Exhibit 99.2
SUPPLEMENTAL FINANCIAL INFORMATION
The following document contains supplemental quarterly statistical financial information for the quarter ended December 31, 2003. This document is dated February 11, 2004. 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 or share-owners’ equity.
- -------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Quarterly Financial Highlights 2/6/2004
(Dollars in Thousands) Page 1
(Unaudited)
- -------------------------------------------------------------------------
------------------------------------------------------------------------------- -------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
------------------------------------------------------------------------------- -------------------------------
- -------------------------------------------------------------------------
Pretax Operating Income *
- -------------------------------------------------------------------------
Life Marketing $36,725 $30,635 $46,116 $39,501 $42,905 $125,550 $159,157
Acquisitions 26,441 22,772 24,281 24,831 23,266 95,097 95,150
Annuities 3,034 3,715 2,991 2,633 4,034 15,694 13,373
Stable Value Contracts 11,334 9,138 10,098 9,523 10,152 42,272 38,911
Asset Protection (31,995) 858 (16,913) 4,015 (720) (23,378) (12,760)
Corporate & Other 3,592 1,344 4,113 (6,752) 2,296 5,643 1,001
------------------------------------------------------------------------------- -------------------------------
Total Pretax Operating Income $49,131 $68,462 $70,686 $73,751 $81,933 $260,878 $294,832
- -------------------------------------------------------------------------
Balance Sheet Data
- -------------------------------------------------------------------------
Total GAAP Assets $21,933,111 $22,748,452 $23,287,560 $23,295,984 $24,573,991
Share Owners' Equity $ 1,720,702 $ 1,810,480 $ 2,026,445 $ 1,965,756 $ 2,002,144
Share Owners' Equity (excluding accumulated other comprehensive income) $ 1,484,788 $ 1,513,566 $ 1,564,910 $ 1,606,569 $ 1,669,559
- -------------------------------------------------------------------------
Stock Data
- -------------------------------------------------------------------------
Closing Price $ 27.52 $ 28.55 $ 26.75 $ 29.85 $ 33.84 $ 27.52 $33.84
Average Shares Outstanding
Basic 69,959,056 69,956,505 70,004,109 70,091,080 70,079,471 69,923,955 70,033,288
Diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034 70,462,797 70,644,642
* "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 2/6/2004
(Dollars in thousands) Page 2
(Unaudited)
- ------------------------------------------------------------------
----------------------------------------------------------------------------------- ------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
----------------------------------------------------------------------------------- ------------------------------
REVENUES
Gross Premiums and Policy Fees $ 415,172 $ 387,094 $ 397,652 $ 424,590 $ 460,976 $ 1,561,717 $ 1,670,312
Reinsurance Ceded (252,657) (189,417) (205,268) (237,996) (301,754) (751,396) (934,435)
----------------------------------------------------------------------------------- ------------------------------
Net Premiums and Policy Fees 162,515 197,677 192,384 186,594 159,222 810,321 735,877
Net investment income 268,731 257,701 262,744 248,915 271,428 1,022,953 1,040,788
RIGL - Derivatives 2,194 (4,880) 4,334 (9,048) 22,144 28,308 12,550
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 910 58,064
Other income 21,432 25,309 39,981 26,128 18,828 100,196 110,246
----------------------------------------------------------------------------------- ------------------------------
Total Revenues 453,887 474,629 528,967 479,631 474,298 1,962,688 1,957,525
----------------------------------------------------------------------------------- ------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 293,601 297,273 304,933 281,693 267,675 1,167,085 1,151,574
Amortization of deferred policy acquisition costs 53,495 55,759 64,803 56,241 48,304 267,662 225,107
Amortization of goodwill - - - - - - -
Other operating expenses 52,355 55,297 58,697 51,872 45,946 222,240 211,812
Interest on indebtedness 10,796 10,261 11,242 11,033 11,084 40,658 43,620
----------------------------------------------------------------------------------- ------------------------------
Total Benefits and Expenses 410,247 418,590 439,675 400,839 373,009 1,697,645 1,632,113
