The following document contains supplemental quarterly statistical financial information for the quarter ended March 31, 2003. This document is dated April 30, 2003. Protective does not undertake a duty to update such information after such date.
All per share results are presented on a diluted basis.
Throughout this document, GAAP refers to accounting principles generally accepted in the United States of America. Consolidated and segment operating income excludes net realized investment gains (losses) and the related amortization of deferred policy acquisition costs and gains (losses) on derivative instruments because fluctuations in these items are due to changes in interest rates and other financial market factors instead of mortality and morbidity. Management believes that consolidated and segment operating income (loss) enhances an investor’s and the Company’s understanding of the Company’s results of operations by highlighting the income (loss) attributable to the normal, recurring operations of the Company’s business.
As prescribed by generally accepted accounting principles, certain investments are recorded at their market values with the resulting unrealized gains (losses) reduced by a related adjustment to deferred policy acquisition costs, net of income tax, reported as a component of share-owners’ equity. The market values of fixed maturities increase or decrease as interest rates rise or fall. The Company believes that an insurance company’s share-owners’ equity may be difficult to analyze without disclosing the effects of recording accumulated other comprehensive income, including unrealized gains (losses) on investments.
The sales statistics given in this document are used by the Company to measure the relative progress of its marketing efforts. These statistics and certain other information reported herein were derived from the Company’s various sales tracking and administrative systems and were not derived from the Company’s financial reporting systems or financial statements. These statistics attempt to measure only one of many factors that may affect future business segment profitability, and therefore are not intended to be predictive of future profitability.
PROTECTIVE LIFE CORPORATION DRAFT
QUARTERLY FINANCIAL HIGHLIGHTS 4/29/2003
(DOLLARS IN THOUSANDS) PAGE 1
(UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
PRETAX OPERATING INCOME *
- -----------------------------------------------------------------------------------------------------------------------------------------------------------
Life Marketing $21,512 $26,855 $40,458 $36,725 $30,635 $21,512 $30,635
Annuities 5,009 4,968 2,683 3,034 3,715 5,009 3,715
Acquisitions 23,435 20,103 25,118 26,441 22,772 23,435 22,772
Stable Value Contracts 9,228 10,287 11,423 11,334 9,138 9,228 9,138
Asset Protection 8,106 2,623 (2,112) (31,995) 858 8,106 858
Corporate & Other (1,035) 3,780 (694) 3,592 1,344 (1,035) 1,344
-------------------------------------------------------------------------------- --------------------------------
Total Pretax Operating Income $66,255 $68,616 $76,876 $49,131 $68,462 $66,255 $68,462
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
Balance Sheet Data
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
Total GAAP Assets $20,138,370 $21,016,874 $21,369,140 $21,929,989 $22,774,700
Share Owners' Equity $1,352,799 $1,528,549 $1,723,168 $1,720,702 $1,810,480
Share Owners' Equity (excluding accumulated other comprehensive income) $1,378,196 $1,422,248 $1,462,608 $1,484,788 $1,513,566
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
Stock Data
- ----------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------
Closing Price $ 31.18 $ 33.10 $ 30.77 $ 27.52 $ 28.55 $ 31.18 $ 28.55
Average Shares Outstanding
Basic 69,893,453 69,893,332 69,948,982 69,959,056 69,956,505 69,893,453 69,956,505
Diluted 70,383,580 70,486,576 70,491,409 70,488,160 70,483,448 70,383,580 70,483,448
- -----------------
* "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating Income" may be compared.
See Page 4 for a reconciliation of "Pretax Operating Income" to "Income Before Income Tax".
PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Statements Of Income 4/29/2003
(Dollars in thousands) Page2
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------------------------ -----------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
---------------------------------------------------------------------------------------------- -----------------------------------
REVENUES
Gross Premiums and Policy Fees $ 380,981 $ 385,345 $ 393,902 $ 385,458 $ 388,071 $ 380,981 $ 388,071
Reinsurance Ceded (176,683) (200,312) (121,744) (222,097) (189,417) (176,683) (189,417)
---------------------------------------------------------------------------------------------- -----------------------------------
Net Premiums and Policy Fees 204,298 185,033 272,158 163,361 198,654 204,298 198,654
Net investment income 245,005 251,690 263,066 271,443 260,560 245,005 260,560
Realized investment gains (losses) (3,603) 13,818 1,125 (5,194) (11,692) (3,603) (11,692)
Other income 25,804 29,033 23,927 21,432 25,309 25,804 25,309
---------------------------------------------------------------------------------------------- -----------------------------------
Total Revenues 471,504 479,574 560,276 451,042 472,831 471,504 472,831
---------------------------------------------------------------------------------------------- -----------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 287,048 292,396 307,723 294,447 295,818 287,048 295,818
Amortization of deferred policy acquisition costs 52,404 45,672 110,584 51,108 56,265 52,404 56,265
Amortization of goodwill - - - - - - -
Other operating expenses 63,582 54,182 57,628 54,742 57,223 63,582 57,223
Interest on indebtedness 6,185 5,842 6,705 7,105 7,486 6,185 7,486
---------------------------------------------------------------------------------------------- -----------------------------------
Total Benefits and Expenses 409,219 398,092 482,640 407,402 416,792 409,219 416,792
---------------------------------------------------------------------------------------------- -----------------------------------
INCOME BEFORE INCOME TAX 62,285 81,482 77,636 43,640 56,039 62,285 56,039
Income tax expense 20,679 27,052 26,661 13,296 18,334 20,679 18,334
---------------------------------------------------------------------------------------------- -----------------------------------
NET INCOME $ 41,606 $ 54,430 $ 50,975 $ 30,344 $ 37,705 $ 41,606 $ 37,705
============================================================================================== ===================================
PER SHARE DATA FOR QUARTER
Operating income-diluted * $ 0.63 $ 0.65 $ 0.72 $ 0.48 $ 0.65
Realized investment gains(losses) and related amort (0.04) 0.12 0.01 (0.05) (0.12)
----------------------------------------------------------------------------------------------
Net income-diluted $ 0.59 $ 0.77 $ 0.73 $ 0.43 $ 0.53
Average shares outstanding-diluted 70,383,580 70,486,576 70,491,409 70,488,160 70,483,448
Dividends paid $ 0.14 $ 0.15 $ 0.15 $ 0.15 $ 0.15
PER SHARE DATA FOR YTD
Operating income-diluted * $ 0.63 $ 1.28 $ 2.00 $ 2.48 $ 0.65 $ 0.63 $ 0.65
Realized investment gains(losses) and related amort (0.04) 0.08 0.09 0.04 (0.12) (0.04) (0.12)
---------------------------------------------------------------------------------------------- -----------------------------------
Net income-diluted $ 0.59 $ 1.36 $ 2.09 $ 2.52 $ 0.53 $ 0.59 $ 0.53
Average shares outstanding-diluted 70,383,580 70,435,362 70,454,250 70,462,797 70,483,448 70,383,580 70,483,448
Dividends paid $ 0.14 $ 0.29 $ 0.44 $ 0.59 $ 0.15 $ 0.14 $ 0.15
- --------------------
* "Operating Income" is a non-GAAP financial measure. "Net Income" is a GAAP financial measure to which "Operating Income" may be compared.
PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Balance Sheets 4/29/2003
(Dollars in thousands) Page 3
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR
2002 2002 2002 2002 2003
-----------------------------------------------------------------------------------------------
ASSETS
Fixed maturities $ 10,232,074 $ 11,049,478 $ 11,451,339 $ 11,664,065 $ 12,146,120
Equity securities 78,602 72,908 70,326 64,523 55,416
Mortgage loans 2,552,396 2,600,613 2,591,417 2,518,152 2,483,630
Investment real estate 28,737 24,485 20,536 20,711 19,485
Policy loans 515,412 551,988 546,302 543,161 536,085
