Exhibit 99.2
SUPPLEMENTAL FINANCIAL INFORMATION
The following document contains supplemental quarterly statistical financial information for the quarter ended September 30, 2003. This document is dated October 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. Certain reclassifications have been made in the previously reported financial information to make the prior period amounts comparable to those of the current period. Such reclassifications had no effect on previously reported net income, total assets, or share-owners’ equity.
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PROTECTIVE LIFE CORPORATION Draft
Quarterly Financial Highlights 10/28/2003
(Dollars in Thousands) Page 1
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
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Pretax Operating Income *
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Life Marketing $40,458 $36,725 $30,635 $46,116 $39,501 $88,825 $116,252
Acquisitions 25,118 26,441 22,772 24,281 24,831 68,656 71,884
Annuities 2,683 3,034 3,715 2,991 2,633 12,660 9,339
Stable Value Contracts 11,423 11,334 9,138 10,098 9,523 30,938 28,759
Asset Protection (2,112) (31,995) 858 (16,913) 4,015 8,617 (12,040)
Corporate & Other (694) 3,592 1,344 4,113 (6,752) 2,051 (1,295)
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Total Pretax Operating Income $76,876 $49,131 $68,462 $70,686 $73,751 $211,747 $212,899
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Balance Sheet Data
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Total GAAP Assets $21,369,140 $21,904,581 $22,748,452 $23,287,560 $23,295,984
Share Owners' Equity $1,723,168 $1,720,702 $1,810,480 $2,026,445 $1,965,756
Share Owners' Equity (excluding accumulated other comprehensive income) $1,462,608 $1,484,788 $1,513,566 $1,564,910 $1,606,569
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Stock Data
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Closing Price $ 30.77 $ 27.52 $ 28.55 $ 26.75 $ 29.85 $ 30.77 $ 29.85
Average Shares Outstanding
Basic 69,948,982 69,959,056 69,956,505 70,004,109 70,091,080 69,912,126 70,017,724
Diluted 70,491,409 70,488,160 70,483,448 70,561,795 70,722,885 70,454,250 70,590,253
* "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".
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PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Statements Of Income 10/29/2003
(Dollars in thousands) Page 2
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
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REVENUES
Gross Premiums and Policy Fees $ 392,131 $ 415,172 $ 382,256 $ 392,082 $ 434,998 $1,146,545 $1,209,336
Reinsurance Ceded (121,744) (252,657) (184,854) (199,905) (247,922) (498,739) (632,681)
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Net Premiums and Policy Fees 270,387 162,515 197,402 192,177 187,076 647,806 576,655
Net investment income 263,066 271,443 260,560 265,217 251,539 759,761 777,316
RIGL - Derivatives (981) (4,209) (10,514) (1,551) (13,834) 9,445 (25,899)
RIGL - All Other Investments 2,106 (985) (1,178) 29,524 27,042 1,895 55,388
Other income 23,927 21,432 25,309 39,981 26,128 78,764 91,418
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Total Revenues 558,505 450,196 471,579 525,348 477,951 1,497,671 1,474,878
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BENEFITS & EXPENSES
Benefits and settlement expenses 305,952 293,601 296,998 304,726 282,175 873,484 883,899
Amortization of deferred policy acquisition costs 112,021 53,495 55,759 64,803 56,241 214,167 176,803
Amortization of goodwill - - - - - - -
Other operating expenses 56,191 52,355 55,297 58,697 51,872 169,885 165,866
Interest on indebtedness 6,705 7,105 7,486 7,830 8,871 18,732 24,187
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Total Benefits and Expenses 480,869 406,556 415,540 436,056 399,159 1,276,268 1,250,755
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INCOME BEFORE INCOME TAX 77,636 43,640 56,039 89,292 78,792 221,403 224,123
Income tax expense 26,661 13,296 18,334 29,916 26,383 74,392 74,633
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NET INCOME $ 50,975 $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 147,011 $ 149,490
=================================================================================== ==============================
PER SHARE DATA FOR QUARTER
Operating income-diluted * $ 0.72 $ 0.48 $ 0.65 $ 0.67 $ 0.70
RIGL - Derivatives - (0.04) (0.10) (0.01) (0.13)
RIGL - All Other Investments 0.01 (0.01) (0.02) 0.19 0.17
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Net income-diluted $ 0.73 $ 0.43 $ 0.53 $ 0.85 $ 0.74
Average shares outstanding-diluted 70,491,409 70,488,160 70,483,448 70,561,795 70,722,885
Dividends paid $ 0.15 $ 0.15 $ 0.15 $ 0.16 $ 0.16
PER SHARE DATA FOR YTD
Operating income-diluted * $ 2.00 $ 2.48 $ 0.65 $ 1.32 $ 2.02 $ 2.00 $ 2.02
RIGL - Derivatives 0.09 0.05 (0.10) (0.11) (0.24) 0.09 (0.24)
RIGL - All Other Investments - (0.01) (0.02) 0.17 0.34 - 0.34
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Net income-diluted $ 2.09 $ 2.52 $ 0.53 $ 1.38 $ 2.12 $ 2.09 $ 2.12
Average shares outstanding-diluted 70,454,250 70,462,797 70,483,448 70,522,838 70,590,253 70,454,250 70,590,253
Dividends paid $ 0.44 $ 0.59 $ 0.15 $ 0.31 $ 0.47 $ 0.44 $ 0.47
* "Operating Income" is a non-GAAP financial measure. "Net Income" is a GAAP financial measure to which "Operating Income" may be compared.