----------------------------------------------------------------------------------- ------------------------------
INCOME BEFORE INCOME TAX 43,640 56,039 89,292 78,792 101,289 265,043 325,412
Income tax expense 13,296 18,334 29,916 26,383 33,729 87,688 108,362
----------------------------------------------------------------------------------- ------------------------------
NET INCOME $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 177,355 $ 217,050
=================================================================================== ==============================
PER SHARE DATA FOR QUARTER
Operating income-diluted * $ 0.48 $ 0.65 $ 0.67 $ 0.70 $ 0.77
RIGL - Derivatives net of gains related to corp debt and investments (0.04) (0.10) (0.01) (0.13) 0.16
RIGL - All Other Investments (0.01) (0.02) 0.19 0.17 0.02
-----------------------------------------------------------------------------------
Net income-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95
Average shares outstanding-diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034
Dividends paid $ 0.15 $ 0.15 $ 0.16 $ 0.16 $ 0.16
PER SHARE DATA FOR YTD
Operating income-diluted * $ 2.48 $ 0.65 $ 1.32 $ 2.02 $ 2.79 $ 2.48 $ 2.79
RIGL - Derivatives net of gains related to corp debt and investments 0.05 (0.10) (0.11) (0.24) (0.08) 0.05 (0.08)
RIGL - All Other Investments (0.01) (0.02) 0.17 0.34 0.36 (0.01) 0.36
----------------------------------------------------------------------------------- ------------------------------
Net income-diluted $ 2.52 $ 0.53 $ 1.38 $ 2.12 $ 3.07 $ 2.52 $ 3.07
Average shares outstanding-diluted 70,462,797 70,483,448 70,522,838 70,590,253 70,644,642 70,462,797 70,644,642
Dividends paid $ 0.59 $ 0.15 $ 0.31 $ 0.47 $ 0.63 $ 0.59 $ 0.63
* "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 2/5/2004
(Dollars in thousands) Page 3
(Unaudited)
- ------------------------------------------------------------------
-----------------------------------------------------------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR
2002 2003 2003 2003 2003
-----------------------------------------------------------------------------------
ASSETS
Fixed maturities $ 11,664,065 $ 12,146,120 $ 12,504,655 $ 12,452,180 $ 13,355,911
Equity securities 64,523 55,416 56,248 52,460 46,731
Mortgage loans 2,518,152 2,483,630 2,543,013 2,678,360 2,733,722
Investment real estate 20,711 19,485 16,930 16,781 18,126
Policy loans 543,161 536,085 532,981 523,869 502,748
Other long-term investments 222,490 227,554 258,897 246,177 249,494
-----------------------------------------------------------------------------------
Long-term investments 15,033,102 15,468,290 15,912,724 15,969,827 16,906,732
Short-term investments 448,399 912,999 804,923 582,830 519,419
-----------------------------------------------------------------------------------
Total investments 15,481,501 16,381,289 16,717,647 16,552,657 17,426,151
Cash 101,953 55,830 91,093 105,019 136,698
Accrued investment income 181,966 196,107 185,300 194,115 189,232
Accounts and premiums receivable 61,425 63,186 63,464 55,879 57,944
Reinsurance receivable 2,368,068 2,402,371 2,270,817 2,299,140 2,350,606
Deferred policy acquisition costs 1,707,253 1,703,410 1,727,076 1,815,071 1,861,020
Goodwill 47,312 47,312 47,312 47,312 47,312
Property and equipment, net 41,324 44,279 46,392 45,663 45,640
Other assets 309,791 282,602 278,554 214,499 238,581
Assets Related to Separate Accounts
Variable Annuity 1,513,824 1,452,098 1,718,478 1,813,738 2,045,038
Variable Universal Life 114,364 115,591 137,027 148,511 171,408
Other 4,330 4,377 4,400 4,380 4,361
-----------------------------------------------------------------------------------
TOTAL ASSETS $ 21,933,111 $ 22,748,452 $ 23,287,560 $ 23,295,984 $ 24,573,991
===================================================================================
LIABILITIES AND SHARE-OWNERS'EQUITY
LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims $ 8,248,182 $ 8,416,509 $ 8,626,989 $ 8,752,643 $ 8,951,610
Unearned premiums 875,956 848,457 782,440 786,396 784,566
Stable value product deposits 4,018,552 4,106,685 4,214,470 4,135,212 4,676,531
Annuity deposits 3,697,495 3,714,368 3,636,423 3,538,368 3,480,577
Other policyholders' funds 174,140 172,849 164,840 160,946 158,875
Securities sold under repurchase agreements - - - 111,725 -
Other liabilities 697,578 1,175,568 969,069 901,997 855,555
Accrued income taxes 3,186 24,911 (19,843) (43,154) (34,261)
Deferred income taxes 242,593 264,342 374,306 362,991 377,990