Other long-term investments 90,173 150,842 176,443 222,490 227,554
-----------------------------------------------------------------------------------------------
Long-term investments 13,497,394 14,450,314 14,856,363 15,033,102 15,468,290
Short-term investments 145,882 257,526 455,494 448,399 912,999
-----------------------------------------------------------------------------------------------
Total investments 13,643,276 14,707,840 15,311,857 15,481,501 16,381,289
Cash 78,626 43,775 78,353 101,953 55,830
Accrued investment income 165,540 168,408 190,908 181,966 196,107
Accounts and premiums receivable 106,026 100,596 74,207 61,425 63,186
Reinsurance receivable 2,256,827 2,264,199 2,280,223 2,393,476 2,428,282
Deferred policy acquisition costs 1,589,657 1,646,154 1,644,367 1,678,723 1,703,410
Goodwill 47,312 47,312 47,312 47,312 47,312
Property and equipment, net 47,400 45,397 41,615 41,324 44,279
Other assets 201,209 183,676 183,273 309,791 282,939
Assets Related to Separate Accounts
Variable Annuity 1,877,209 1,691,789 1,412,028 1,513,824 1,452,098
Variable Universal Life 121,233 113,570 100,781 114,364 115,591
Other 4,055 4,158 4,216 4,330 4,377
-----------------------------------------------------------------------------------------------
TOTAL ASSETS $ 20,138,370 $ 21,016,874 $ 21,369,140 $ 21,929,989 $ 22,774,700
===============================================================================================
LIABILITIES AND SHARE-OWNERS' EQUITY
LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims $ 7,142,118 $ 7,775,280 $ 8,032,378 $ 8,307,218 $ 8,532,756
Unearned premiums 825,089 812,209 790,360 813,798 792,669
Stable value product deposits 4,082,431 4,078,763 3,860,241 4,018,552 4,106,685
Annuity deposits 3,363,364 3,603,722 3,680,025 3,697,495 3,679,820
Other policyholders' funds 129,783 144,503 134,771 174,140 172,849
Securities sold under repurchase agreements 44,500 - 42,000 - -
Other liabilities 519,279 515,586 648,697 697,578 1,175,451
Accrued income taxes 8,769 (6,490) 23,219 3,186 37,944
Deferred income taxes 104,917 192,384 250,023 242,593 251,763
Debt 386,691 386,688 376,137 406,110 426,103
Trust Originated Preferred Securities 175,000 175,000 290,000 215,000 215,000
-----------------------------------------------------------------------------------------------
Total guaranteed preferred beneficial interests 175,000 175,000 290,000 215,000 215,000
-----------------------------------------------------------------------------------------------
Minority interest - subsidiaries 1,133 1,163 1,096 1,099 1,114
Liabilities related to separate accounts
Variable annuity 1,877,209 1,691,789 1,412,028 1,513,824 1,452,098
Variable universal life 121,233 113,570 100,781 114,364 115,591
Other 4,055 4,158 4,216 4,330 4,377
-----------------------------------------------------------------------------------------------
TOTAL LIABILITIES $ 18,785,571 $ 19,488,325 $ 19,645,972 $ 20,209,287 $ 20,964,220
-----------------------------------------------------------------------------------------------
SHARE-OWNERS' EQUITY
- -------------------------------------------------------------------------
Preferred stock - - - - -
Common stock 36,626 36,626 36,626 36,626 36,626
Additional paid-in capital 405,654 405,711 406,000 408,397 409,007
Treasury stock (16,285) (16,278) (16,402) (16,402) (15,631)
Stock Held in Trust (1,535) (1,679) (2,157) (2,417) (2,812)
Unallocated ESOP shares (2,777) (2,777) (2,777) (2,777) (2,367)
Retained earnings 956,513 1,000,645 1,041,318 1,061,361 1,088,743
Accumulated other comprehensive income (25,397) 106,301 260,560 235,914 296,914
-----------------------------------------------------------------------------------------------
Total Share-owners' Equity 1,352,799 1,528,549 1,723,168 1,720,702 1,810,480
-----------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 20,138,370 $ 21,016,874 $ 21,369,140 $ 21,929,989 $ 22,774,700
===============================================================================================
SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity $ 19.70 $ 22.26 $ 25.09 $ 25.06 $ 26.28
Excluding accumulated other comprehensive income $ 20.07 $ 20.72 $ 21.30 $ 21.62 $ 21.97
Share-owners' Equity (excluding accumulated other comprehensive income) $ 1,378,196 $ 1,422,248 $ 1,462,608 $ 1,484,788 $ 1,513,566
Common shares outstanding 68,655,562 68,657,583 68,675,894 68,675,894 68,891,149