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PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Balance Sheets 10/29/2003
(Dollars in thousands) Page 3
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR
2002 2002 2003 2003 2003
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ASSETS
Fixed maturities $11,451,339 $11,664,065 $12,146,120 $12,504,655 $12,452,180
Equity securities 70,326 64,523 55,416 56,248 52,460
Mortgage loans 2,591,417 2,518,152 2,483,630 2,543,013 2,678,360
Investment real estate 20,536 20,711 19,485 16,930 16,781
Policy loans 546,302 543,161 536,085 532,981 523,869
Other long-term investments 176,443 222,490 227,554 258,897 246,177
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Long-term investments 14,856,363 15,033,102 15,468,290 15,912,724 15,969,827
Short-term investments 455,494 448,399 912,999 804,923 582,830
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Total investments 15,311,857 15,481,501 16,381,289 16,717,647 16,552,657
Cash 78,353 101,953 55,830 91,093 105,019
Accrued investment income 190,908 181,966 196,107 185,300 194,115
Accounts and premiums receivable 74,207 61,425 63,186 63,464 55,879
Reinsurance receivable 2,280,223 2,368,068 2,402,371 2,270,817 2,299,140
Deferred policy acquisition costs 1,644,367 1,678,723 1,703,410 1,727,076 1,815,071
Goodwill 47,312 47,312 47,312 47,312 47,312
Property and equipment, net 41,615 41,324 44,279 46,392 45,663
Other assets 183,273 309,791 282,602 278,554 214,499
Assets Related to Separate Accounts
Variable Annuity 1,412,028 1,513,824 1,452,098 1,718,478 1,813,738
Variable Universal Life 100,781 114,364 115,591 137,027 148,511
Other 4,216 4,330 4,377 4,400 4,380
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TOTAL ASSETS $21,369,140 $21,904,581 $22,748,452 $23,287,560 $23,295,984
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LIABILITIES AND SHARE-OWNERS' EQUITY
LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims $8,032,378 $8,219,652 $8,416,509 $8,626,989 $8,752,643
Unearned premiums 790,360 875,956 848,457 782,440 786,396
Stable value product deposits 3,860,241 4,018,552 4,106,685 4,214,470 4,135,212
Annuity deposits 3,680,025 3,697,495 3,714,368 3,636,423 3,538,368
Other policyholders' funds 134,771 174,140 172,849 164,840 160,946
Securities sold under repurchase agreements 42,000 - - - 111,725
Other liabilities 648,697 697,578 1,175,568 969,069 901,997
Accrued income taxes 23,219 3,186 24,911 (19,843) (43,155)
Deferred income taxes 250,023 242,593 264,342 374,306 362,991
Debt 376,137 406,110 426,103 436,394 440,344
Trust Originated Preferred Securities 290,000 215,000 215,000 215,000 215,000
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Total guaranteed preferred beneficial interests 290,000 215,000 215,000 215,000 215,000
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Minority interest - subsidiaries 1,096 1,099 1,114 1,122 1,131
Liabilities related to separate accounts
Variable annuity 1,412,028 1,513,824 1,452,098 1,718,478 1,813,738
Variable universal life 100,781 114,364 115,591 137,027 148,511
Other 4,216 4,330 4,377 4,400 4,380
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TOTAL LIABILITIES $19,645,972 $20,183,879 $20,937,972 $21,261,115 $21,330,227
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SHARE-OWNERS' EQUITY
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Preferred stock - - - - -
Common stock 36,626 36,626 36,626 36,626 36,626
Additional paid-in capital 406,000 408,397 409,007 412,282 412,368
Treasury stock (16,402) (16,402) (15,631) (15,578) (15,558)
Stock Held in Trust (2,157) (2,417) (2,812) (3,149) (2,979)
Unallocated ESOP shares (2,777) (2,777) (2,367) (2,367) (2,367)
Retained earnings 1,041,318 1,061,361 1,088,743 1,137,096 1,178,479
Accumulated other comprehensive income 260,560 235,914 296,914 461,535 359,187
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Total Share-owners' Equity 1,723,168 1,720,702 1,810,480 2,026,445 1,965,756
