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 10: Leasing Activity
The Partnership leases space to tenants under various operating lease agreements. These agreements, without giving effect to
renewal options, have expiration dates ranging from January 1, 2009 to March 31, 2025. At December 31, 2008, the aggregate
future minimum base rental payments under non-cancelable operating leases for wholly owned and consolidated joint venture
properties by year are as follows:
Year Ending December 31,
(in 000's)
2009 $ 12,990
2010 11,774
2011 9,239
2012 6,833
2013 5,387
Thereafter 21,735
Total $ 67,958
Note 11: Commitments and Contingencies
In 1986, Prudential committed to fund up to $100 million to enable the Partnership to acquire real estate investments.
Contributions to the Partnership under this commitment have been utilized for property acquisitions, and were to be returned to
Prudential on an ongoing basis from contract owners’ net contributions and other available cash. The amount of the commitment
has been reduced by $10 million for every $100 million in current value net assets of the Partnership. As of December 31, 2008,
the cost basis of Prudential’s equity interest in the Partnership under this commitment (held through the Real Property Accounts)
was $44.2 million. Prudential terminated this commitment on December 31, 2002.
The Partnership is subject to various legal proceedings and claims arising in the ordinary course of business. These matters are
generally covered by insurance. In the opinion of Partnership's management, the outcome of such matters will not have a
significant effect on the financial position of the Partnership.
Note 12: Related Party Transactions
Pursuant to an investment management agreement, PIM charges the Partnership a daily investment management fee at an annual
rate of 1.25% of the average daily gross asset valuation of the Partnership. For the years ended December 31, 2008, 2007 and
2006 management fees incurred by the Partnership were $3.4 million, $3.4 million and $3.1 million, for each of the years,
respectively. The Partnership also reimburses PIM for certain administrative services rendered by PIM. The amounts incurred
for the years ended December 31, 2008, 2007, and 2006 were $53,630, $53,630 and $146,930; respectively, and are classified as
administrative expenses in the Consolidated Statements of Operations.
During the years ended December 31, 2008, 2007 and 2006, the Partnership made the following distributions to the Partners:
Year Ended December 31,
(000's)
2008 $ -
2007 $ -
2006 $6,000
B-17 Real Property