|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not
designated
as hedging instruments,
carried at fair value
|
|
Asset Derivatives
|
|
|
Liability Derivatives
|
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
|
Balance Sheet
Location
|
|
Fair
Value
|
|
Credit contracts
|
|
Unrealized appreciation on swap agreements
|
|
$
|
1,230,663
|
|
|
Unrealized depreciation on swap agreements
|
|
$
|
839,312
|
|
Credit contracts
|
|
Premiums paid for swap agreements
|
|
|
595,492
|
|
|
Premiums received for swap agreements
|
|
|
726,075
|
|
Interest rate contracts
|
|
Due from brokervariation margin
|
|
|
12,878,766
|
*
|
|
Due from brokervariation margin
|
|
|
2,331,358
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
14,704,921
|
|
|
|
|
$
|
3,896,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Includes cumulative appreciation/depreciation of futures contracts as reported in the schedule of open futures contracts. Only unsettled variation margin receivable (payable) is
reported within the Statement of Assets and Liabilities.
|
The
effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Realized Gain or (Loss) on Derivatives
Recognized in Income
|
|
Derivatives not designated as hedging
instruments, carried at fair value
|
|
Futures
|
|
|
Swaps
|
|
|
Total
|
|
Credit contracts
|
|
$
|
|
|
|
$
|
473,112
|
|
|
$
|
473,112
|
|
Interest rate contracts
|
|
|
11,190,693
|
|
|
|
(130
|
)
|
|
|
11,190,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
11,190,693
|
|
|
$
|
472,982
|
|
|
$
|
11,663,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Unrealized Appreciation or (Depreciation) on
Derivatives Recognized in Income
|
|
Derivatives not designated as hedging
instruments, carried at fair value
|
|
Futures
|
|
|
Swaps
|
|
|
Total
|
|
Credit contracts
|
|
$
|
|
|
|
$
|
643,114
|
|
|
$
|
643,114
|
|
Interest rate contracts
|
|
|
9,112,264
|
|
|
|
|
|
|
|
9,112,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
9,112,264
|
|
|
$
|
643,114
|
|
|
$
|
9,755,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
For the year ended December 31, 2013, the Funds average volume of derivative activities is as follows:
|
|
|
|
|
|
|
Futures Long Position
(Value at Trade Date)
|
|
|
Futures Short Position
(Value at Trade Date)
|
|
$
|
1,841,578,262
|
|
|
$
|
877,372,219
|
|
|
|
Credit Default
Swaps as Buyer
(Notional Amount in USD (000))
|
|
|
Credit Default
Swaps as Writer
(Notional Amount in USD (000))
|
|
|
$32,620
|
|
|
|
$47,000
|
|
The Portfolio invested in financial instruments and
derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting as well as instruments subject to
collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.
Offsetting of financial instrument and derivative assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Gross Amounts
Recognized
|
|
Gross Amounts
not subject to
netting
|
|
|
Gross Amounts
Offset in the
Statement of
Financial Position
|
|
|
Net Amounts
Presented in the
Statement of
Financial Position
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities on loan
|
|
$655,061,386
|
|
$
|
|
|
|
$
|
|
|
|
$
|
655,061,386
|
|
Exchange-traded and cleared derivatives
|
|
895,140
|
|
|
|
|
|
|
|
|
|
|
895,140
|
|
Over-the-counter derivatives*
|
|
1,230,663
|
|
|
|
|
|
|
|
|
|
|
1,230,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
657,187,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter derivatives*
|
|
(839,312)
|
|
|
|
|
|
|
|
|
|
|
(839,312
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collateral Amounts Pledged/(Received):
|
|
|
|
|
|
|
|
Exchange-traded and cleared derivatives
|
|
|
|
|
|
|
|
Over-the-counter derivatives
|
|
|
|
(218,040
|
)
|
|
|
Securities on loan
|
|
|
|
(655,061,386
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Amount
|
|
|
$
|
1,068,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Over-the-counter derivatives may consist of forward foreign currency exchange contracts, options contracts and swap agreements. The amounts disclosed above represent the exposure
to one or more counterparties. For further detail on individual derivative contracts and the corresponding unrealized appreciation (depreciation) by counterparty, see the Portfolio of Investments.
|
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
51
|
|
Statement of Assets and
Liabilities
as of December 31, 2013
|
|
|
|
|
Assets
|
|
|
|
|
Investments at value, including securities on loan of $655,061,386:
|
|
|
|
|
Unaffiliated Investments (cost $9,107,802,132)
|
|
$
|
9,198,275,871
|
|
Affiliated Investments (cost $703,727,142)
|
|
|
703,727,142
|
|
Cash
|
|
|
6,966,649
|
|
Dividends and interest receivable
|
|
|
84,012,604
|
|
Receivable for Fund shares sold
|
|
|
32,944,078
|
|
Receivable for investments sold
|
|
|
21,646,550
|
|
Unrealized appreciation on swap agreements
|
|
|
1,230,663
|
|
Due from brokervariation margin
|
|
|
895,140
|
|
Premiums paid for swap agreements
|
|
|
595,492
|
|
Prepaid expenses
|
|
|
85,464
|
|
|
|
|
|
|
Total assets
|
|
|
10,050,379,653
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Payable to broker for collateral for securities on loan
|
|
|
671,759,100
|
|
Payable for Fund shares reacquired
|
|
|
41,332,298
|
|
Dividends payable
|
|
|
6,956,545
|
|
Management fee payable
|
|
|
3,191,638
|
|
Distribution fee payable
|
|
|
2,382,033
|
|
Accrued expenses
|
|
|
1,313,358
|
|
Unrealized depreciation on swap agreements
|
|
|
839,312
|
|
Premiums received for swap agreements
|
|
|
726,075
|
|
Payable for investments purchased
|
|
|
324,610
|
|
Affiliated transfer agent fee payable
|
|
|
73,804
|
|
Deferred directors fees
|
|
|
4,587
|
|
|
|
|
|
|
Total liabilities
|
|
|
728,903,360
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
9,321,476,293
|
|
|
|
|
|
|
|
|
|
|
|
Net assets were comprised of:
|
|
|
|
|
Common stock, at par
|
|
$
|
8,215,242
|
|
Paid-in capital in excess of par
|
|
|
9,372,518,996
|
|
|
|
|
|
|
|
|
|
9,380,734,238
|
|
Undistributed net investment income
|
|
|
186,053
|
|
Accumulated net realized loss on investment transactions
|
|
|
(160,858,072
|
)
|
Net unrealized appreciation on investments
|
|
|
101,414,074
|
|
|
|
|
|
|
Net assets, December 31, 2013
|
|
$
|
9,321,476,293
|
|
|
|
|
|
|
See Notes to
Financial Statements.