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TOTAL LIABILITIES AND EQUITY $21,369,140 $21,904,581 $22,748,452 $23,287,560 $23,295,983
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SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity $ 25.09 $ 25.06 $ 26.28 $ 29.41 $ 28.53
Excluding accumulated other comprehensive income $ 21.30 $ 21.62 $ 21.97 $ 22.71 $ 23.31
Share-owners' Equity (excluding accumulated other comprehensive income) $1,462,608 $1,484,788 $1,513,566 $1,564,910 $1,606,569
Common shares outstanding 68,675,894 68,675,894 68,891,149 68,907,294 68,912,705
Treasury Stock Shares 4,576,066 4,576,066 4,360,811 4,344,666 4,339,255
PROTECTIVE LIFE CORPORATION Draft
Calculation of Operating Earnings Per Share 10/29/2003
(Dollars in thousands) Page 4
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
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CALCULATION OF NET INCOME PER SHARE
Net income $ 50,975 $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 147,011 $ 149,490
Average shares outstanding-basic 69,948,982 69,959,056 69,956,505 70,004,109 70,091,080 69,912,126 70,017,724
Average shares outstanding-diluted 70,491,409 70,488,160 70,483,448 70,561,795 70,722,885 70,454,250 70,590,253
Net income per share-basic $ 0.73 $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 2.10 $ 2.14
Net income per share-diluted $ 0.73 $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 2.09 $ 2.12
Income from continuing operations $ 50,975 $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 147,011 $ 149,490
Change in accounting principle/extraordinary loss - - - - - - -
EPS (basic) $ 0.73 $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 2.10 $ 2.14
EPS (diluted) 0.73 0.43 0.53 0.85 0.74 2.09 2.12
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
RIGL - Derivatives $ (981) $ (4,209) $ (10,514) $ (1,551) $ (13,834) $ 9,445 $ (25,899)
RIGL - All Other Investments 2,106 (985) (1,178) 29,524 27,042 1,895 55,388
Related amortization of DAC (365) (297) (731) (9,367) (8,167) (1,684) (18,265)
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760 (5,491) (12,423) 18,606 5,041 9,656 11,224
Tax effect (266) 1,922 4,348 (6,512) (1,764) (3,380) (3,928)
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$ 494 $ (3,569) $ (8,075) $ 12,094 $ 3,277 $ 6,276 $ 7,296
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RIGL - Derivatives per share-diluted $ - $ (0.04) $ (0.10) $ (0.01) $ (0.13) $ 0.09 $ (0.24)
RIGL - All Other Investments per share-diluted $ 0.01 $ (0.01) $ (0.02) $ 0.19 $ 0.17 $ - $ 0.34
OPERATING INCOME PER SHARE
Net income per share-diluted $ 0.73 $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 2.09 $ 2.12
RIGL - Derivatives per share-diluted - (0.04) (0.10) (0.01) (0.13) 0.09 (0.24)
RIGL - All Other Investments per share-diluted 0.01 (0.01) (0.02) 0.19 0.17 - 0.34
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Operating income per share-diluted $ 0.72 $ 0.48 $ 0.65 $ 0.67 $ 0.70 $ 2.00 $ 2.02
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NET OPERATING INCOME *
Net income $ 50,975 $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 147,011 $ 149,490
RIGL - Derivatives net of tax (638) (2,736) (6,834) (1,008) (8,992) 6,139 (16,834)
RIGL - All Other Investments net of tax and amortization 1,132 (833) (1,241) 13,102 12,269 137 24,130
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Net operating income $ 50,481 $ 33,913 $ 45,780 $ 47,282 $ 49,132 $ 140,735 $ 142,194
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PRETAX OPERATING INCOME **
Income before income tax $ 77,636 $ 43,640 $ 56,039 $ 89,292 $ 78,792 $ 221,403 $ 224,123
RIGL - Derivatives (981) (4,209) (10,514) (1,551) (13,834) 9,445 (25,899)
RIGL - All Other Investments 2,106 (985) (1,178) 29,524 27,042 1,895 55,388
Related amortization of DAC (365) (297) (731) (9,367) (8,167) (1,684) (18,265)
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Pretax operating income $ 76,876 $ 49,131 $ 68,462 $ 70,686 $ 73,751 $ 211,747 $ 212,899