Treasury Stock Shares 4,596,398 4,594,377 4,576,066 4,576,066 4,360,811
Market price of Common Stock $ 31.18 $ 33.10 $ 30.77 $ 27.52 $ 28.55
PROTECTIVE LIFE CORPORATION Draft
Calculation of Operating Earnings Per Share 4/29/2003
(Dollars in thousands) Page 4
(Unaudited)
----------------------------------------------------------------------------------------------- -----------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
----------------------------------------------------------------------------------------------- -----------------------------------
CALCULATION OF NET INCOME PER SHARE
Net income $ 41,606 $ 54,430 $ 50,975 $ 30,344 $ 37,705 $ 41,606 $ 37,705
Average shares outstanding-basic 69,893,453 69,893,332 69,948,982 69,959,056 69,956,505 69,893,453 69,956,505
Average shares outstanding-diluted 70,383,580 70,486,576 70,491,409 70,488,160 70,483,448 70,383,580 70,483,448
Net income per share-basic $ 0.60 $ 0.77 $ 0.73 $ 0.44 $ 0.54 $ 0.60 $ 0.54
Net income per share-diluted $ 0.59 $ 0.77 $ 0.73 $ 0.43 $ 0.53 $ 0.59 $ 0.53
Income from continuing operations $ 41,606 $ 54,430 $ 50,975 $ 31,748 $ 37,705 $ 41,606 $ 37,705
Change in accounting principle/extraordinary loss - - (1,404) - - -
EPS (basic) $ 0.60 $ 0.77 $ 0.73 $ 0.44 $ 0.54 $ 0.60 $ 0.54
EPS (diluted) 0.59 0.77 0.73 0.43 0.53 0.59 0.53
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
Realized investment gains (losses) $ (3,603) $ 13,818 $ 1,125 $ (5,194) $ (11,692) $ (3,603) $ (11,692)
Related amortization of DAC (367) (952) (365) (297) (731) (367) (731)
----------------------------------------------------------------------------------------------- -----------------------------------
(3,970) 12,866 760 (5,491) (12,423) (3,970) (12,423)
Tax effect 1,390 (4,504) (266) 1,922 4,348 1,390 4,348
----------------------------------------------------------------------------------------------- -----------------------------------
$ (2,580) $ 8,362 $ 494 $ (3,569) $ (8,075) $ (2,580) $ (8,075)
----------------------------------------------------------------------------------------------- -----------------------------------
Realized investment gains (losses) per share (basic & diluted) $ (0.04) $ 0.12 $ 0.01 $ (0.05) $ (0.12) $ (0.04) $ (0.12)
----------------------------------------------------------------------------------------------- -----------------------------------
OPERATING INCOME PER SHARE
Net income per share-diluted $ 0.59 $ 0.77 $ 0.73 $ 0.43 $ 0.53 $ 0.59 $ 0.53
Realized investment gains (losses) per share-diluted (0.04) 0.12 0.01 (0.05) (0.12) (0.04) (0.12)
----------------------------------------------------------------------------------------------- -----------------------------------
Operating income per share-diluted $ 0.63 $ 0.65 $ 0.72 $ 0.48 $ 0.65 $ 0.63 $ 0.65
----------------------------------------------------------------------------------------------- -----------------------------------
NET OPERATING INCOME *
Net income $ 41,606 $ 54,430 $ 50,975 $ 30,344 $ 37,705 $ 41,606 $ 37,705
Realized investment gains (losses), net of tax and amortization (2,580) 8,362 494 (3,569) (8,075) (2,580) (8,075)
----------------------------------------------------------------------------------------------- -----------------------------------
Net operating income $ 44,186 $ 46,068 $ 50,481 $ 33,913 $ 45,780 $ 44,186 $ 45,780
----------------------------------------------------------------------------------------------- -----------------------------------
PRETAX OPERATING INCOME **
Income before income tax $ 62,285 $ 81,482 $ 77,636 $ 43,640 $ 56,039 $ 62,285 $ 56,039
Realized investment gains (losses) (3,603) 13,818 1,125 (5,194) (11,692) (3,603) (11,692)
Related amortization of DAC (367) (952) (365) (297) (731) (367) (731)
----------------------------------------------------------------------------------------------- -----------------------------------
Pretax operating income $ 66,255 $ 68,616 $ 76,876 $ 49,131 $ 68,462 $ 66,255 $ 68,462
----------------------------------------------------------------------------------------------- -----------------------------------
* "Net Operating Income" is a non-GAAP financial measure. "Net Income" is a GAAP financial measure to which "Net Operating Income" may be compared.
** "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating
Income" may be compared.