|
|
|
|
|
Class A
|
|
|
|
|
Net asset value and redemption price per share
($2,791,686,117 ÷ 246,320,284 shares of common stock issued and outstanding)
|
|
|
$11.33
|
|
Maximum sales charge (3.25% of offering price)
|
|
|
0.38
|
|
|
|
|
|
|
Maximum offering price to public
|
|
|
$11.71
|
|
|
|
|
|
|
|
|
Class B
|
|
|
|
|
Net asset value, offering price and redemption price per share
($57,649,217 ÷ 5,086,607 shares of common stock issued and
outstanding)
|
|
|
$11.33
|
|
|
|
|
|
|
|
|
Class C
|
|
|
|
|
Net asset value, offering price and redemption price per share
($1,970,166,559 ÷ 173,826,770 shares of common stock issued and
outstanding)
|
|
|
$11.33
|
|
|
|
|
|
|
|
|
Class Q
|
|
|
|
|
Net asset value, offering price and redemption price per share
($80,059,198 ÷ 7,047,502 shares of common stock issued and
outstanding)
|
|
|
$11.36
|
|
|
|
|
|
|
|
|
Class R
|
|
|
|
|
Net asset value, offering price and redemption price per share
($111,181,034 ÷ 9,809,528 shares of common stock issued and
outstanding)
|
|
|
$11.33
|
|
|
|
|
|
|
|
|
Class Z
|
|
|
|
|
Net asset value, offering price and redemption price per share
($4,310,734,168 ÷ 379,433,511 shares of common stock issued and
outstanding)
|
|
|
$11.36
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
53
|
|
Statement of Operations
Year Ended December 31, 2013
|
|
|
|
|
Net Investment Income
|
|
|
|
|
Income
|
|
|
|
|
Interest income
|
|
$
|
252,251,589
|
|
Affiliated income from securities loaned, net
|
|
|
868,421
|
|
Unaffiliated dividend income
|
|
|
259,872
|
|
Affiliated dividend income
|
|
|
142,201
|
|
|
|
|
|
|
Total income
|
|
|
253,522,083
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Management fee
|
|
|
37,954,730
|
|
Distribution feeClass A
|
|
|
8,153,297
|
|
Distribution feeClass B
|
|
|
599,718
|
|
Distribution feeClass C
|
|
|
21,232,481
|
|
Distribution feeClass R
|
|
|
587,051
|
|
Transfer agents fees and expenses (including affiliated expense of $571,000) (Note 3)
|
|
|
8,115,000
|
|
Custodians fees and expenses
|
|
|
964,000
|
|
Reports to shareholders
|
|
|
453,000
|
|
Registration fees
|
|
|
411,000
|
|
Directors fees
|
|
|
197,000
|
|
Insurance
|
|
|
144,000
|
|
Legal fees and expenses
|
|
|
82,000
|
|
Audit fee
|
|
|
33,000
|
|
Miscellaneous
|
|
|
45,533
|
|
|
|
|
|
|
Total expenses
|
|
|
78,971,810
|
|
Distribution fee waivers (Note 2)
|
|
|
(1,554,567
|
)
|
|
|
|
|
|
Net expenses
|
|
|
77,417,243
|
|
|
|
|
|
|
Net investment income
|
|
|
176,104,840
|
|
|
|
|
|
|
|
|
Realized And Unrealized Gain (Loss) On Investment Transactions
|
|
|
|
|
Net realized gain on:
|
|
|
|
|
Investment transactions
|
|
|
54,192,427
|
|
Futures transactions
|
|
|
11,190,693
|
|
Swap agreement transactions
|
|
|
472,982
|
|
|
|
|
|
|
|
|
|
65,856,102
|
|
|
|
|
|
|
Net change in unrealized appreciation (depreciation) on:
|
|
|
|
|
Investments
|
|
|
(175,188,538
|
)
|
Futures contracts
|
|
|
9,112,264
|
|
Swap agreements
|
|
|
643,114
|
|
|
|
|
|
|
|
|
|
(165,433,160
|
)
|
|
|
|
|
|
Net loss on investment transactions
|
|
|
(99,577,058
|
)
|
|
|
|
|
|
Net Increase In Net Assets Resulting From Operations
|
|
$
|
76,527,782
|
|
|
|
|
|
|
See Notes to Financial Statements.
Statement of Changes in
Net Assets
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
Increase (Decrease) In Net Assets
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
176,104,840
|
|
|
$
|
173,070,203
|
|
Net realized gain on investment transactions
|
|
|
65,856,102
|
|
|
|
28,474,463
|
|
Net change in unrealized appreciation (depreciation) on investments
|
|
|
(165,433,160
|
)
|
|
|
171,328,109
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
76,527,782
|
|
|
|
372,872,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income (Note 1)
|
|
|
|
|
|
|
|
|
Class A
|
|
|
(78,909,212
|
)
|
|
|
(69,127,462
|
)
|
Class B
|
|
|
(1,290,312
|
)
|
|
|
(1,326,026
|
)
|
Class C
|
|
|
(45,668,550
|
)
|
|
|
(46,109,089
|
)
|
Class Q
|
|
|
(2,231,911
|
)
|
|
|
(1,614,386
|
)
|
Class R
|
|
|
(2,088,266
|
)
|
|
|
(876,867
|
)
|
Class Z
|
|
|
(139,953,844
|
)
|
|
|
(127,587,287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(270,142,095
|
)
|
|
|
(246,641,117
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund share transactions (Net of share conversions) (Note 6)
|
|
|
|
|
|
|
|
|
Net proceeds from shares sold
|
|
|
4,647,903,752
|
|
|
|
5,302,165,864
|
|
Net asset value of shares issued in reinvestment of dividends
|
|
|
182,081,852
|
|
|
|
161,000,576
|
|
Cost of shares reacquired
|
|
|
(4,766,116,399
|
)
|
|
|
(2,193,647,932
|
)
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from Fund share transactions
|
|
|
63,869,205
|
|
|
|
3,269,518,508
|
|
|
|
|
|
|
|
|
|
|
Total increase (decrease)
|
|
|
(129,745,108
|
)
|
|
|
3,395,750,166
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
9,451,221,401
|
|
|
|
6,055,471,235
|
|
|
|
|
|
|
|
|
|
|
End of year(a)
|
|
$
|
9,321,476,293
|
|
|
$
|
9,451,221,401
|
|
|
|
|
|
|
|
|
|
|
(a) Includes undistributed net investment income of:
|
|
$
|
186,053
|
|
|
$
|
29,293
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
55
|
|
Notes to Financial
Statements
Prudential Short-Term Corporate Bond Fund, Inc. (the
Fund), is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (1940 Act). The Funds investment objective is high current income consistent with the preservation of
principal.