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* "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
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PROTECTIVE LIFE CORPORATION Draft
Invested Asset Summary 10/29/2003
(Dollars in millions) Page 5
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR
2002 2002 2003 2003 2003
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Total Portfolio
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Fixed Income $11,451.4 $11,664.0 $12,146.1 $12,504.7 $12,452.2
Mortgage Loans 2,591.4 2,518.2 2,483.6 2,543.0 2,678.4
Real Estate 20.5 20.7 19.5 16.9 16.8
Equities 70.3 64.5 55.4 56.2 52.4
Policy Loans 546.3 543.2 536.1 533.0 523.9
Short Term Investments 455.5 448.4 913.0 804.9 582.8
Other Long Term Investments 176.5 222.5 227.6 258.9 246.2
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Total Invested Assets $15,311.9 $15,481.5 $16,381.3 $16,717.6 $16,552.7
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Fixed Income
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Corporate Bonds $5,792.6 $5,911.4 $6,082.8 $6,620.5 $6,516.6
Mortgage Backed Securities 4,319.0 4,339.0 4,546.8 4,248.9 4,307.2
US Govt Bonds 123.2 96.5 92.6 95.2 90.8
Public Utilities 1,120.6 1,173.4 1,282.3 1,420.3 1,414.2
States, Municipals and Political Subdivisions 19.8 29.4 25.8 23.6 27.3
Preferred Securities 2.2 1.8 1.8 2.1 0.7
Convertibles and Bonds with Warrants 74.0 112.5 114.0 94.1 95.4
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Total Fixed Income Portfolio $11,451.4 $11,664.0 $12,146.1 $12,504.7 $12,452.2
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Fixed Income - Quality
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AAA 38.1% 37.7% 37.7% 34.3% 34.9%
AA 5.3% 5.1% 4.9% 5.1% 5.7%
A 23.0% 22.0% 21.8% 22.2% 22.8%
BBB 28.3% 27.7% 27.5% 28.9% 28.3%
BB or Less 5.2% 7.4% 8.0% 9.5% 8.3%
Redeemable Preferred Stock 0.1% 0.1% 0.1% 0.0% 0.0%
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100.0% 100.0% 100.0% 100.0% 100.0%
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Mortgage Loans - Type
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Retail 76.4% 76.2% 75.7% 76.0% 74.2%
Apartments 8.7% 7.5% 7.2% 7.2% 8.0%
Office Buildings 6.7% 7.4% 7.8% 7.2% 8.4%
Warehouses 6.9% 7.4% 7.5% 7.9% 7.9%
Miscellaneous 1.3% 1.5% 1.8% 1.7% 1.5%
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100.0% 100.0% 100.0% 100.0% 100.0%
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Problem Mortgage Loans
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90 Days Past Due $9.6 $1.9 $1.2 $5.2 $7.3
Renegotiated Loans 5.9 5.7 5.7 5.7 5.7
Foreclosures 9.8 13 11.7 8.9 8.8
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$25.3 $20.6 $18.6 $19.8 $21.8
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PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities - Quarterly Earnings Trends 10/29/2003
(Dollars in thousands) Page 6
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
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INDIVIDUAL LIFE
REVENUES
Gross Premiums and Policy Fees $116,775 $126,273 $123,430 $131,580 $158,256 $339,019 $ 413,266
Reinsurance Ceded (12,655) (107,043) (75,660) (85,517) (121,066) (169,280) (282,243)
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Net Premiums and Policy Fees 104,120 19,230 47,770 46,063 37,190 169,739 131,023
Net investment income 21,452 21,907 22,389 22,674 24,195 65,330 69,258
Realized investment gains (losses) - - - - - - -
Other income 13,409 13,277 13,972 16,972 13,613 42,659 44,557
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Total Revenues 138,981 54,414 84,131 85,709 74,998 277,728 244,838
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BENEFITS & EXPENSES
Benefits and settlement expenses 28,810 21,908 40,283 29,952 35,464 94,993 105,699
Amortization of deferred policy acquisition costs 72,551 7,749 15,237 11,609 5,643 92,121 32,489
Amortization of goodwill - - - - - - -
Other operating expenses 8,376 5,291 11,739 12,218 12,704 34,838 36,661