Debt 406,110 426,103 436,394 440,344 461,329
Liabilities related to FIN-46 - - - - 400,000
Subordinated Debt Securities 215,000 215,000 215,000 215,000 221,650
Minority interest - subsidiaries 1,099 1,114 1,122 1,131 16,618
Liabilities related to separate accounts
Variable annuity 1,513,824 1,452,098 1,718,478 1,813,738 2,045,038
Variable universal life 114,364 115,591 137,027 148,511 171,408
Other 4,330 4,377 4,400 4,380 4,361
-----------------------------------------------------------------------------------
TOTAL LIABILITIES $ 20,212,409 $ 20,937,972 $ 21,261,115 $ 21,330,228 $ 22,571,847
-----------------------------------------------------------------------------------
- ------------------------------------------------------------------
SHARE-OWNERS' EQUITY
- ------------------------------------------------------------------
Preferred stock - - - - -
Common stock 36,626 36,626 36,626 36,626 36,626
Additional paid-in capital 408,397 409,007 412,282 412,368 418,351
Treasury stock (16,402) (15,631) (15,578) (15,558) (15,275)
Stock Held in Trust (2,417) (2,812) (3,149) (2,979) (2,788)
Unallocated ESOP shares (2,777) (2,367) (2,367) (2,367) (2,367)
Retained earnings 1,061,361 1,088,743 1,137,096 1,178,479 1,235,012
Accumulated other comprehensive income 235,914 296,914 461,535 359,187 332,585
-----------------------------------------------------------------------------------
Total Share-owners' Equity 1,720,702 1,810,480 2,026,445 1,965,756 2,002,144
-----------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 21,933,111 $ 22,748,452 $ 23,287,560 $ 23,295,984 $ 24,573,991
===================================================================================
SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity $ 25.06 $ 26.28 $ 29.41 $ 28.53 $ 29.02
Excluding accumulated other comprehensive income $ 21.62 $ 21.97 $ 22.71 $ 23.31 $ 24.20
Share-owners' Equity (excluding accumulated other comprehensive income)$ 1,484,788 $ 1,513,566 $ 1,564,910 $ 1,606,569 $ 1,669,559
Common shares outstanding 68,675,894 68,891,149 68,907,294 68,912,705 68,991,701
Treasury Stock Shares 4,576,066 4,360,811 4,344,666 4,339,255 4,260,259
PROTECTIVE LIFE CORPORATION Draft
Calculation of Operating Earnings Per Share 2/5/2004
(Dollars in thousands) Page 4
(Unaudited)
----------------------------------------------------------------------------------- ------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
----------------------------------------------------------------------------------- ------------------------------
CALCULATION OF NET INCOME PER SHARE
Net income $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 177,355 $ 217,050
Average shares outstanding-basic 69,959,056 69,956,505 70,004,109 70,091,080 70,079,471 69,923,955 70,033,288
Average shares outstanding-diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034 70,462,797 70,644,642
Net income per share-basic $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 2.54 $ 3.10
Net income per share-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 2.52 $ 3.07
Income from continuing operations $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 177,355 $ 217,050
EPS (basic) $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 2.54 $ 3.10
EPS (diluted) 0.43 0.53 0.85 0.74 0.95 2.52 3.07
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
RIGL - Derivatives $ 2,194 $ (4,880) $ 4,334 $ (9,048) $ 22,144 $ 28,308 $ 12,550
Derivative Gains related to Corporate Debt and Investments (6,403) (5,634) (5,885) (4,786) (4,782) (23,072) (21,087)
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 910 58,064
Related amortization of DAC (297) (731) (9,367) (8,167) (682) (1,981) (18,947)
----------------------------------------------------------------------------------- ------------------------------
(5,491) (12,423) 18,606 5,041 19,356 4,165 30,580
Tax effect 1,922 4,348 (6,512) (1,764) (6,775) (1,458) (10,703)
----------------------------------------------------------------------------------- ------------------------------
$ (3,569) $ (8,075) $ 12,094 $ 3,277 $ 12,581 $ 2,707 $ 19,877
----------------------------------------------------------------------------------- ------------------------------
RIGL - Derivatives per share-diluted $ (0.04) $ (0.10) $ (0.01) $ (0.13) $ 0.16 $ 0.05 $(0.08)
RIGL - All Other Investments per share-diluted $ (0.01) $ (0.02) $ 0.19 $ 0.17 $ 0.02 $ (0.01) $ 0.36
OPERATING INCOME PER SHARE