PROTECTIVE LIFE CORPORATION Draft
Invested Asset Summary 4/29/2003
(Dollars in millions) Page 5
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR
2002 2002 2002 2002 2003
---------------------------------------------------------------------
Total Portfolio
- -------------------------------------------------------------------
Fixed Income $10,232.1 $11,049.5 $11,451.4 $11,664.0 $12,146.1
Mortgage Loans 2,552.4 2,600.6 2,591.4 2,518.2 2,483.6
Real Estate 28.7 24.5 20.5 20.7 19.5
Equities 78.6 72.9 70.3 64.5 55.4
Policy Loans 515.4 552.0 546.3 543.2 536.1
Short Term Investments 145.9 257.5 455.5 448.4 913.0
Other Long Term Investments 90.2 150.8 176.5 222.5 227.6
---------------------------------------------------------------------
Total Invested Assets $13,643.3 $14,707.8 $15,311.9 $15,481.5 $16,381.3
Fixed Income
- -------------------------------------------------------------------
Corporate Bonds $4,886.4 $5,421.0 $5,792.6 $5,911.4 $6,082.8
Mortgage Backed Securities 4,168.0 4,286.9 4,319.0 4,339.0 4,546.8
US Govt Bonds 105.6 117.5 123.2 96.5 92.6
Public Utilities 880.0 1,046.4 1,120.6 1,173.4 1,282.3
States, Municipals and Political Subdivisions 97.5 94.7 19.8 29.4 25.8
Preferred Securities 1.6 2.2 2.2 1.8 1.8
Convertibles and Bonds with Warrants 93.0 80.8 74.0 112.5 114.0
---------------------------------------------------------------------
Total Fixed Income Portfolio $10,232.1 $11,049.5 $11,451.4 $11,664.0 $12,146.1
Fixed Income - Quality
- -------------------------------------------------------------------
AAA 40.7% 39.0% 38.1% 37.7% 37.7%
AA 5.2% 5.0% 5.3% 5.1% 4.9%
A 22.6% 23.6% 23.0% 22.0% 21.8%
BBB 27.4% 28.6% 28.3% 27.7% 27.5%
BB or Less 4.0% 3.7% 5.2% 7.4% 8.0%
Redeemable Preferred Stock 0.1% 0.1% 0.1% 0.1% 0.1%
---------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
Mortgage Loans - Type
- -------------------------------------------------------------------
Retail 75.7% 76.4% 76.4% 76.2% 75.7%
Apartments 9.5% 8.3% 8.7% 7.5% 7.2%
Office Buildings 6.7% 7.0% 6.7% 7.4% 7.8%
Warehouses 6.7% 6.9% 6.9% 7.4% 7.5%
Miscellaneous 1.4% 1.4% 1.3% 1.5% 1.8%
---------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
Problem Mortgage Loans
- -------------------------------------------------------------------
90 Days Past Due $1.7 $4.8 $9.6 $1.9 $1.2
Renegotiated Loans 5.9 5.9 5.9 5.7 5.7
Foreclosures 22.2 17.2 9.8 13.0 11.7
---------------------------------------------------------------------
$29.8 $27.9 $25.3 $20.6 $18.6
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities - Quarterly Earnings Trends 4/29/2003
(Dollars in thousands) Page 6
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
---------------------------------------------------------------------------------- -------------------------------------
INDIVIDUAL LIFE
REVENUES
Gross Premiums and Policy Fees $ 109,871 $ 112,373 $ 116,775 $ 126,273 $ 128,268 $ 109,871 $ 128,268
Reinsurance Ceded (71,762) (84,863) (12,655) (107,043) (80,223) (71,762) (80,223)
---------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 38,109 27,510 104,120 19,230 48,045 38,109 48,045
Net investment income 21,814 22,064 21,452 21,907 22,389 21,814 22,389
Realized investment gains (losses) - - - - - - -
Other income 14,443 14,807 13,409 13,277 13,972 14,443 13,972
---------------------------------------------------------------------------------- -------------------------------------
Total Revenues 74,366 64,381 138,981 54,414 84,406 74,366 84,406
---------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 34,988 31,195 28,810 21,908 38,126 34,988 38,126
Amortization of deferred policy acquisition costs 11,984 7,586 72,551 7,749 17,424 11,984 17,424
Amortization of goodwill - - - - - - -
Other operating expenses 16,958 9,504 8,376 5,291 11,984 16,958 11,984
---------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 63,930 48,285 109,737 34,948 67,534 63,930 67,534
---------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX $ 10,436 $ 16,096 $ 29,244 $ 19,466 $ 16,872 $ 10,436 $ 16,872
================================================================================== =====================================
WEST COAST
REVENUES
Gross Premiums and Policy Fees $ 39,551 $ 47,498 $ 48,127 $ 42,384 $ 58,279 $ 39,551 $ 58,279
Reinsurance Ceded (28,253) (38,265) (39,304) (40,523) (43,815) (28,253) (43,815)
---------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 11,298 9,233 8,823 1,861 14,464 11,298 14,464
Net investment income 28,580 29,315 31,103 32,767 34,149 28,580 34,149
Realized investment gains (losses) - - - - - - -
Other income - - 101 335 - - -
---------------------------------------------------------------------------------- -------------------------------------
Total Revenues 39,878 38,548 40,027 34,963 48,613 39,878 48,613
---------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 28,143 29,565 28,554 25,061 34,664 28,143 34,664
Amortization of deferred policy acquisition costs 4,207 4,520 3,670 5,569 5,647 4,207 5,647
Amortization of goodwill - - - - - - -
Other operating expenses (3,548) (6,296) (3,411) (12,926) (5,461) (3,548) (5,461)
---------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 28,802 27,789 28,813 17,704 34,850 28,802 34,850
---------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX $ 11,076 $ 10,759 $ 11,214 $ 17,259 $ 13,763 $ 11,076 $ 13,763