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Total Benefits and Expenses 109,737 34,948 67,259 53,779 53,811 221,952 174,849
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INCOME BEFORE INCOME TAX $29,244 $19,466 $16,872 $31,930 $21,187 $55,776 $ 69,989
================================================================= ===========================
WEST COAST
REVENUES
Gross Premiums and Policy Fees $48,127 $72,944 $58,279 $64,663 $71,562 $135,176 $ 194,504
Reinsurance Ceded (39,304) (71,083) (43,815) (51,021) (56,566) (105,822) (151,402)
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Net Premiums and Policy Fees 8,823 1,861 14,464 13,642 14,996 29,354 43,102
Net investment income 31,103 32,767 34,149 34,841 34,504 88,998 103,494
Realized investment gains (losses) - - - - - - -
Other income 101 335 - 9 (43) 101 (34)
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Total Revenues 40,027 34,963 48,613 48,492 49,457 118,453 146,562
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BENEFITS & EXPENSES
Benefits and settlement expenses 28,554 25,061 34,664 31,717 33,559 86,262 99,940
Amortization of deferred policy acquisition costs 3,670 5,569 5,647 7,424 7,145 12,397 20,216
Amortization of goodwill - - - - - - -
Other operating expenses (3,411) (12,926) (5,461) (4,835) (9,561) (13,255) (19,857)
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Total Benefits and Expenses 28,813 17,704 34,850 34,306 31,143 85,404 100,299
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INCOME BEFORE INCOME TAX $11,214 $17,259 $13,763 $14,186 $18,314 $33,049 $ 46,263
================================================================= ===========================
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees $79,341 $77,218 $73,063 $71,326 $71,903 $223,600 $ 216,292
Reinsurance Ceded (12,468) (27,973) (18,626) (18,531) (17,573) (48,360) (54,730)
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Net Premiums and Policy Fees 66,873 49,245 54,437 52,795 54,330 175,240 161,562
Net investment income 67,128 67,508 62,296 62,520 61,004 184,639 185,820
Realized investment gains (losses) - - - - - - -
Other income 168 395 905 1,542 (329) 1,241 2,118
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Total Revenues 134,169 117,148 117,638 116,857 115,005 361,120 349,500
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BENEFITS & EXPENSES
Benefits and settlement expenses 83,335 73,802 72,619 72,951 72,500 227,599 218,070
Amortization of deferred policy acquisition costs 11,891 6,648 10,081 8,474 7,817 28,597 26,372
Amortization of goodwill - - - - - - -
Other operating expenses 13,825 10,257 12,166 11,151 9,857 36,268 33,174
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Total Benefits and Expenses 109,051 90,707 94,866 92,576 90,174 292,464 277,616
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INCOME BEFORE INCOME TAX $25,118 $26,441 $22,772 $24,281 $24,831 $68,656 $ 71,884
================================================================= ===========================
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities 10/29/2003
(Dollars in thousands) Page 7
(Unaudited)
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3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
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INDIVIDUAL LIFE
SALES BY PRODUCT
Term $ 19,536 $ 19,652 $ 21,904 $ 32,718 $ 35,168 $ 61,198 $ 89,790
U/L 7,372 8,929 8,288 9,440 10,489 20,176 28,217
VUL 1,683 1,605 876 1,105 1,245 5,095 3,226
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Total $ 28,591 $ 30,186 $ 31,068 $ 43,263 $ 46,902 $ 86,469 $ 121,233
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SALES BY DISTRIBUTION
RSM System $ 9,673 $ 10,335 $ 10,301 $ 12,180 $ 12,917 $ 28,863 $ 35,398
Empire General 10,978 12,026 14,307 22,672 26,081 35,100 63,060
Stockbrokers 5,079 4,887 4,500 6,746 6,634 13,273 17,880
Direct Response 2,756 2,567 1,950 1,665 1,272 8,936 4,887
All Other 105 371 10 0 (2) 297 8
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Total $ 28,591 $ 30,186 $ 31,068 $ 43,263 $ 46,902 $ 86,469 $ 121,233