Net income per share-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 2.52 $ 3.07
RIGL - Derivatives per share-diluted (0.04) (0.10) (0.01) (0.13) 0.16 0.05 (0.08)
RIGL - All Other Investments per share-diluted (0.01) (0.02) 0.19 0.17 0.02 (0.01) 0.36
----------------------------------------------------------------------------------- ------------------------------
Operating income per share-diluted $ 0.48 $ 0.65 $ 0.67 $ 0.70 $ 0.77 $ 2.48 $ 2.79
----------------------------------------------------------------------------------- ------------------------------
NET OPERATING INCOME *
Net income $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 177,355 $ 217,050
RIGL - Derivatives net of tax & gains related to corp debt & investments (2,736) (6,834) (1,008) (8,992) 11,285 3,403 (5,549)
RIGL - All Other Investments net of tax and amortization (833) (1,241) 13,102 12,269 1,296 (696) 25,426
----------------------------------------------------------------------------------- ------------------------------
Net operating income $ 33,913 $ 45,780 $ 47,282 $ 49,132 $ 54,979 $ 174,648 $ 197,173
----------------------------------------------------------------------------------- ------------------------------
PRETAX OPERATING INCOME **
Income before income tax $ 43,640 $ 56,039 $ 89,292 $ 78,792 $ 101,289 $ 265,043 $ 325,412
RIGL - Derivatives 2,194 (4,880) 4,334 (9,048) 22,144 28,308 12,550
Derivative Gains related to Corporate Debt and Investments (6,403) (5,634) (5,885) (4,786) (4,782) (23,072) (21,087)
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 910 58,064
Related amortization of DAC (297) (731) (9,367) (8,167) (682) (1,981) (18,947)
----------------------------------------------------------------------------------- ------------------------------
Pretax operating income $ 49,131 $ 68,462 $ 70,686 $ 73,751 $ 81,933 $ 260,878 $ 294,832
----------------------------------------------------------------------------------- ------------------------------
* "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 2/10/2004
(Dollars in millions) Page 5
(Unaudited)
- -------------------------------------------------------------------
---------------------------------------------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR
2002 2003 2003 2003 2003
---------------------------------------------------------------------
- -------------------------------------------------------------------
Total Portfolio
- -------------------------------------------------------------------
Fixed Income $11,664.0 $12,146.1 $12,504.7 $12,452.2 $13,355.9
Mortgage Loans 2,518.2 2,483.6 2,543.0 2,678.4 2,733.7
Real Estate 20.7 19.5 16.9 16.8 18.1
Equities 64.5 55.4 56.2 52.4 46.7
Policy Loans 543.2 536.1 533.0 523.9 502.8
Short Term Investments 448.4 913.0 804.9 582.8 519.4
Other Long Term Investments 222.5 227.6 258.9 246.2 249.5
---------------------------------------------------------------------
Total Invested Assets $15,481.5 $16,381.3 $16,717.6 $16,552.7 $17,426.1
- -------------------------------------------------------------------
Fixed Income
- -------------------------------------------------------------------
Corporate Bonds $ 5,911.4 $ 6,082.8 $ 6,620.5 $ 6,516.6 $ 6,882.0
Mortgage Backed Securities 4,339.0 4,546.8 4,248.9 4,307.2 4,782.6
US Govt Bonds 96.5 92.6 95.2 90.8 90.2
Public Utilities 1,173.4 1,282.3 1,420.3 1,414.2 1,526.9
States, Municipals and Political Subdivisions 29.4 25.8 23.6 27.3 27.1
Preferred Securities 1.8 1.8 2.1 0.7 3.2
Convertibles and Bonds with Warrants 112.5 114.0 94.1 95.4 43.9
---------------------------------------------------------------------
Total Fixed Income Portfolio $11,664.0 $12,146.1 $12,504.7 $12,452.2 $13,355.9
- -------------------------------------------------------------------
Fixed Income - Quality
- -------------------------------------------------------------------
AAA 37.7% 37.7% 34.3% 34.9% 36.9%
AA 5.1% 4.9% 5.1% 5.7% 5.9%
A 22.0% 21.8% 22.2% 22.8% 22.9%
BBB 27.7% 27.5% 28.9% 28.3% 26.8%
BB or Less 7.4% 8.0% 9.5% 8.3% 7.5%
Redeemable Preferred Stock 0.1% 0.1% 0.0% 0.0% 0.0%
---------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------
Mortgage Loans - Type
- -------------------------------------------------------------------
Retail 76.2% 75.7% 76.0% 74.2% 74.7%
Apartments 7.5% 7.2% 7.2% 8.0% 7.9%
Office Buildings 7.4% 7.8% 7.2% 8.4% 8.0%
Warehouses 7.4% 7.5% 7.9% 7.9% 8.0%
Miscellaneous 1.5% 1.8% 1.7% 1.5% 1.4%