================================================================================== =====================================
ANNUITIES
REVENUES
Gross Premiums and Policy Fees $ 6,609 $ 6,840 $ 6,415 $ 5,962 $ 5,883 $ 6,609 $ 5,883
Reinsurance Ceded - - - - - - -
---------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 6,609 6,840 6,415 5,962 5,883 6,609 5,883
Net investment income 51,953 53,512 56,759 58,223 58,442 51,953 58,442
Realized investment gains (losses) 382 2,856 363 (1,324) 27 382 27
Other income 2,462 2,432 2,060 1,922 1,941 2,462 1,941
---------------------------------------------------------------------------------- -------------------------------------
Total Revenues 61,406 65,640 65,597 64,783 66,293 61,406 66,293
---------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 42,387 45,061 48,466 50,193 52,986 42,387 52,986
Amortization of deferred policy acquisition costs 6,994 6,683 5,734 5,258 4,386 6,994 4,386
Amortization of goodwill - - - - - - -
Other operating expenses 7,001 7,024 8,716 7,919 5,910 7,001 5,910
---------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 56,382 58,768 62,916 63,370 63,282 56,382 63,282
---------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX 5,024 6,872 2,681 1,413 3,011 5,024 3,011
Adjustments to Reconcile to Operating Income:
Realized investment (gains) losses (382) (2,856) (363) 1,324 (27) (382) (27)
Related amortization of deferred policy acquisition costs 367 952 365 297 731 367 731
---------------------------------------------------------------------------------- -------------------------------------
PRETAX OPERATING INCOME * $ 5,009 $ 4,968 $ 2,683 $ 3,034 $ 3,715 $ 5,009 $ 3,715
================================================================------------------ =====================================
* "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating
Income" may be compared.
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities 4/29/2003
(Dollars in thousands) Page 7
(Unaudited) ---------------------------------------------------------------------------------------- ------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
---------------------------------------------------------------------------------------- ------------------------------
INDIVIDUAL LIFE
SALES BY PRODUCT
Term $ 19,251 $ 22,411 $ 19,536 $ 19,652 $ 21,904 $ 19,251 $ 21,904
U/L 5,560 7,244 7,372 8,929 8,288 5,560 8,288
VUL 1,548 1,864 1,683 1,605 876 1,548 876
---------------------------------------------------------------------------------------- ------------------------------
Total $ 26,359 $ 31,519 $ 28,591 $ 30,186 $ 31,068 $ 26,359 $ 31,068
SALES BY DISTRIBUTION
RSM System $ 8,938 $ 10,252 $ 9,673 $ 10,335 $ 10,301 $ 8,938 $ 10,301
Empire General 11,090 13,032 10,978 12,026 14,307 11,090 14,307
Stockbrokers 3,275 4,919 5,079 4,887 4,500 3,275 4,500
Direct Response 2,915 3,265 2,756 2,567 1,950 2,915 1,950
All Other 141 51 105 371 10 141 10
---------------------------------------------------------------------------------------- ------------------------------
Total $ 26,359 $ 31,519 $ 28,591 $ 30,186 $ 31,068 $ 26,359 $ 31,068
---------------------------------------------------------------------------------------- ------------------------------
WEST COAST
SALES BY PRODUCT
Term $ 14,296 $ 15,796 $ 16,033 $ 19,305 $ 19,306 $ 14,296 $ 19,306
U/L 8,343 10,868 8,348 14,493 7,627 8,343 7,627
---------------------------------------------------------------------------------------- ------------------------------
Total $ 22,639 $ 26,664 $ 24,381 $ 33,798 $ 26,933 $ 22,639 $ 26,933
---------------------------------------------------------------------------------------- ------------------------------
SALES BY DISTRIBUTION
BGA $ 18,602 $ 22,062 $ 21,233 $ 22,781 $ 22,420 $ 18,602 $ 22,420
BOLI 4,037 4,602 3,148 11,017 4,513 4,037 4,513
---------------------------------------------------------------------------------------- ------------------------------
Total $ 22,639 $ 26,664 $ 24,381 $ 33,798 $ 26,933 $ 22,639 $ 26,933
---------------------------------------------------------------------------------------- ------------------------------
ANNUITIES
SALES
Variable Annuity $ 65,086 $ 84,171 $ 96,902 $ 78,348 $ 102,525 $ 65,086 $ 102,525
Immediate Annuity 25,044 27,732 24,499 22,934 26,839 25,044 26,839
Fixed Annuity 146,682 247,949 83,371 50,156 49,529 146,682 49,529 ----------------
---------------------------------------------------------------------------------------- ------------------------------
Total $ 236,812 $ 359,852 $ 204,772 $ 151,438 $ 178,893 $ 236,812 $ 178,893
---------------------------------------------------------------------------------------- ------------------------------
EARNINGS BEFORE INCOME TAX
Variable Annuity $ 799 $ 591 $ (253) $ 979 $ 941 $ 799 $ 941
Fixed Annuity 4,210 4,377 2,936 2,055 2,774 4,210 2,774
---------------------------------------------------------------------------------------- ------------------------------
Total $ 5,009 $ 4,968 $ 2,683 $ 3,034 $ 3,715 $ 5,009 $ 3,715
---------------------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE
VA Fixed Annuity $ 219,115 $ 241,886 $ 311,977 $ 321,586 $ 363,741 $ 219,115 $ 363,741
VA Sep Acct Annuity 1,709,029 1,550,547 1,296,572 1,397,586 1,366,633 1,709,029 1,366,633