Note 1. Accounting Policies
The following accounting policies conform to U.S. generally accepted accounting
principles. The Fund consistently follows such policies in the preparation of its financial statements.
Security Valuation:
The Fund holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (NYSE) is open for trading. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the Board) has adopted Valuation Procedures for security valuation
under which fair valuation responsibilities have been delegated to Prudential Investments LLC (PI or Manager). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the
valuation of portfolio securities and other assets. The Valuation Procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not
readily available or not deemed representative of fair value. A record of the Valuation Committees actions is subject to the Boards review, approval, and ratification at its next regularly-scheduled quarterly meeting.
Various inputs determine how the Funds investments are valued, all of which are
categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.
Common stocks, exchange-traded funds, and derivative instruments that are traded on a national securities exchange are valued at the last sale price as of the close
of trading on the applicable exchange. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in
the fair value hierarchy.
In the event that no sale or official closing price on valuation date exists, these securities are generally valued at
the mean between the last reported bid and asked prices, or at the last bid price in the absence of an asked price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable and considered to be significant
to the valuation.
Common stocks traded on foreign securities exchanges are
valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as
applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable and considered to be significant to the valuation.
Investments in open-end, non-exchange-traded mutual funds are valued at their net asset
values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the over-the-counter market are generally valued at
prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes,
default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.
Over-the-counter derivative instruments are generally valued using pricing vendor
services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.
Securities and other assets that cannot be priced according to the methods described
above are valued based on pricing methodologies approved by the Board. In the event that significant unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.
When determining the fair value of securities, some of the factors influencing the
valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuers financial condition and the markets in which it does business; the cost of the investment;
the size of the
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Prudential Short-Term Corporate Bond Fund, Inc.
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57
|
|
Notes to Financial Statements
continued
holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports
or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a securitys most recent closing
price and from the price used by other mutual funds to calculate their net asset values.
Restricted and Illiquid Securities:
Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition
under securities law (restricted securities). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or
contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at
the time considered most advantageous by its Subadviser and may incur expenses that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal
restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under
Section 4(2) of the Securities Act, may be deemed liquid by the Funds Subadviser under the guidelines adopted by the Fund. However, the liquidity of the Funds investments in Rule 144A securities could be impaired if trading does not
develop or declines.
Financial Futures Contracts:
A financial
futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount
of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the initial margin. Subsequent payments, known as variation margin, are made or received by the Fund each day,
depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is
realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts. Financial futures contracts involve elements of risk in excess of the amounts reflected on the Statement of Assets and Liabilities.
The Fund invested in financial futures contracts in order to gain market exposure to certain sectors and for yield
curve and duration management. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. With exchange-traded futures contracts, there is minimal counterparty credit risk to the Fund since the exchanges clearinghouse acts
as counterparty to all exchange traded futures and guarantees the futures contracts against default.
Swap Agreements:
The Fund may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument
for the return generated by another instrument. Swap agreements are negotiated in the over-the-counter market and may be executed either directly with the counterparty (OTC Traded) or through a central clearing facility, such as a
registered commodities exchange (Exchange Traded). Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments.
Payments received or paid by the Fund are recorded as realized gains or losses upon
termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at reporting date, if any, are listed on the Portfolio of Investments.
Credit Default Swaps:
Credit default swaps involve one party (the protection
buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a credit event) for the referenced
entity, typically corporate issues or sovereign issues of an emerging country, on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit
index.
The Fund is subject to credit risk in the normal course of pursuing
its investment objectives. The Fund entered into credit default swaps to provide a measure of protection against defaults of the issuers. The Fund sold protection using credit default swaps to take an active short position with respect to the
likelihood of a particular issuers default. The Funds maximum risk of loss from counterparty credit risk for purchased credit default swaps is the inability of the counterparty to honor the contract up to the notional value based on a
credit event.
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Prudential Short-Term Corporate Bond Fund, Inc.
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59
|
|
Notes to Financial
Statements
continued
As a
seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Portfolio effectively
increases its investment risk because, in addition to its total net assets, the Portfolio may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Fund, as a seller of protection, could be
required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the
respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered for the same referenced entity or index. As a buyer of protection, the Fund generally receives an
amount up to the notional value of the swap if a credit event occurs.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate or sovereign issues
of an emerging country as of period end are disclosed in the footnotes to the Portfolio of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default
risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. For credit default swap agreements on
asset-backed securities and credit indices, the quoted market prices and resulting values serve as indicators of the current status of the payment/performance risk. Wider credit spreads and increased market value in absolute terms, when compared to
the notional amount of the swap, represent a deterioration of the referenced entitys credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
Master Netting Arrangements:
The Fund is subject to various Master Agreements,
or netting arrangements, with select counterparties. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the
receipt of collateral from the counterparty by the Fund to cover the Funds exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. The right to set-off exists when all the conditions
are met such that each of the parties owes the other determinable amounts, the reporting party has the
right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there
were no instances where the right of set-off existed and management has not elected to offset.
The Fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over-the-counter derivative and foreign exchange
contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties general obligations, representations, agreements, collateral requirements, events of default and early
termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Funds custodian and with respect to those amounts which can be
sold or re-pledged, is presented in the Portfolio of Investments. Collateral pledged by the Fund is segregated by the Funds custodian and identified in the Portfolio of Investments. Collateral can be in the form of cash or debt securities
issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Funds net position with each counterparty. Termination events
applicable to the Fund may occur upon a decline in the Funds net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterpartys long-term
and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses
and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Funds counterparties to elect early termination could impact the Funds future derivative activity.
In addition to each instruments primary underlying risk exposure
(e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist,
the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio
may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of
either party. Such over-the-counter derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under
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Prudential Short-Term Corporate Bond Fund, Inc.
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61
|
|
Notes to Financial
Statements
continued
those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.
As of December 31, 2013, the Fund has not met conditions under such agreements
which give the counterparty the right to call for an early termination.
Forward currency contracts, written options, short sales, swaps and financial futures contracts involve elements of both market and credit risk in excess of the
amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.
Securities Lending:
The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market
value of the securities loaned. Collateral pledged by each borrower is invested in a highly liquid short-term money market fund and is marked to market daily, based on the previous days market value, such that the value of the collateral
exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the
borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities,
and any interest on the investment of cash received as collateral. The Fund also continues to receive interest and dividends or amounts equivalent thereto, on the securities loaned and recognizes any unrealized gain or loss in the market price of
the securities loaned that may occur during the term of the loan.
Securities Transactions and Net Investment Income:
Securities transactions are recorded on the trade date. Realized gains or losses from investment and
currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the
accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management, that may differ from actual.
Net investment income or loss (other than distribution fees, which are charged directly to the respective class and transfer agency fees specific to Class Q shares
which are charged to that share class) and unrealized and realized gains or losses are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.
Dividends and Distributions:
The Fund expects to pay dividends from net investment income monthly and
distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations 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 undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as
appropriate.
Taxes:
It is the Funds policy to continue to meet
the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is
required.
Estimates:
The preparation of 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
subadvisers 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 Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers of the Fund, occupancy and certain clerical
and bookkeeping costs of the Fund. The Fund bears all other cost and expenses.
The management fee paid to PI is computed daily and payable monthly, at an annual rate of .40% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Investment Management Services
LLC (PIMS), which acts as the distributor of its Class A, Class B, Class C, Class Q, Class R, and Class Z shares. The Fund compensates PIMS for distributing and servicing the Funds Class A, Class B, Class C, and Class R
shares pursuant to plans of distribution (the Class A, B, C, and R Plans), regardless of expenses actually incurred. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as
distributor of the Class Q or Class Z shares of the Fund.
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Prudential Short-Term Corporate Bond Fund, Inc.
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63
|
|
Notes to Financial
Statements
continued
Pursuant
to the Class A, B, C, and R Plans, the Fund compensates PIMS for distribution-related activities at an annual rate of up to .30%, 1%, 1%, and .75% of the average daily net assets of the Class A, B, C, and R shares, respectively. For the
year ended December 31, 2013, PIMS contractually agreed to limit such fees to .25% and .50% of the average daily net assets of the Class A and Class R shares, respectively.
PIMS has advised the Fund that it received $2,468,751 in front-end sales charges resulting from sales of Class A shares during the
year ended December 31, 2013. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the year ended December 31, 2013, it received
$176,168, $108,134 and $588,014 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.
PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial,
Inc. (Prudential).
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 Funds transfer agent. Transfer agents fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates,
where applicable.
PIM is the Funds securities lending agent. For the
year ended December 31, 2013, PIM has been compensated $259,222 for these services.
The Fund invests in the Prudential Core Taxable Money Market Fund (the Core Fund), a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PI. Earnings
from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities, other than short-term investments and U.S. Government securities, for the year ended December 31, 2013, were
$3,426,237,770 and $3,177,968,090 respectively.
Note 5. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income
tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. In order to present undistributed net investment income, accumulated net realized loss on investment transactions and paid-in
capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income, accumulated net realized loss on investment transactions
and paid-in capital in excess of par. For the year ended December 31, 2013, the adjustments were to increase undistributed net investment income by $94,194,015, increase accumulated net realized loss on investment transactions by $88,863,385
and decrease paid-in capital in excess of par by $5,330,630 due to differences in the treatment for book and tax purposes of accreting market discount and amortization of premiums, certain transactions involving swaps, paydown gains/losses, write
off of capital loss carryforward due to expiration and other book to tax adjustments. Net investment income, net realized gain on investment transactions and net assets were not affected by this change.
For the years ended December 31, 2013 and December 31, 2012, the tax character of
dividends paid by the Fund were $270,142,095 and $246,641,117 of ordinary income, respectively.
As of December 31, 2013, the accumulated undistributed earnings on a tax basis was $194,031. This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing
differences between financial and tax reporting.
The United States
federal income tax basis of the Funds investments and the net unrealized depreciation as of December 31, 2013 were as follows:
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Tax Basis
|
|
Appreciation
|
|
Depreciation
|
|
Net
Unrealized
Depreciation
|
|
Other Cost
Basis
Adjustments
|
|
Total Net
Unrealized
Depreciation
|
$9,939,202,517
|
|
$111,186,595
|
|
$(148,386,099)
|
|
$(37,199,504)
|
|
$389,537
|
|
$(36,809,967)
|
The difference between book basis and tax basis is
primarily attributable to the deferred losses on wash sales and differences in the treatment of accreting market discount and premium amortization for book and tax purposes. Other cost basis adjustments are primarily attributable to unrealized
appreciation on swaps.
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Prudential Short-Term Corporate Bond Fund, Inc.
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65
|
|
Notes to Financial
Statements
continued
Under the Regulated Investment Company Modernization Act of 2010 (the Act),
the Fund is permitted to carryforward net capital losses realized on or after January 1, 2011 (post-enactment losses) for an unlimited period. Post-enactment losses are required to be utilized before the utilization of losses incurred
prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before December 31, 2011 (pre-enactment losses) may have an increased likelihood to expire unused.
Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The Fund utilized approximately
$12,302,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended December 31, 2013. Additionally, approximately $5,329,000 of its capital loss carryforward was written off unused due to expiration. No
capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of December 31, 2013, the pre and post-enactment losses were approximately:
|
|
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|
Post-Enactment Losses:
|
|
$
|
5,378,000
|
|
|
|
|
|
|
Pre-Enactment Losses:
|
|
|
|
|
Expiring 2014
|
|
$
|
7,851,000
|
|
Expiring 2015
|
|
|
1,945,000
|
|
Expiring 2018
|
|
|
1,604,000
|
|
|
|
|
|
|
|
|
$
|
11,400,000
|
|
|
|
|
|
|
The Fund elected to treat post-October capital losses
of approximately $5,860,000 as having been incurred in the following fiscal year (December 31, 2014).
Management has analyzed the Funds tax positions taken on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Funds financial
statements for the current reporting period. The Funds federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue
Service and state departments of revenue.
Note 6. Capital
The Fund offers Class A, Class B, Class C, Class Q, Class R, and
Class Z shares. Class A shares are sold with a front-end sales charge of up to 3.25%. All investors who purchased Class A shares in an amount of $1 million or more and sell these
shares within 18 months of purchase are subject to a contingent deferred sales charge (CDSC) of .50%. The Class A CDSC is waived for purchases by certain retirement or benefit
plans. Class B shares are sold with a CDSC of 3% which decreases by 1% annually to 1% in the third and fourth years and 0% in the fifth year. Class B shares automatically convert to Class A shares on a quarterly basis, approximately five years
after purchase. Class C shares are sold with a CDSC of 1% on sales of shares made within 12 months of purchase. A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class R
shares are available to certain retirement plans, clearing and settlement firms. Class Q, Class R and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.
Under certain circumstances, an exchange may be made from specified share
classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock.
There are 2 billion shares of common stock authorized at $.01 par value per share, divided into six classes, designated Class A, Class B, Class C, Class Q,
Class R, and Class Z common stock. Class A shares consists of 475 million authorized shares, Class B consists of 25 million authorized shares, Class C consists of 400 million authorized shares, Class Q and Class R shares
each consist of 100 million authorized shares, and Class Z shares consist of 900 million authorized shares.
Transactions in shares of common stock were as follows:
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|
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|
|
Class A
|
|
Shares
|
|
|
Amount
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
113,014,502
|
|
|
$
|
1,292,292,112
|
|
Shares issued in reinvestment of dividends
|
|
|
5,843,266
|
|
|
|
66,677,465
|
|
Shares reacquired
|
|
|
(95,935,658
|
)
|
|
|
(1,095,916,335
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
22,922,110
|
|
|
|
263,053,242
|
|
Shares issued upon conversion from Class B, Class C and Class Z
|
|
|
1,266,059
|
|
|
|
14,463,620
|
|
Shares reacquired upon conversion into Class Z
|
|
|
(2,455,416
|
)
|
|
|
(28,055,115
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
21,732,753
|
|
|
$
|
249,461,747
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
121,449,092
|
|
|
$
|
1,399,663,304
|
|
Shares issued in reinvestment of dividends
|
|
|
5,017,932
|
|
|
|
57,863,096
|
|
Shares reacquired
|
|
|
(55,133,828
|
)
|
|
|
(635,188,582
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
71,333,196
|
|
|
|
822,337,818
|
|
Shares issued upon conversion from Class B and Class Z
|
|
|
1,655,965
|
|
|
|
19,097,397
|
|
Shares reacquired upon conversion into Class Z
|
|
|
(3,987,290
|
)
|
|
|
(45,924,296
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
69,001,871
|
|
|
$
|
795,510,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
67
|
|
Notes to Financial
Statements
continued
|
|
|
|
|
|
|
|
|
Class B
|
|
Shares
|
|
|
Amount
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
1,338,904
|
|
|
$
|
15,320,046
|
|
Shares issued in reinvestment of dividends
|
|
|
104,829
|
|
|
|
1,196,585
|
|
Shares reacquired
|
|
|
(1,293,807
|
)
|
|
|
(14,767,743
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
149,926
|
|
|
|
1,748,888
|
|
Shares reacquired upon conversion into Class A
|
|
|
(184,257
|
)
|
|
|
(2,100,454
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
(34,331
|
)
|
|
$
|
(351,566
|
)
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
1,819,804
|
|
|
$
|
20,959,092
|
|
Shares issued in reinvestment of dividends
|
|
|
105,022
|
|
|
|
1,210,895
|
|
Shares reacquired
|
|
|
(790,670
|
)
|
|
|
(9,099,668
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
1,134,156
|
|
|
|
13,070,319
|
|
Shares reacquired upon conversion into Class A
|
|
|
(215,652
|
)
|
|
|
(2,485,387
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
918,504
|
|
|
$
|
10,584,932
|
|
|
|
|
|
|
|
|
|
|
Class C
|
|
|
|
|
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
44,642,519
|
|
|
$
|
511,518,153
|
|
Shares issued in reinvestment of dividends
|
|
|
2,972,382
|
|
|
|
33,933,732
|
|
Shares reacquired
|
|
|
(56,092,602
|
)
|
|
|
(639,717,512
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
(8,477,701
|
)
|
|
|
(94,265,627
|
)
|
Shares reacquired upon conversion into Class A and Class Z
|
|
|
(2,407,452
|
)
|
|
|
(27,462,307
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
(10,885,153
|
)
|
|
$
|
(121,727,934
|
)
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
74,335,452
|
|
|
$
|
856,352,012
|
|
Shares issued in reinvestment of dividends
|
|
|
2,879,478
|
|
|
|
33,202,331
|
|
Shares reacquired
|
|
|
(29,042,522
|
)
|
|
|
(334,496,868
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
48,172,408