---------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------
Problem Mortgage Loans
- -------------------------------------------------------------------
90 Days Past Due $ 1.9 $ 1.2 $ 5.2 $ 7.3 $ 1.3
Renegotiated Loans 5.7 5.7 5.7 5.7 5.7
Foreclosures 13 11.7 8.9 8.8 9.9
---------------------------------------------------------------------
$20.6 $18.6 $19.8 $21.8 $16.9
- --------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities - Quarterly Earnings Trends 2/5/2004
(Dollars in thousands) Page 6
(Unaudited)
- --------------------------------------------------------------------------
------------------------------------------------------------------ --------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
------------------------------------------------------------------ --------------------------
INDIVIDUAL LIFE
REVENUES
Gross Premiums and Policy Fees $ 126,273 $ 128,268 $ 137,150 $ 147,848 $ 156,051 $ 465,292 $ 569,317
Reinsurance Ceded (107,043) (80,223) (90,880) (111,140) (135,537) (276,323) (417,780)
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 19,230 48,045 46,270 36,708 20,514 188,969 151,537
Net investment income 21,907 22,389 22,674 24,195 23,256 87,237 92,514
Realized investment gains (losses) - - - - - - -
Other income 13,277 13,972 16,972 13,613 15,239 55,936 59,796
------------------------------------------------------------------ --------------------------
Total Revenues 54,414 84,406 85,916 74,516 59,009 332,142 303,847
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 21,908 40,558 30,159 34,982 23,111 116,901 128,810
Amortization of deferred policy acquisition costs 7,749 15,237 11,609 5,643 4,254 99,870 36,743
Amortization of goodwill - - - - - - -
Other operating expenses 5,291 11,739 12,218 12,704 8,736 40,129 45,397
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 34,948 67,534 53,986 53,329 36,101 256,900 210,950
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX $ 19,466 $ 16,872 $ 31,930 $ 21,187 $ 22,908 $ 75,242 $ 92,897
================================================================== ==========================
WEST COAST
REVENUES
Gross Premiums and Policy Fees $ 72,944 $ 58,279 $ 64,663 $ 71,562 $ 92,610 $ 208,120 $ 287,114
Reinsurance Ceded (71,083) (43,815) (51,021) (56,566) (88,596) (176,905) (239,998)
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 1,861 14,464 13,642 14,996 4,014 31,215 47,116
Net investment income 32,767 34,149 34,841 34,504 35,230 121,765 138,724
Realized investment gains (losses) - - - - - - -
Other income 335 - 9 (43) 199 436 165
------------------------------------------------------------------ --------------------------
Total Revenues 34,963 48,613 48,492 49,457 39,443 153,416 186,005
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 25,061 34,664 31,717 33,559 25,035 111,323 124,975
Amortization of deferred policy acquisition costs 5,569 5,647 7,424 7,145 9,119 17,966 29,335
Amortization of goodwill - - - - - - -
Other operating expenses (12,926) (5,461) (4,835) (9,561) (14,708) (26,181) (34,565)
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 17,704 34,850 34,306 31,143 19,446 103,108 119,745
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX $ 17,259 $ 13,763 $ 14,186 $ 18,314 $ 19,997 $ 50,308 $ 66,260
================================================================== ==========================
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees $ 77,218 $ 73,063 $ 71,326 $ 71,903 $ 73,614 $ 300,818 $289,906
Reinsurance Ceded (27,973) (18,626) (18,531) (17,573) (21,264) (76,333) (75,994)
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 49,245 54,437 52,795 54,330 52,350 224,485 213,912
Net investment income 67,508 62,296 62,520 61,004 60,323 252,147 246,143
Realized investment gains (losses) - - - - - - -
Other income 395 905 1,542 (329) 522 1,636 2,640
------------------------------------------------------------------ --------------------------
Total Revenues 117,148 117,638 116,857 115,005 113,195 478,268 462,695
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 73,802 72,619 72,951 72,500 73,698 301,401 291,768
Amortization of deferred policy acquisition costs 6,648 10,081 8,474 7,817 6,318 35,245 32,690
Amortization of goodwill - - - - - - -
Other operating expenses 10,257 12,166 11,151 9,857 9,913 46,525 43,087
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 90,707 94,866 92,576 90,174 89,929 383,171 367,545