---------------------------------------------------------------------------------------- ------------------------------
Sub-total 1,928,144 1,792,433 1,608,549 1,719,172 1,730,374 1,928,144 1,730,374
Fixed Annuity 2,588,764 2,841,601 2,928,945 2,986,596 3,005,278 2,588,764 3,005,278
---------------------------------------------------------------------------------------- ------------------------------
Total $ 4,516,908 $ 4,634,034 $ 4,537,494 $4,705,768 $4,735,652 $4,516,908 $4,735,652
---------------------------------------------------------------------------------------- ------------------------------
PROTECTIVE LIFE CORPORATION Draft
Acquisitions, Stable Value Contracts, and Asset Protection 4/29/2003
Quarterly Earnings Trends (Dollars in thousands) Page 8
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
------------------------------------------------------------------------------------- -------------------------------------
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees $ 81,364 $ 74,807 $ 81,112 $ 78,064 $ 74,040 $ 81,364 $ 74,040
Reinsurance Ceded (18,003) (17,889) (12,468) (27,973) (18,626) (18,003) (18,626)
------------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 63,361 56,918 68,644 50,091 55,414 63,361 55,414
Net investment income 58,710 58,801 67,128 67,508 62,296 58,710 62,296
Realized investment gains (losses) - - - - - - -
Other income 549 524 168 395 905 549 905
------------------------------------------------------------------------------------- -------------------------------------
Total Revenues 122,620 116,243 135,940 117,994 118,615 122,620 118,615
------------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 79,244 76,932 85,106 74,648 73,596 79,244 73,596
Amortization of deferred policy acquisition costs 8,909 7,797 11,891 6,648 10,081 8,909 10,081
Amortization of goodwill - - - - - - -
Other operating expenses 11,032 11,411 13,825 10,257 12,166 11,032 12,166
------------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 99,185 96,140 110,822 91,553 95,843 99,185 95,843
------------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX $ 23,435 $ 20,103 $ 25,118 $ 26,441 $ 22,772 $ 23,435 $ 22,772
===================================================================================== =====================================
STABLE VALUE CONTRACTS
REVENUES
Gross Premiums and Policy Fees $ - $ - $ - $ - $ - $ - $ -
Reinsurance Ceded - - - - - - -
------------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees - - - - - - -
Net investment income 59,507 62,026 61,725 62,840 58,532 59,507 58,532
Realized investment gains (losses) 521 (265) (6,366) (951) (6,702) 521 (6,702)
Other income - - - - - - -
------------------------------------------------------------------------------------- -------------------------------------
Total Revenues 60,028 61,761 55,359 61,889 51,830 60,028 51,830
------------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 48,829 50,082 48,290 49,375 47,765 48,829 47,765
Amortization of deferred policy acquisition costs 565 595 581 563 599 565 599
Amortization of goodwill - - - - - - -
Other operating expenses 885 1,062 1,431 1,568 1,030 885 1,030
------------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 50,279 51,739 50,302 51,506 49,394 50,279 49,394
------------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX 9,749 10,022 5,057 10,383 2,436 9,749 2,436
Adjustments to Reconcile to Operating Income:
Realized investment (gains) losses (521) 265 6,366 951 6,702 (521) 6,702
------------------------------------------------------------------------------------- -------------------------------------
PRETAX OPERATING INCOME * $ 9,228 $ 10,287 $ 11,423 $ 11,334 $ 9,138 $ 9,228 $ 9,138
===================================================================================== =====================================
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees $ 130,732 $ 128,066 $ 127,534 $ 119,972 $ 110,409 $ 130,732 $ 110,409
Reinsurance Ceded (55,048) (52,529) (52,304) (42,694) (44,276) (55,048) (44,276)
------------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 75,684 75,537 75,230 77,278 66,133 75,684 66,133
Net investment income 11,314 11,013 11,095 10,874 9,834 11,314 9,834
Realized investment gains (losses) - - - - - - -
Other income 8,316 10,466 7,259 4,826 6,971 8,316 6,971
------------------------------------------------------------------------------------- -------------------------------------
Total Revenues 95,314 97,016 93,584 92,978 82,938 95,314 82,938
------------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 45,452 50,472 57,751 66,666 40,398 45,452 40,398
Amortization of deferred policy acquisition costs 19,304 18,122 15,830 24,979 17,798 19,304 17,798
Amortization of goodwill - - - - - - -
Other operating expenses 22,452 25,799 22,115 33,328 23,884 22,452 23,884
------------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 87,208 94,393 95,696 124,973 82,080 87,208 82,080
------------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX $ 8,106 $ 2,623 $ (2,112) $ (31,995) $ 858 $ 8,106 $ 858
===================================================================================== =====================================
* "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating
Income" may be compared.