|
|
|
|
555,057,475
|
|
Shares reacquired upon conversion into Class Z
|
|
|
(863,133
|
)
|
|
|
(9,975,928
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
47,309,275
|
|
|
$
|
545,081,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class Q
|
|
Shares
|
|
|
Amount
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
2,228,320
|
|
|
$
|
25,467,491
|
|
Shares issued in reinvestment of dividends
|
|
|
195,105
|
|
|
|
2,230,857
|
|
Shares reacquired
|
|
|
(313,226
|
)
|
|
|
(3,579,271
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
2,110,199
|
|
|
$
|
24,119,077
|
|
|
|
|
|
|
|
|
|
|
Period ended December 31, 2012*:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
660,057
|
|
|
$
|
7,640,115
|
|
Shares issued in reinvestment of dividends
|
|
|
139,625
|
|
|
|
1,614,386
|
|
Shares reacquired
|
|
|
(442,979
|
)
|
|
|
(5,115,846
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
356,703
|
|
|
|
4,138,655
|
|
Shares issued upon conversion from Class Z
|
|
|
4,580,600
|
|
|
|
52,905,927
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
4,937,303
|
|
|
$
|
57,044,582
|
|
|
|
|
|
|
|
|
|
|
Class R
|
|
|
|
|
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
7,258,556
|
|
|
$
|
82,890,363
|
|
Shares issued in reinvestment of dividends
|
|
|
168,943
|
|
|
|
1,925,253
|
|
Shares reacquired
|
|
|
(1,657,654
|
)
|
|
|
(18,922,458
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
5,769,845
|
|
|
$
|
65,893,158
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
2,787,496
|
|
|
$
|
32,187,717
|
|
Shares issued in reinvestment of dividends
|
|
|
63,423
|
|
|
|
731,605
|
|
Shares reacquired
|
|
|
(789,788
|
)
|
|
|
(9,105,066
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
2,061,131
|
|
|
$
|
23,814,256
|
|
|
|
|
|
|
|
|
|
|
Class Z
|
|
|
|
|
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
237,289,264
|
|
|
$
|
2,720,415,587
|
|
Shares issued in reinvestment of dividends
|
|
|
6,652,386
|
|
|
|
76,117,960
|
|
Shares reacquired
|
|
|
(261,349,202
|
)
|
|
|
(2,993,213,080
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
(17,407,552
|
)
|
|
|
(196,679,533
|
)
|
Shares issued upon conversion from Class A and Class C
|
|
|
4,800,881
|
|
|
|
54,939,361
|
|
Shares reacquired upon conversion into Class A
|
|
|
(1,028,759
|
)
|
|
|
(11,785,105
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
(13,635,430
|
)
|
|
$
|
(153,525,277
|
)
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
258,564,277
|
|
|
$
|
2,985,363,624
|
|
Shares issued in reinvestment of dividends
|
|
|
5,742,225
|
|
|
|
66,378,263
|
|
Shares reacquired
|
|
|
(103,978,289
|
)
|
|
|
(1,200,641,902
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding before conversion
|
|
|
160,328,213
|
|
|
|
1,851,099,985
|
|
Shares issued upon conversion from Class A and Class C
|
|
|
4,838,597
|
|
|
|
55,900,224
|
|
Shares reacquired upon conversion into Class A and Class Q
|
|
|
(6,015,505
|
)
|
|
|
(69,517,937
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in shares outstanding
|
|
|
159,151,305
|
|
|
$
|
1,837,482,272
|
|
|
|
|
|
|
|
|
|
|
*
|
Commencement of offering on March 2, 2012.
|
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
69
|
|
Notes to Financial
Statements
continued
Note 7.
Borrowings
The Fund, along with other affiliated registered investment
companies (the Funds), is a party to a Syndicated Credit Agreement (SCA) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides
for a commitment of $900 million for the period November 5, 2013 through November 4, 2014. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 5, 2013, the Funds had another SCA with
substantially similar terms. Interest on any borrowings under the SCA is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly.
The Fund did not utilize the SCA during the year ended December 31, 2013.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
Per Share Operating Performance(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Year
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.47
|
|
|
|
$11.40
|
|
|
|
$10.47
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.22
|
|
|
|
.26
|
|
|
|
.32
|
|
|
|
.35
|
|
|
|
.40
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.12
|
)
|
|
|
.33
|
|
|
|
(.01
|
)
|
|
|
.19
|
|
|
|
.99
|
|
Total from investment operations
|
|
|
.10
|
|
|
|
.59
|
|
|
|
.31
|
|
|
|
.54
|
|
|
|
1.39
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.33
|
)
|
|
|
(.38
|
)
|
|
|
(.43
|
)
|
|
|
(.47
|
)
|
|
|
(.46
|
)
|
Capital Contributions(f):
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(b)
|
|
|
-
|
|
Net asset value, end of year
|
|
|
$ 11.33
|
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.47
|
|
|
|
$11.40
|
|
Total Return(c):
|
|
|
.89%
|
|
|
|
5.23%
|
|
|
|
2.77%
|
|
|
|
4.78%
|
|
|
|
13.53%
|
|
|
|
Ratios/Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (000)
|
|
|
$2,791,686
|
|
|
|
$2,596,682
|
|
|
|
$1,765,432
|
|
|
|
$1,601,862
|
|
|
|
$1,132,207
|
|
Average net assets (000)
|
|
|
$2,717,633
|
|
|
|
$2,125,935
|
|
|
|
$1,685,849
|
|
|
|
$1,459,695
|
|
|
|
$ 641,058
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses after waivers(e)
|
|
|
.76%
|
|
|
|
.78%
|
|
|
|
.77%
|
|
|
|
.77%
|
|
|
|
.81%
|
|
Expenses before waivers
|
|
|
.81%
|
|
|
|
.83%
|
|
|
|
.82%
|
|
|
|
.82%
|
|
|
|
.86%
|
|
Net investment income
|
|
|
1.91%
|
|
|
|
2.30%
|
|
|
|
2.77%
|
|
|
|
3.02%
|
|
|
|
3.58%
|
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
78%
|
|
|
|
77%
|
|
|
|
82%
|
|
|
|
196%
|
|
(a) Calculated based on average shares outstanding
during the year.
(b) Less than $.005 per share.
(c)
Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total
returns may reflect adjustments to conform to generally accepted accounting principles.
(d) Does not include expenses of the underlying portfolio in
which the Fund invests.
(e) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the
average daily net assets of the Class A shares.
(f) The Fund received payments related to a former affiliates and to an unaffiliated-third
partys settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of
settlement.