---------------------------------------------------------------------------- ------------------------------
WEST COAST
SALES BY PRODUCT
Term $ 16,033 $ 19,305 $ 19,306 $ 20,276 $ 21,204 $ 46,125 $ 60,786
U/L 8,348 14,493 7,627 11,004 9,609 27,559 28,240
---------------------------------------------------------------------------- ------------------------------
Total $ 24,381 $ 33,798 $ 26,933 $ 31,280 $ 30,813 $ 73,684 $ 89,026
---------------------------------------------------------------------------- ------------------------------
SALES BY DISTRIBUTION
BGA $ 21,233 $ 22,781 $ 22,420 $ 24,362 $ 26,346 $ 61,897 $ 73,128
BOLI 3,148 11,017 4,513 6,918 4,467 11,787 15,898
---------------------------------------------------------------------------- ------------------------------
Total $ 24,381 $ 33,798 $ 26,933 $ 31,280 $ 30,813 $ 73,684 $ 89,026
---------------------------------------------------------------------------- ------------------------------
ANNUITIES
SALES
Variable Annuity $ 96,902 $ 78,348 $ 102,525 $ 94,336 $ 87,459 $ 246,159 $ 284,320
Immediate Annuity 24,499 22,934 26,839 26,092 12,709 77,275 65,640
Fixed Annuity 83,371 50,156 49,529 21,326 3,239 478,002 74,094
---------------------------------------------------------------------------- ------------------------------
Total $ 204,772 $ 151,438 $ 178,893 $ 141,754 $ 103,407 $ 801,436 $ 424,054
---------------------------------------------------------------------------- ------------------------------
EARNINGS BEFORE INCOME TAX
Variable Annuity $ (1,167) $ (318) $ (211) $ (123) $ 232 $ 1,177 $ (102)
Fixed Annuity 3,850 3,352 3,926 3,114 2,401 11,483 9,441
---------------------------------------------------------------------------- ------------------------------
Total $ 2,683 $ 3,034 $ 3,715 $ 2,991 $ 2,633 $ 12,660 $ 9,339
---------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE
VA Fixed Annuity $ 311,977 $ 321,586 $ 363,741 $ 357,937 $ 334,644 $ 311,977 $ 334,644
VA Sep Acct Annuity 1,296,572 1,397,586 1,366,633 1,611,964 1,714,999 1,296,572 1,714,999
---------------------------------------------------------------------------- ------------------------------
Sub-total 1,608,549 1,719,172 1,730,374 1,969,901 2,049,643 1,608,549 2,049,643
Fixed Annuity 2,928,945 2,986,596 3,005,278 2,989,964 2,904,016 2,928,945 2,904,016
---------------------------------------------------------------------------- ------------------------------
Total $4,537,494 $4,705,768 $4,735,652 $4,959,865 $4,953,659 $4,537,494 $4,953,659
---------------------------------------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Acquisitions, Stable Value Contracts, and Asset Protection 10/29/2003
Quarterly Earnings Trends (Dollars in thousands) Page 8
(Unaudited)
- --------------------------------------------------------------------------------
----------------------------------------------------------------- ---------------------------
3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
----------------------------------------------------------------- ---------------------------
ANNUITIES
REVENUES
Gross Premiums and Policy Fees $ 6,415 $ 5,962 $ 5,883 $ 6,387 $ 6,864 $19,864 $ 19,134
Reinsurance Ceded - - - - - - -
----------------------------------------------------------------- ---------------------------
Net Premiums and Policy Fees 6,415 5,962 5,883 6,387 6,864 19,864 19,134
Net investment income 56,759 58,223 58,442 57,780 54,660 162,224 170,882
RIGL - All Other Investments 363 (1,324) 27 11,206 8,582 3,601 19,815
Other income 2,060 1,922 1,941 2,075 2,368 6,954 6,384
----------------------------------------------------------------- ---------------------------
Total Revenues 65,597 64,783 66,293 77,448 72,474 192,643 216,215
----------------------------------------------------------------- ---------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 48,466 50,193 52,986 51,339 48,385 135,914 152,710
Amortization of deferred policy acquisition costs 5,734 5,258 4,386 13,967 13,508 19,411 31,861
