The Prudential Series Fund

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Pruco Life Insurance Company Notes to Consolidated Financial Statements 3. INVESTMENTS (continued) Net investment (losses) on investments arising during the period (325,480) - - 113,648 (211,832) Reclassification adjustment for (losses) included in net income (50,380) - - 17,633 (32,747) Impact of net unrealized investment gains on deferred policy acquisition costs - 264,616 - (92,616) 172,000 Impact of net unrealized investment gains on policyholders’ account balances - - (126,068) 44,124 (81,944) Balance, December 31, 2008 $ (331,900) $ 239,597 $ (115,710) $ 70,726 $ (137,287) The table below presents net unrealized gains/(losses) on investments by asset class at December 31, 2008 2007 2006 (in thousands) Fixed maturities, available for sale $ (321,364) $ 39,782 $ 60,760 Other long term investments ( 10,536) 4,178 3,254 Unrealized gains/losses on investments $ (331,900) $ 43,960 $ 64,014 Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, as of December 31, 2008 and 2007 respectively: Fixed maturities, available for sale: 2008 Less than twelve months Fair Value Unrealized Losses Twelve months or more Fair Unrealized Value Losses (in thousands) Fair Value Total Unrealized Losses U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 22,796 $ 101 $ - $ - $ 22,796 $ 101 Obligations of U.S. States, and political subdivisions 23,989 352 23,989 352 Foreign government bonds 4,891 204 - - 4,891 204 Corporate securities 1,467,078 154,683 258,113 75,471 1,725,191 230,154 Residential mortgage-backed securities 13,575 1,446 9,732 2,422 23,307 3,868 Commercial mortgage-backed securities 321,414 55,557 111,996 32,630 433,410 88,187 Asset-backed securities 425,154 54,640 111,181 28,602 536,335 83,242 Total fixed maturities, available for sale $2,278,897 $266,983 $491,022 $139,125 $2,769,919 $ 406,108 Equity Securities, available for sale: 2008 $ 15,842 $ 11,154 - - $ 15,842 $ 11,154 Fixed maturities, available for sale: 2007 U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 122,706 $ - $ 350 $ - $ 123,056 $ - Obligations of U.S. States, and political subdivisions 118,724 11 2,557 113 121,281 124 Foreign government bonds 40,632 - - - 40,632 - Corporate securities 2,096,194 11,824 343,673 9,937 2,439,867 21,761 Residential mortgage-backed securities 529,566 60 20,489 420 550,055 480 B-18
Pruco Life Insurance Company Notes to Consolidated Financial Statements 3. INVESTMENTS (continued) Commercial mortgage-backed securities 499,449 696 7,448 4 506,897 700 Asset-backed securities 477,664 18,395 165,002 4,272 642,666 22,667 Total fixed maturities, available for sale $3,884,935 $ 30,986 $539,519 $ 14,746 $4,424,454 $ 45,732 Equity securities, available for sale: 2007 $ 28,035 $ 2 - - $ 28,035 $ 2 As of December 31, 2008, unrealized gains (losses) on fixed maturities and equity securities was comprised of $417 million of gross unrealized losses and $85 million of gross unrealized gains. Gross unrealized losses includes $139 million of gross losses that have been in such a position for twelve months or greater. Based on a review of the above information in conjunction with other factors as outlined in our policy surrounding other than temporary impairments (see Note 2 to the Consolidated Financial Statements), we have concluded that an adjustment for other than temporary impairments for these securities was not warranted at December 31, 2008. Each security is current on its contractual payments, and a detailed analysis of the underlying credit resulted in the determination that there is no evidence of probable credit deterioration that would indicate they would be unable to meet their contractual obligations. The declines in fair value were primarily due to credit spread widening and increased liquidity discounts. In each case, the Company has the ability and intent to hold the security for a period of time to allow for a recovery of value. As of December 31, 2007, unrealized gains (losses) on fixed maturities and equity securities was comprised of $46 million of gross unrealized losses and $85 million of gross unrealized gains. Gross unrealized losses includes $15 million of gross losses that have been in such a position for twelve months or greater. Based on a review of the above information in conjunction with other factors as outlined in our policy surrounding other than temporary impairments (see Note 2 to the Consolidated Financial Statements), we have concluded that an adjustment for other than temporary impairments for these securities was not warranted at December 31, 2007. Each security is current on its contractual payments, and a detailed analysis of the underlying credit resulted in the determination that there is no evidence of probable credit deterioration that would indicate they would be unable to meet their contractual obligations. The declines in fair value were primarily due to credit spread widening and increased liquidity discounts. In each case, the Company has the ability and intent to hold the security for a period of time to allow for a recovery of value. Securities Pledged, Restricted Assets and Special Deposits The Company pledges investment securities it owns to unaffiliated parties through certain transactions including securities lending, securities sold under agreements to repurchase, and futures contracts. At December 31, 2008 and 2007, the carrying value of fixed maturities available for sale pledged to third parties as reported in the Consolidated Statements of Financial Position were $152 million and $408 million, respectively. Fixed maturities of $4 million at December 31, 2008 and 2007 were on deposit with governmental authorities or trustees as required by certain insurance laws. 4. DEFERRED POLICY ACQUISITION COSTS The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows: 2008 2007 2006 (in thousands) Balance, beginning of year $2,174,315 $1,959,431 $ 1,663,003 Capitalization of commissions, sales and issue expenses 471,771 490,422 383,410 Amortization (308,617) (285,443) (76,436) Change in unrealized investment gains/(losses) 264,616 13,071 (10,546) Impact of adoption of SOP 05-1 - (3,166) - Balance, end of year $2,602,085 $2,174,315 $ 1,959,431 Deferred acquisition costs include reductions in capitalization and amortization related to the reinsurance expense allowances resulting from the coinsurance treaty with Prudential Reinsurance Captive Company or ―PARCC,‖ discussed in Note 13 to the Consolidated Financial Statements. Ceded capitalization in the above table amounted to $126 million, $123 million and $85 million in 2008, 2007 and 2006 respectively. Amortization amounted to $22 million, $16 million and $16 million in 2008, 2007 and 2006 respectively. B-19
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MAY 1, 2009 PROSPECTUS The Prudenti
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THE PRUDENTIAL SERIES FUND Diversif
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THE PRUDENTIAL SERIES FUND Natural
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This prospectus discusses the follo
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INTRODUCTION ABOUT THE FUND AND ITS
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■ prepayment risk The Portfolio i
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■ ■ ■ ■ ■ ■ ■ ■ ■
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a representative sample of the stoc
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PRINCIPAL RISKS Although we try to
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Foreign investment risk. Investing
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Market risk. Market risk is the ris
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guaranteeing the obligation for ult
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PAST PERFORMANCE Conservative Balan
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Equity Portfolio Annual Returns (Cl
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Global Portfolio Annual Returns (Cl
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High Yield Bond Portfolio Annual Re
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Money Market Portfolio Annual Retur
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Small Capitalization Stock Portfoli
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Value Portfolio Annual Returns (Cla
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EXAMPLE The following Example, whic
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and are considered speculative. We
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can’t guarantee success, and it i
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■ ■ Repurchase agreements. The
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Government Income Portfolio The inv
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The Portfolio may also invest in ob
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unrated, of comparable quality in o
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■ Illiquid securities The Portfol
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MORE DETAILED INFORMATION ABOUT OTH
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are not backed by the full faith an
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HOW THE FUND IS MANAGED BOARD OF TR
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trading, asset management and priva
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Equity Portfolio Spiros “Sig” S
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Richard Piccirillo is Principal and
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Natural Resources Portfolio David A
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HOW TO BUY AND SELL SHARES OF THE P
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(which is generally 4:00 p.m. New Y
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DISTRIBUTOR Prudential Investment M
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FINANCIAL HIGHLIGHTS INTRODUCTION T
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Equity Portfolio Class I Year Ended
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High Yield Bond Portfolio Year Ende
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Small Capitalization Stock Portfoli
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INVESTOR INFORMATION SERVICES: Shar
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TABLE OF CONTENTS Page PER SHARE IN
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PER SHARE INVESTMENT INCOME, CAPITA
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Summary of Charges The Partnership
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Partnership. PREI's investment staf
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would be willing to commit to a fir
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The investment manager will manage
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4. Risks with Sale-Leaseback Transa
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If an account which has been alloca
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correspondingly adjusted. In additi
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RESTRICTIONS ON CONTRACT OWNERS’
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During the year ended December 31,
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Page 145 and 146: Pruco Life Insurance Company Notes
Page 157: Pruco Life Insurance Company Notes
Page 185 and 186: Many Prudential Financial companies
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The Prudential Series Fund

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