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX $ 26,441 $ 22,772 $ 24,281 $ 24,831 $ 23,266 $ 95,097 $ 95,150
================================================================== ==========================
- --------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Acquisitions, Stable Value Contracts, and Asset Protection 2/5/2004
Quarterly Earnings Trends (Dollars in thousands) Page 8
(Unaudited)
- --------------------------------------------------------------------------
------------------------------------------------------------------ --------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
------------------------------------------------------------------ --------------------------
ANNUITIES
REVENUES
Gross Premiums and Policy Fees $ 5,962 $ 5,883 $ 6,387 $ 6,864 $ 7,131 $ 25,826 $ 26,265
Reinsurance Ceded - - - - - - -
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 5,962 5,883 6,387 6,864 7,131 25,826 26,265
Net investment income 58,223 58,442 57,780 54,660 53,450 220,447 224,332
RIGL - All Other Investments (1,324) 27 11,206 8,582 2,918 2,277 22,733
Other income 1,922 1,941 2,075 2,368 2,361 8,876 8,745
------------------------------------------------------------------ --------------------------
Total Revenues 64,783 66,293 77,448 72,474 65,860 257,426 282,075
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 50,193 52,986 51,339 48,385 45,245 186,107 197,955
Amortization of deferred policy acquisition costs 5,258 4,386 13,967 13,508 6,335 24,669 38,196
Amortization of goodwill - - - - - - -
Other operating expenses 7,919 5,910 7,312 7,533 8,010 30,660 28,765
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 63,370 63,282 72,618 69,426 59,590 241,436 264,916
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX 1,413 3,011 4,830 3,048 6,270 15,990 17,159
Adjustments to Reconcile to Operating Income:
Less: RIGL - All Other Investments (1,324) 27 11,206 8,582 2,918 2,277 22,733
Add back: Related amortization of deferred policy acquisition costs 297 731 9,367 8,167 682 1,981 18,947
------------------------------------------------------------------ --------------------------
PRETAX OPERATING INCOME * $ 3,034 $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 15,694 $ 13,373
================================================================== ==========================
STABLE VALUE CONTRACTS
REVENUES
Gross Premiums and Policy Fees $ - $ - $ - $ - $ - $ - $ -
Reinsurance Ceded - - - - - - -
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees - - - - - - -
Net investment income 62,840 58,532 59,090 56,441 59,041 246,098 233,104
RIGL - Derivatives 1,363 (661) 940 523 173 (4,073) 975
RIGL - All Other Investments (2,314) (6,041) 3,320 9,222 2,280 (2,988) 8,781
Other income - - - - - - -
------------------------------------------------------------------ --------------------------
Total Revenues 61,889 51,830 63,350 66,186 61,494 239,037 242,860
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 49,375 47,765 46,957 45,374 46,469 196,576 186,565
Amortization of deferred policy acquisition costs 563 599 519 542 619 2,304 2,279
Amortization of goodwill - - - - - - -
Other operating expenses 1,568 1,030 1,516 1,002 1,801 4,946 5,349
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 51,506 49,394 48,992 46,918 48,889 203,826 194,193
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX 10,383 2,436 14,358 19,268 12,605 35,211 48,667
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives 1,363 (661) 940 523 173 (4,073) 975
Less: RIGL-All Other Investments (2,314) (6,041) 3,320 9,222 2,280 (2,988) 8,781
------------------------------------------------------------------ --------------------------
PRETAX OPERATING INCOME * $ 11,334 $ 9,138 $ 10,098 $ 9,523 $ 10,152 $ 42,272 $ 38,911
================================================================== ==========================
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees $ 119,972 $ 110,409 $ 108,775 $ 117,437 $ 122,958 $ 506,304 $ 459,579
Reinsurance Ceded (42,694) (44,276) (44,135) (52,234) (56,213) (202,575) (196,858)
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 77,278 66,133 64,640 65,203 66,745 303,729 262,721
Net investment income 10,874 9,834 9,729 10,338 9,300 44,296 39,201
Realized investment gains (losses) - - - - - - -
Other income 4,826 6,971 18,167 8,833 8,267 30,867 42,238
------------------------------------------------------------------ --------------------------
Total Revenues 92,978 82,938 92,536 84,374 84,312 378,892 344,160