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
71
|
|
Financial Highlights
continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B Shares
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
Per Share Operating Performance(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Year
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11 .47
|
|
|
|
$11.40
|
|
|
|
$10.47
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.13
|
|
|
|
.18
|
|
|
|
.23
|
|
|
|
.26
|
|
|
|
.31
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.11
|
)
|
|
|
.32
|
|
|
|
-
|
(b)
|
|
|
.19
|
|
|
|
1.00
|
|
Total from investment operations
|
|
|
.02
|
|
|
|
.50
|
|
|
|
.23
|
|
|
|
.45
|
|
|
|
1.31
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.25
|
)
|
|
|
(.29
|
)
|
|
|
(.35
|
)
|
|
|
(.38
|
)
|
|
|
(.38
|
)
|
Capital Contributions(e):
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(b)
|
|
|
-
|
|
Net asset value, end of year
|
|
|
$11.33
|
|
|
|
$11.56
|
|
|
|
$11 .35
|
|
|
|
$11.47
|
|
|
|
$11.40
|
|
Total Return(c):
|
|
|
.14%
|
|
|
|
4.44%
|
|
|
|
2.01%
|
|
|
|
4.01%
|
|
|
|
12.64%
|
|
|
|
Ratios/Supplemental Data:
|
|
Net assets, end of year (000)
|
|
|
$57,649
|
|
|
|
$59,209
|
|
|
|
$47,686
|
|
|
|
$38,478
|
|
|
|
$20,847
|
|
Average net assets (000)
|
|
|
$59,969
|
|
|
|
$52,940
|
|
|
|
$43,517
|
|
|
|
$29,898
|
|
|
|
$14,980
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.51%
|
|
|
|
1 .53%
|
|
|
|
1.52%
|
|
|
|
1.52%
|
|
|
|
1.56%
|
|
Net investment income
|
|
|
1.16%
|
|
|
|
1 .56%
|
|
|
|
2.01%
|
|
|
|
2.26%
|
|
|
|
2.83%
|
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
78%
|
|
|
|
77%
|
|
|
|
82%
|
|
|
|
196%
|
|
(a) Calculated based on average shares outstanding
during the year.
(b) Less than $.005 per share.
(c)
Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total
returns may reflect adjustments to conform to generally accepted accounting principles.
(d) Does not include expenses of the underlying portfolio in
which the Fund invests.
(e) The Fund received payments related to a former affiliates and to an unaffiliated-third partys settlement of
regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C Shares
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
Per Share Operating Performance(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Year
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.48
|
|
|
|
$11.40
|
|
|
|
$10.47
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.13
|
|
|
|
.18
|
|
|
|
.23
|
|
|
|
.27
|
|
|
|
.34
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.11
|
)
|
|
|
.32
|
|
|
|
(.01
|
)
|
|
|
.20
|
|
|
|
1.01
|
|
Total from investment operations
|
|
|
.02
|
|
|
|
.50
|
|
|
|
.22
|
|
|
|
.47
|
|
|
|
1.35
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.25
|
)
|
|
|
(.29
|
)
|
|
|
(.35
|
)
|
|
|
(.39
|
)
|
|
|
(.42
|
)
|
Capital Contributions(f):
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(b)
|
|
|
-
|
|
Net asset value, end of year
|
|
|
$11.33
|
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.48
|
|
|
|
$11.40
|
|
Total Return(c):
|
|
|
.14%
|
|
|
|
4.45%
|
|
|
|
1.92%
|
|
|
|
4.19%
|
|
|
|
13.05%
|
|
|
|
Ratios/Supplemental Data:
|
|
Net assets, end of year (000)
|
|
|
$1,970,167
|
|
|
|
$2,135,745
|
|
|
|
$1,559,205
|
|
|
|
$1,345,828
|
|
|
|
$789,883
|
|
Average net assets (000)
|
|
|
$2,123,254
|
|
|
|
$1,842,751
|
|
|
|
$1,401,509
|
|
|
|
$1,133,925
|
|
|
|
$341,332
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses(e)
|
|
|
1.51%
|
|
|
|
1.53%
|
|
|
|
1.52%
|
|
|
|
1.45%
|
|
|
|
1.31%
|
|
Net investment income
|
|
|
1.16%
|
|
|
|
1.55%
|
|
|
|
2.01%
|
|
|
|
2.33%
|
|
|
|
3.08%
|
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
78%
|
|
|
|
77%
|
|
|
|
82%
|
|
|
|
196%
|
|
(a)
|
Calculated based on average shares outstanding during the year.
|
(b)
|
Less than $.005 per share.
|
(c) Total return does not consider the
effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to
conform to generally accepted accounting principles.
(d) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .75% of the average daily net assets of the Class C
shares through April 30, 2010.
(f) The Fund received payments related to a former affiliates and to an unaffiliated-third partys
settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
73
|
|
Financial Highlights
continued
|
|
|
|
|
|
|
|
|
|
|
Class Q Shares
|
|
|
|
Year Ended
December 31,
2013
|
|
|
|
|
March 2,
2012(a)
through
December 31,
2012
|
|
Per Share Operating Performance(b):
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Period
|
|
|
$11.59
|
|
|
|
|
|
$11.55
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.26
|
|
|
|
|
|
.23
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.12
|
)
|
|
|
|
|
.15
|
|
Total from investment operations
|
|
|
.14
|
|
|
|
|
|
.38
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.37
|
)
|
|
|
|
|
(.34
|
)
|
Net asset value, end of period
|
|
|
$11.36
|
|
|
|
|
|
$11.59
|
|
Total Return(c):
|
|
|
1.24%
|
|
|
|
|
|
3.34%
|
|
|
|
Ratios/Supplemental Data:
|
|
|
|
|
|
|
|
|
Net assets, end of period (000)
|
|
|
$80,059
|
|
|
|
|
|
$57,217
|
|
Average net assets (000)
|
|
|
$68,760
|
|
|
|
|
|
$54,722
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
.42%
|
|
|
|
|
|
.43%
|
(e)
|
Net investment income
|
|
|
2.25%
|
|
|
|
|
|
2.43%
|
(e)
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
|
|
78%
|
(f)
|
(a) Commencement of offering.
(b) Calculated based on average shares outstanding during the period.
(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of
dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods of less than one full year are not annualized.
