Stagecoach Flex - Prudential Annuities

SELECTED FINANCIAL DATA (dollars in thousands)The following table summarizes information with respect to the operations of the Company:For the Year Ended December 31,2002 2001 2000 1999 1998STATEMENTS OF INCOME DATARevenues:Annuity and life insurance charges and $ 370,004 $ 388,696 $ 424,578 $ 289,989 $ 186,211fees (a) (b)Fee income (b) 97,650 111,196 130,610 83,243 50,839Net investment income 19,632 20,126 18,595 11,477 11,130Net realized capital (losses) gains andother revenues (e) (7,438) 2,698 4,195 3,688 1,360Total revenues $ 479,848 $ 522,716 $ 577,978 $ 388,397 $ 249,540Benefits and Expenses:Annuity and life insurance benefits $ 3,391 $ 1,955 $ 751 $ 612 $ 558Change in annuity and life insurancepolicy reserves (c) 2,741 (39,898) 49,339 (671) 1,053Guaranteed minimum death benefitclaims, net of hedge (b) 23,256 20,370 2,618 4,785 -Return credited to contract owners 5,196 5,796 8,463 (1,639) (8,930)Underwriting, acquisition and otherinsurance expenses 188,728 196,755 150,597 125,434 86,306Amortization of deferred acquisitioncosts (b) (d) 510,059 224,047 184,616 83,861 86,628Interest expense 14,544 73,424 85,998 69,502 41,004Total benefits and expenses $ 747,915 $ 482,449 $ 482,382 $ 281,884 $ 206,619Income tax (benefit) expense $ (102,810) $ 7,168 $ 30,779 $ 30,344 $ 8,154Net (loss) income $ (165,257) $ 33,099 $ 64,817 $ 76,169 $ 34,767STATEMENTS OF FINANCIALCONDITION DATATotal assets (b) $ 23,708,585 $ 28,009,782 $ 31,702,705 $ 30,881,579 $ 18,848,273Future fees payable to parent $ 708,249 $ 799,472 $ 934,410 $ 576,034 $ 368,978Surplus notes $ 110,000 $ 144,000 $ 159,000 $ 179,000 $ 193,000Shareholder’s equity $ 683,061 $ 577,668 $ 496,911 $ 359,434 $ 250,417a. On annuity and life insurance sales of $3,472,044, $3,834,167, $8,216,167, $6,862,968, and $4,159,662, during the years ended December 31,2002, 2001, 2000, 1999, and 1998, respectively, with contract owner assets under management of $21,894,636, $26,017,847, $29,751,822,$29,396,693, and $17,854,761, as of December 31, 2002, 2001, 2000, 1999, and 1998, respectively.b. These items are significantly impacted by equity market volatility.c. For the year ended December 31, 2000, change in annuity and life insurance policy reserves reflected increases to those reserves for guaranteedminimum death benefit (“GMDB”) exposure. For the year ended December 31, 2001, the Company changed certain of its assumptions related toits GMDB exposure resulting in a benefit to operations. See Results of Operations in Management’s Discussion and Analysis of FinancialCondition and Results of Operations (“MD&A”) for a further discussion.d. During the year ended December 31, 2002, the Company recorded an acceleration of amortization of $206,000 against the deferred acquisition costasset. See the MD&A for a further discussion.e. Net realized capital (losses) gains and other revenues include $5,845 of net realized capital losses on sales of securities during 2002 and an otherthan temporary impairment charge of $3,769 recorded during 2002 on the Company’s equity securities.Contract described herein is no longer available for sale.A-2