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 66,666 40,398 64,295 39,302 45,986 220,341 189,981
Amortization of deferred policy acquisition costs 27,366 19,479 22,491 21,354 21,329 86,129 84,653
Amortization of goodwill - - - - - - -
Other operating expenses 30,941 22,203 22,663 19,703 17,717 95,800 82,286
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 124,973 82,080 109,449 80,359 85,032 402,270 356,920
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX $ (31,995) $ 858 $ (16,913) $ 4,015 $ (720) $(23,378) $ (12,760)
================================================================== ==========================
* "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
Corp & Other Segment - Quarterly Earnings Trends 2/5/2004
(Dollars in thousands) Page 10
(Unaudited)
------------------------------------------------------------------ --------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
------------------------------------------------------------------ --------------------------
REVENUES
Gross Premiums and Policy Fees $ 12,803 $ 11,192 $ 9,351 $ 8,976 $ 8,612 $ 55,357 $ 38,131
Reinsurance Ceded (3,864) (2,477) (701) (483) (144) (19,260) (3,805)
------------------------------------------------------------------ --------------------------
Net Premiums and Policy Fees 8,939 8,715 8,650 8,493 8,468 36,097 34,326
Net investment income 14,612 12,059 16,110 7,773 30,828 50,963 66,770
RIGL - Derivatives 831 (4,219) 3,394 (9,571) 21,971 32,381 11,575
RIGL - All Other Investments 2,653 4,836 14,998 9,238 (2,522) 1,621 26,550
Other income 677 1,520 1,216 1,686 (7,760) 2,445 (3,338)
------------------------------------------------------------------ --------------------------
Total Revenues 27,712 22,911 44,368 17,619 50,985 123,507 135,883
------------------------------------------------------------------ --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 6,596 8,283 7,515 7,591 8,131 34,436 31,520
Amortization of deferred policy acquisition costs 342 330 319 232 330 1,479 1,211
Amortization of goodwill 0 0 0 0 0 0 0
Other operating expenses 20,101 17,971 19,914 21,667 25,561 71,019 85,113
------------------------------------------------------------------ --------------------------
Total Benefits and Expenses 27,039 26,584 27,748 29,490 34,022 106,934 117,844
------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAX $ 673 $ (3,673) $ 16,620 $ (11,871) $ 16,963 $ 16,573 $ 18,039
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives 831 (4,219) 3,394 (9,571) 21,971 32,381 11,575
Less: RIGL-All Other Investments 2,653 4,836 14,998 9,238 (2,522) 1,621 26,550
Add back: Derivative Gains related to Corporate Debt and Investments 6,403 5,634 5,885 4,786 4,782 23,072 21,087
------------------------------------------------------------------ --------------------------
PRETAX OPERATING INCOME * $ 3,592 $ 1,344 $ 4,113 $ (6,752) $ 2,296 $ 5,643 $ 1,001
================================================================== ==========================
* "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 2/5/2004
(Dollars in thousands) Page 7
(Unaudited)
---------------------------------------------------------------------------- -------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
---------------------------------------------------------------------------- -------------------------------
INDIVIDUAL LIFE
SALES BY PRODUCT
Term $ 19,652 $ 21,904 $ 32,718 $ 35,168 $ 30,666 $ 80,850 $ 120,456
U/L 8,600 8,609 9,642 10,824 11,619 29,105 40,694
VUL 1,605 876 1,105 1,245 1,332 6,700 4,558
---------------------------------------------------------------------------- -------------------------------
Total $ 29,857 $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 116,655 $ 165,708
---------------------------------------------------------------------------- -------------------------------
SALES BY DISTRIBUTION
RSM System $ 10,006 $ 10,622 $ 12,382 $ 13,252 $ 13,951 $ 39,198 $ 50,207
Empire General 12,026 14,307 22,672 26,081 21,678 47,126 84,738
Stockbrokers 4,887 4,500 6,746 6,634 7,053 18,160 24,933
Direct Response 2,567 1,950 1,665 1,272 936 11,503 5,823
All Other 371 10 0 (2) (1) 668 7
---------------------------------------------------------------------------- -------------------------------
Total $ 29,857 $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 116,655 $ 165,708
---------------------------------------------------------------------------- -------------------------------
