The Prudential Series Fund

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY PARTNERSHIP
For Years Ended December 31, 2008, 2007, and 2006
Note 1: Organization
On April 29, 1988, The Prudential Variable Contract Real Property Partnership (the "Partnership"), a general partnership
organized under New Jersey law, was formed through an agreement among The Prudential Insurance Company of America
("Prudential"), Pruco Life Insurance Company ("Pruco Life"), and Pruco Life Insurance Company of New Jersey ("Pruco Life of
New Jersey"). The Partnership was established as a means by which assets allocated to the real estate investment option under
certain variable life insurance and variable annuity contracts issued by the respective companies could be invested in a
commingled pool. The partners in the Partnership are Prudential, Pruco Life and Pruco Life of New Jersey. The Partners may
make additional daily cash contributions to or withdrawals from the Partnership in accordance with the provisions of the
Partnership Agreement.
The Partnership’s policy is to invest at least 65% of its assets in direct ownership interests in income-producing real estate and
participating mortgage loans.
The per share net asset value of the Partnership's shares is determined daily, consistent with the Partnership Agreement. On each
day during which the New York Stock Exchange is open for business, the net asset value of the Partnership is estimated using the
estimated fair value of its assets, principally as described in Notes 2A, 2B and 2C below, reduced by any liabilities of the
Partnership. The periodic adjustments to property values described in Notes 2A, 2B and 2C below and other adjustments to
previous estimates are made on a prospective basis. There can be no assurance that all such adjustments to estimates will be made
timely.
Shares of the Partnership are held by The Prudential Variable Contract Real Property Account, Pruco Life Variable Contract Real
Property Account and Pruco Life of New Jersey Variable Contract Real Property Account (the "Real Property Accounts") and
may be purchased and sold at the then current per share net asset value of the Partnership's net assets. Per share net asset value is
calculated by dividing the net asset value of net assets of the Partnership as determined above by the number of shares
outstanding. A contract owner participates in the Partnership through interests in the Real Property Accounts.
PREI ® is the real estate advisory unit of Prudential Investment Management, Inc. (“PIM”), which is an indirectly owned
subsidiary of Prudential Financial Inc. (“PFI”). PREI provides investment advisory services to the Partnership’s partners
pursuant to the terms of the Advisory Agreement as described in Note 12.
Note 2: Summary of Significant Accounting Policies
A. Basis of Presentation – The accompanying consolidated financial statements of the Partnership have been
presented on the fair value basis of accounting in conformity with accounting principles generally accepted in
the United States of America. The consolidated financial statements of Partnership include wholly owned
entities, and those real estate partnerships in which the Partnership has a controlling interest. All significant
inter-company balances and transactions have been eliminated in consolidation.
B. Management’s Use of Estimates in the Financial Statements - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those estimates.
B-7 Real Property