Amortization of goodwill - - - - - - -
Other operating expenses 8,716 7,919 5,910 7,312 7,533 22,741 20,755
----------------------------------------------------------------- ---------------------------
Total Benefits and Expenses 62,916 63,370 63,282 72,618 69,426 178,066 205,326
----------------------------------------------------------------- ---------------------------
INCOME BEFORE INCOME TAX 2,681 1,413 3,011 4,830 3,048 14,577 10,889
Adjustments to Reconcile to Operating Income:
Less: RIGL - All Other Investments 363 (1,324) 27 11,206 8,582 3,601 19,815
Add back: Related amortization of deferred policy acquisition costs 365 297 731 9,367 8,167 1,684 18,265
----------------------------------------------------------------- ---------------------------
PRETAX OPERATING INCOME * $ 2,683 $ 3,034 $ 3,715 $ 2,991 $ 2,633 $12,660 $ 9,339
================================================================= ===========================
STABLE VALUE CONTRACTS
REVENUES
Gross Premiums and Policy Fees $ - $ - $ - $ - $ - $ - $ -
Reinsurance Ceded - - - - - - -
----------------------------------------------------------------- ---------------------------
Net Premiums and Policy Fees - - - - - - -
Net investment income 61,725 62,840 58,532 59,090 56,441 183,258 174,063
RIGL - Derivatives (2,338) 1,363 (661) 940 523 (5,436) 802
RIGL - All Other Investments (4,028) (2,314) (6,041) 3,320 9,222 (674) 6,501
Other income - - - - - - -
----------------------------------------------------------------- ---------------------------
Total Revenues 55,359 61,889 51,830 63,350 66,186 177,148 181,366
----------------------------------------------------------------- ---------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 48,290 49,375 47,765 46,957 45,374 147,201 140,096
Amortization of deferred policy acquisition costs 581 563 599 519 542 1,741 1,660
Amortization of goodwill - - - - - - -
Other operating expenses 1,431 1,568 1,030 1,516 1,002 3,378 3,548
----------------------------------------------------------------- ---------------------------
Total Benefits and Expenses 50,302 51,506 49,394 48,992 46,918 152,320 145,304
----------------------------------------------------------------- ---------------------------
INCOME BEFORE INCOME TAX 5,057 10,383 2,436 14,358 19,268 24,828 36,062
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives (2,338) 1,363 (661) 940 523 (5,436) 802
Less: RIGL-All Other Investments (4,028) (2,314) (6,041) 3,320 9,222 (674) 6,501
----------------------------------------------------------------- ---------------------------
PRETAX OPERATING INCOME * $11,423 $11,334 $ 9,138 $10,098 $ 9,523 $30,938 $ 28,759
================================================================= ===========================
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees $127,534 $119,972 $110,409 $108,775 $117,437 $386,332 $ 336,621
Reinsurance Ceded (52,304) (42,694) (44,276) (44,135) (52,234) (159,881) (140,645)
----------------------------------------------------------------- ---------------------------
Net Premiums and Policy Fees 75,230 77,278 66,133 64,640 65,203 226,451 195,976
Net investment income 11,095 10,874 9,834 9,729 10,338 33,422 29,901
Realized investment gains (losses) - - - - - - -
Other income 7,259 4,826 6,971 18,167 8,833 26,041 33,971
----------------------------------------------------------------- ---------------------------
Total Revenues 93,584 92,978 82,938 92,536 84,374 285,914 259,848
----------------------------------------------------------------- ---------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 57,751 66,666 40,398 64,295 39,302 153,675 143,995
Amortization of deferred policy acquisition costs 17,267 27,366 19,479 22,491 21,354 58,763 63,324
Amortization of goodwill - - - - - - -
Other operating expenses 20,678 30,941 22,203 22,663 19,703 64,859 64,569
----------------------------------------------------------------- ---------------------------
Total Benefits and Expenses 95,696 124,973 82,080 109,449 80,359 277,297 271,888