PROTECTIVE LIFE CORPORATION Draft
Stable Value Contracts and Asset Protection Data 4/29/2003
(Dollar in thousands unless otherwise noted) Page 9
(Unaudited)
---------------------------------------------------------------------------------------- ------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
---------------------------------------------------------------------------------------- ------------------------------
STABLE VALUE CONTRACTS
SALES (millions)
GIC $ 46 $ 38 $ 92 $ 91 $ 219 $ 46 $ 219
GFA 538 50 - 300 225 538 225
---------------------------------------------------------------------------------------- ------------------------------
Total $ 584 $ 88 $ 92 $ 391 $ 444 $ 584 $ 444
---------------------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE (thous)
Total $ 4,095,823 $ 4,027,910 $ 3,806,275 $3,930,668 $3,999,054 $4,095,823 $3,999,054
OPERATING SPREAD 0.98% 1.02% 1.17% 1.12% 0.93% 0.98% 0.93%
---------------------------------------------------------------------------------------- ------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
---------------------------------------------------------------------------------------- ------------------------------
ASSET PROTECTION
SALES
Credit $ 43,361 $ 48,074 $ 48,297 $ 37,990 $ 45,642 $ 43,361 $ 45,642
Service Contracts 44,891 52,429 57,754 40,729 38,709 44,891 38,709
Other 23,766 26,630 31,734 34,627 23,552 23,766 23,552
---------------------------------------------------------------------------------------- ------------------------------
Total $ 112,018 $ 127,133 $ 137,785 $ 113,346 $ 107,903 $ 112,018 $ 107,903
---------------------------------------------------------------------------------------- ------------------------------
PROTECTIVE LIFE CORPORATION Draft
Corp & Other Segment - Quarterly Earnings Trends 4/29/2003
(Dollars in thousands) Page 10
(Unaudited)
------------------------------------------------------------------------------------- -------------------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 3 MOS 3 MOS
2002 2002 2002 2002 2003 2002 2003
------------------------------------------------------------------------------------- -------------------------------------
REVENUES
Gross Premiums and Policy Fees $ 12,854 $ 15,761 $ 13,939 $ 12,803 $ 11,192 $ 12,854 $ 11,192
Reinsurance Ceded (3,617) (6,766) (5,013) (3,864) (2,477) (3,617) (2,477)
------------------------------------------------------------------------------------- -------------------------------------
Net Premiums and Policy Fees 9,237 8,995 8,926 8,939 8,715 9,237 8,715
Net investment income 13,127 14,959 13,804 17,324 14,918 13,127 14,918
Realized investment gains (losses) 0 0 0 0 0 0 0
Other income 34 804 930 677 1,520 34 1,520
------------------------------------------------------------------------------------- -------------------------------------
Total Revenues 22,398 24,758 23,660 26,940 25,153 22,398 25,153
------------------------------------------------------------------------------------- -------------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 8,005 9,089 10,746 6,596 8,283 8,005 8,283
Amortization of deferred policy acquisition costs 441 369 327 342 330 441 330
Amortization of goodwill 0 0 0 0 0 0 0
Other operating expenses 14,987 11,520 13,281 16,410 15,196 14,987 15,196
------------------------------------------------------------------------------------- -------------------------------------
Total Benefits and Expenses 23,433 20,978 24,354 23,348 23,809 23,433 23,809
------------------------------------------------------------------------------------- -------------------------------------
INCOME BEFORE INCOME TAX $ (1,035) $ 3,780 $ (694) $ 3,592 $ 1,344 $ (1,035) $ 1,344
===================================================================================== =====================================
UNALLOCATED REALIZED INV GAINS (LOSSES) $ (4,506) $ 11,227 $ 7,128 $ (2,919) $ (5,017) $ (4,506) $ (5,017)