WEST COAST
SALES BY PRODUCT
Term $ 19,305 $ 19,306 $ 20,276 $ 21,204 $ 24,093 $ 65,430 $ 84,879
U/L 14,493 7,627 11,004 9,274 11,153 42,052 39,058
---------------------------------------------------------------------------- -------------------------------
Total $ 33,798 $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 107,482 $ 123,937
---------------------------------------------------------------------------- -------------------------------
SALES BY DISTRIBUTION
BGA $ 22,781 $ 22,420 $ 24,362 $ 26,346 $ 28,845 $ 84,678 $ 101,973
BOLI 11,017 4,513 6,918 4,132 6,401 22,804 21,964
---------------------------------------------------------------------------- -------------------------------
Total $ 33,798 $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 107,482 $ 123,937
---------------------------------------------------------------------------- -------------------------------
ANNUITIES
SALES
Variable Annuity $ 78,348 $ 102,525 $ 94,336 $ 87,459 $ 66,270 $ 324,507 $ 350,590
Immediate Annuity 22,934 26,839 26,092 12,709 16,379 100,209 82,019
Fixed Annuity 50,156 49,529 21,326 3,239 7,403 528,158 81,497
---------------------------------------------------------------------------- -------------------------------
Total $ 151,438 $ 178,893 $ 141,754 $ 103,407 $ 90,052 $ 952,874 $ 514,106
---------------------------------------------------------------------------- -------------------------------
EARNINGS BEFORE INCOME TAX
Variable Annuity $ (318) $ (211) $ (123) $ 232 $ 672 $ 859 $ 570
Fixed Annuity 3,352 3,926 3,114 2,401 3,362 14,835 12,803
---------------------------------------------------------------------------- --------------------------------
Total $ 3,034 $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 15,694 $ 13,373
---------------------------------------------------------------------------- -------------------------------
DEPOSIT BALANCE
VA Fixed Annuity $ 321,586 $ 363,741 $ 357,937 $ 334,644 $ 305,203 $ 321,586 $ 305,203
VA Sep Acct Annuity 1,397,586 1,366,633 1,611,964 1,714,999 1,940,877 1,397,586 1,940,877
---------------------------------------------------------------------------- -------------------------------
Sub-total 1,719,172 1,730,374 1,969,901 2,049,643 2,246,080 1,719,172 2,246,080
Fixed Annuity 2,986,596 3,005,278 2,989,964 2,904,016 2,900,002 2,986,596 2,900,002
---------------------------------------------------------------------------- -------------------------------
Total $4,705,768 $4,735,652 $4,959,865 $4,953,659 $5,146,082 $4,705,768 $5,146,082
---------------------------------------------------------------------------- -------------------------------
PROTECTIVE LIFE CORPORATION Draft
Stable Value Contracts and Asset Protection Data 2/5/2004
(Dollar in thousands unless otherwise noted) Page 9
(Unaudited)
---------------------------------------------------------------------------- -------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
---------------------------------------------------------------------------- -------------------------------
STABLE VALUE CONTRACTS
SALES (millions)
GIC $ 91 $ 219 $ 30 $ 25 $ 1 $ 267 $ 275
GFA 300 225 100 100 908 888 1,333
---------------------------------------------------------------------------- -------------------------------
Total $ 391 $ 444 $ 130 $ 125 $ 909 $ 1,155 $ 1,608
---------------------------------------------------------------------------- -------------------------------
DEPOSIT BALANCE (thous)
Total $3,930,668 $3,999,054 $ 4,071,061 $ 4,010,185 $4,520,956 $3,930,668 $4,520,956
OPERATING SPREAD 1.12% 0.93% 1.01% 0.95% 0.95% 1.07% 0.96%
---------------------------------------------------------------------------- -------------------------------
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 12 MOS 12 MOS
2002 2003 2003 2003 2003 2002 2003
---------------------------------------------------------------------------- -------------------------------
ASSET PROTECTION
SALES
Credit $ 37,990 $ 45,642 $ 51,168 $ 53,418 $ 48,024 $ 177,722 $ 198,252
Service Contracts 40,729 38,709 53,869 59,421 52,811 195,803 204,810
Other 34,627 23,552 30,313 22,601 12,309 116,757 88,775
---------------------------------------------------------------------------- -------------------------------
Total $ 113,346 $ 107,903 $ 135,350 $ 135,440 $ 113,144 $ 490,282 $ 491,837
---------------------------------------------------------------------------- -------------------------------