(d) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) Annualized.
(f) Not annualized.
See Notes to Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class R Shares
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
Per Share Operating Performance(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Year
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.47
|
|
|
|
$11.40
|
|
|
|
$10.47
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.19
|
|
|
|
.23
|
|
|
|
.29
|
|
|
|
.32
|
|
|
|
.36
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.12
|
)
|
|
|
.33
|
|
|
|
(.01
|
)
|
|
|
.19
|
|
|
|
1.01
|
|
Total from investment operations
|
|
|
.07
|
|
|
|
.56
|
|
|
|
.28
|
|
|
|
.51
|
|
|
|
1.37
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.30
|
)
|
|
|
(.35
|
)
|
|
|
(.40
|
)
|
|
|
(.44
|
)
|
|
|
(.44
|
)
|
Capital Contributions(f):
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(b)
|
|
|
-
|
|
Net asset value, end of year
|
|
|
$11.33
|
|
|
|
$11.56
|
|
|
|
$11.35
|
|
|
|
$11.47
|
|
|
|
$11.40
|
|
Total Return(c):
|
|
|
.65%
|
|
|
|
4.96%
|
|
|
|
2.51%
|
|
|
|
4.52%
|
|
|
|
13.25%
|
|
|
|
Ratios/Supplemental Data:
|
|
Net assets, end of year (000)
|
|
|
$111,181
|
|
|
|
$46,706
|
|
|
|
$22,451
|
|
|
|
$16,009
|
|
|
|
$6,982
|
|
Average net assets (000)
|
|
|
$78,272
|
|
|
|
$29,321
|
|
|
|
$20,172
|
|
|
|
$11,902
|
|
|
|
$2,614
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses after waivers(e)
|
|
|
1.01%
|
|
|
|
1.03%
|
|
|
|
1.02%
|
|
|
|
1.02%
|
|
|
|
1.06%
|
|
Expenses before waivers
|
|
|
1.26%
|
|
|
|
1.28%
|
|
|
|
1.27%
|
|
|
|
1.27%
|
|
|
|
1.31%
|
|
Net investment income
|
|
|
1.67%
|
|
|
|
2.04%
|
|
|
|
2.50%
|
|
|
|
2.76%
|
|
|
|
3.34%
|
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
78%
|
|
|
|
77%
|
|
|
|
82%
|
|
|
|
196%
|
|
(a) Calculated based on average shares outstanding
during the year.
(b) Less than $.005 per share.
(c)
Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally
accepted accounting principles.
(d) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .50% of the average daily net assets of the Class R
shares.
(f) The Fund received payments related to a former affiliates and to an unaffiliated-third partys settlement of regulatory
proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.
See Notes to Financial Statements.
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
75
|
|
Financial Highlights
continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class Z Shares
|
|
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
Per Share Operating Performance(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning Of Year
|
|
|
$11.59
|
|
|
|
$11.37
|
|
|
|
$11.50
|
|
|
|
$11.42
|
|
|
|
$10.50
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.25
|
|
|
|
.29
|
|
|
|
.34
|
|
|
|
.38
|
|
|
|
.43
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
(.12
|
)
|
|
|
.34
|
|
|
|
(.01
|
)
|
|
|
.20
|
|
|
|
.98
|
|
Total from investment operations
|
|
|
.13
|
|
|
|
.63
|
|
|
|
.33
|
|
|
|
.58
|
|
|
|
1.41
|
|
Less Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.36
|
)
|
|
|
(.41
|
)
|
|
|
(.46
|
)
|
|
|
(.50
|
)
|
|
|
(.49
|
)
|
Capital Contributions(e):
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(b)
|
|
|
-
|
|
Net asset value, end of year
|
|
|
$11.36
|
|
|
|
$11.59
|
|
|
|
$11.37
|
|
|
|
$11.50
|
|
|
|
$11.42
|
|
Total Return(c):
|
|
|
1.15%
|
|
|
|
5.58%
|
|
|
|
2.95%
|
|
|
|
5.14%
|
|
|
|
13.69%
|
|
|
|
Ratios/Supplemental Data:
|
|
Net assets, end of year (000)
|
|
|
$4,310,734
|
|
|
|
$4,555,662
|
|
|
|
$2,660,697
|
|
|
|
$1,205,119
|
|
|
|
$673,025
|
|
Average net assets (000)
|
|
|
$4,440,951
|
|
|
|
$3,647,207
|
|
|
|
$1,692,922
|
|
|
|
$979,716
|
|
|
|
$325,438
|
|
Ratios to average net assets(d):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
.51%
|
|
|
|
.53%
|
|
|
|
.52%
|
|
|
|
.52%
|
|
|
|
.56%
|
|
Net investment income
|
|
|
2.16%
|
|
|
|
2.55%
|
|
|
|
2.97%
|
|
|
|
3.26%
|
|
|
|
3.83%
|
|
Portfolio turnover rate
|
|
|
65%
|
|
|
|
78%
|
|
|
|
77%
|
|
|
|
82%
|
|
|
|
196%
|
|
(a) Calculated based on average shares outstanding
during the year.
(b) Less than $.005 per share.
(c)
Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally
accepted accounting principles.
(d) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) The Fund received payments related to a former affiliates and to an unaffiliated-third partys settlement of regulatory proceedings involving
allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.
See Notes to Financial Statements.
Report of Independent Registered Public
Accounting Firm
The
Board of Directors and Shareholders
Prudential Short-Term Corporate Bond Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Prudential Short-Term Corporate Bond Fund, Inc. (hereafter
referred to as the Fund), including the portfolio of investments, as of December 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to
express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 2013, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of the Fund as of December 31, 2013, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph
above, in conformity with U.S. generally accepted accounting principles.
New York, New York
February 19, 2014
|
|
|
|
|
Prudential Short-Term Corporate Bond Fund, Inc.
|
|
|
77
|
|
Federal Income Tax Information
(Unaudited)
For the year ended December 31, 2013, the Fund reports the maximum amount
allowable but not less than 84.28% as interest related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.
Interest-related dividends do not include any distributions paid by a fund with respect to Fund tax years beginning after December 31, 2013. Consequently, this
provision expires with respect to such distributions paid after the Funds fiscal year end.