Accounting Officer • William V. Healey, Chief Legal Officer • Deborah A. Docs, Secretary • Jonathan D. Shain, Assistant Secretary • Maryanne Ryan, Anti-Money Laundering Officer • Helene Gurian, Acting Anti-Money Laundering Compliance Officer • Lee D. Augsburger, Chief Compliance Officer |
MANAGER | Prudential Investments LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
INVESTMENT ADVISER | Prudential Investment Management, Inc. | Gateway Center Two 100 Mulberry Street Newark, NJ 07102 | ||
DISTRIBUTOR | Prudential Investment Management Services LLC | Gateway Center Three 100 Mulberry Street Newark, NJ 07102 | ||
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 19176 | ||
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | KPMG LLP | 757 Third Avenue New York, NY 10017 | ||
FUND COUNSEL | Shearman & Sterling LLP | 599 Lexington Avenue New York, NY 10022 |
Dryden California Municipal Fund/California Income Series | ||||||||||||
Share Class | A | B | C | Z | ||||||||
NASDAQ | PBCAX | PCAIX | PCICX | PCIZX | ||||||||
CUSIP | 262433105 | 262433204 | 262433303 | 262433402 | ||||||||
An investor should consider the investment objectives, risks, and charges and expenses of the Series carefully before investing. The prospectus for the Series contains this and other information about the Series. An investor may obtain a prospectus by visiting our website at www.jennisondryden.com or by calling (800) 225-1852. The prospectus should be read carefully before investing. |
Prudential Fixed Income is a business unit of Prudential Investment Management, Inc. (PIM). Quantitative Management Associates LLC, Jennison Associates LLC, and PIM are registered investment advisers and Prudential Financial companies. |
The views expressed in this report and information about the Series’ portfolio holdings are for the period covered by this report and are subject to change thereafter. The accompanying financial statements as of February 28, 2005, were not audited, and accordingly, no auditor’s opinion is expressed on them. |
E-DELIVERY |
To receive your mutual fund documents on-line, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address. |
SHAREHOLDER COMMUNICATIONS WITH TRUSTEES |
Shareholders of the Series can communicate directly with the Board of Trustees by writing to the Chair of the Board, Dryden California Municipal Fund/California Income Series, PO Box 13964, Philadelphia, PA 19176. Shareholders can communicate directly with an individual Trustee by writing to that Trustee at Dryden California Municipal Fund/California Income Series, PO Box 13964, Philadelphia, PA 19176. Such communications to the Board or individual Trustees are not screened before being delivered to the addressee. |
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE |
The Series files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The Series’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Series’ Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330 (732-0330). The Series will provide a full list of its portfolio holdings as of the end of each fiscal quarter on its website at www.jennisondryden.com approximately 60 days after the end of the fiscal quarter. |
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE | ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE |
Dryden California Municipal Fund/California Income Series | ||||||||||||
Share Class | A | B | C | Z | ||||||||
NASDAQ | PBCAX | PCAIX | PCICX | PCIZX | ||||||||
CUSIP | 262433105 | 262433204 | 262433303 | 262433402 | ||||||||
MF146E2 IFS-A103203 Ed. 04/2005
Item 2 – Code of Ethics – Not required as this is not an annual filing.
Item 3 – Audit Committee Financial Expert – Not applicable with semi-annual filing.
Item 4 – Principal Accountant Fees and Services – Not applicable with semi-annual filing.
Item 5 – Audit Committee of Listed Registrants – Not applicable.
Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.
Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.
Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.
Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.
Item 11 – 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 12 – Exhibits
(a) | Code of Ethics – Not applicable with semi-annual filing. |
(b) | Certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act – Attached hereto |
SIGNATURES
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.
(Registrant) Dryden California Municipal Fund | ||
By (Signature and Title)* | /s/ DEBORAH A. DOCS | |
Deborah A. Docs | ||
Secretary |
Date April 25, 2005
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 (Signature and Title)* | /s/ JUDY A. RICE | |
Judy A. Rice | ||
President and Principal Executive Officer | ||
Date April 25, 2005 | ||
By (Signature and Title)* | /s/ GRACE C. TORRES | |
Grace C. Torres | ||
Treasurer and Principal Financial Officer |
Date April 25, 2005
* | Print the name and title of each signing officer under his or her signature. |