----------------------------------------------------------------- ---------------------------
INCOME BEFORE INCOME TAX $ (2,112) $ (31,995) $ 858 $ (16,913) $ 4,015 $ 8,617 $(12,040)
================================================================= ===========================
* "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 10/29/2003
(Dollar in thousands unless otherwise noted) Page 9
(Unaudited)
---------------------------------------------------------------------------- ------------------------------
3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
---------------------------------------------------------------------------- ------------------------------
STABLE VALUE CONTRACTS
SALES (millions)
GIC $ 92 $ 91 $ 219 $ 30 $ 25 $ 176 $ 274
GFA - 300 225 100 100 588 425
---------------------------------------------------------------------------- ------------------------------
Total $ 92 $ 391 $ 444 $ 130 $ 125 $ 764 $ 699
---------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE (thous)
Total $3,806,275 $3,930,668 $3,999,054 $4,071,061 $4,010,185 $3,806,275 $4,010,185
OPERATING SPREAD 1.17% 1.12% 0.93% 1.01% 0.95% 1.05% 0.96%
---------------------------------------------------------------------------- ------------------------------
3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
---------------------------------------------------------------------------- ------------------------------
ASSET PROTECTION
SALES
Credit $ 48,297 $ 37,990 $ 45,642 $ 51,168 $ 53,418 $ 139,732 $ 150,228
Service Contracts 57,754 40,729 38,709 53,869 59,421 155,074 151,999
Other 31,734 34,627 23,552 30,313 22,601 82,130 76,466
---------------------------------------------------------------------------- ------------------------------
Total $ 137,785 $ 113,346 $ 107,903 $ 135,350 $ 135,440 $ 376,936 $ 378,693
---------------------------------------------------------------------------- ------------------------------
PROTECTIVE LIFE CORPORATION Draft
Corp & Other Segment - Quarterly Earnings Trends 10/29/2003
(Dollars in thousands) Page 10
(Unaudited)
----------------------------------------------------------------- ---------------------------
3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 9 MOS 9 MOS
2002 2002 2003 2003 2003 2002 2003
----------------------------------------------------------------- ---------------------------
REVENUES
Gross Premiums and Policy Fees $13,939 $12,803 $11,192 $ 9,351 $ 8,976 $42,554 $ 29,519
Reinsurance Ceded (5,013) (3,864) (2,477) (701) (483) (15,396) (3,661)
----------------------------------------------------------------- ---------------------------
Net Premiums and Policy Fees 8,926 8,939 8,715 8,650 8,493 27,158 25,858
Net investment income 13,804 17,324 14,918 18,583 10,397 41,890 43,898
Realized investment gains (losses) 0 0 0 0 0 0 0
Other income 930 677 1,520 1,216 1,686 1,768 4,422
----------------------------------------------------------------- ---------------------------
Total Revenues 23,660 26,940 25,153 28,449 20,576 70,816 74,178
----------------------------------------------------------------- ---------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 10,746 6,596 8,283 7,515 7,591 27,840 23,389
Amortization of deferred policy acquisition costs 327 342 330 319 232 1,137 881
Amortization of goodwill 0 0 0 0 0 0 0
Other operating expenses 13,281 16,410 15,196 16,502 19,505 39,788 51,203
----------------------------------------------------------------- ---------------------------
Total Benefits and Expenses 24,354 23,348 23,809 24,336 27,328 68,765 75,473
----------------------------------------------------------------- ---------------------------
INCOME BEFORE INCOME TAX $ (694) $ 3,592 $ 1,344 $ 4,113 $ (6,752) $ 2,051 $ (1,295)
================================================================= ===========================
UNALLOCATED RIGL - DERIVATIVES> $ 1,357 $ (5,572) $ (9,853) $ (2,491) $ (14,357) $14,881 $(26,701)
UNALLOCATED RIGL - ALL OTHER INVESTMENTS 5,771 2,653 4,836 14,998 9,238 (1,032) 29,072