Protective Life Corporation
Post Office Box 2606
Birmingham, AL 35202
Phone 205-268-1000
| The following document contains supplemental quarterly statistical financial information for the quarter ended September 30, 2004. This document is dated November 2, 2004. Protective does not undertake a duty to update such information after such date. |
| All per share results are presented on a diluted basis. |
| 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. |
| Information About Non-GAAP Financial Measures |
| Throughout this document, GAAP refers to accounting principles generally accepted in the United States of America.Operating income differs from the GAAP measure, net income, in that it excludes realized investment gains and losses and related amortization and gains and losses related to certain derivative financial instruments, and the cumulative effect of change in accounting principle. 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. Periodic settlements of interest rate swaps associated with corporate debt and certain investments are included in realized gains (losses) but are considered part of operating income because the swaps are used to mitigate risk in items affecting operating income. 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, as it represents the basis on which the performance of the Company’s business is internally assessed. |
| 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. Therefore, the Company reports the non-GAAP measureshare owners’ equity per share excluding accumulated othercomprehensive income,including unrealized gains (losses) on investments. This non-GAAP measure may be reconciled to the GAAP measure, share owners’ equity per share by including accumulated other comprehensive income, including unrealized gains (losses) on investments. |
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PROTECTIVE LIFE CORPORATION Draft
Quarterly Financial Highlights 11/1/2004
(Dollars in Thousands) Page 1
(Unaudited)
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2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
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Pretax Operating Income *
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Life Marketing $36,725 $30,635 $46,116 $39,501 $42,905 $41,601 $43,597 $38,818 $116,252 $124,016
Acquisitions 26,441 22,772 24,281 24,831 23,266 21,203 23,461 21,262 71,884 65,926
Annuities 3,034 3,715 2,991 2,633 4,034 2,813 4,975 4,008 9,339 11,796
Stable Value Contracts 11,334 9,138 10,098 9,523 10,152 11,699 13,926 13,313 28,759 38,938
Asset Protection (24,445) 1,242 9,761 5,112 4,078 4,603 4,371 5,425 16,115 14,399
Corporate & Other (3,958) 960 (22,561) (7,849) (2,502) 4,305 3,128 12,325 (29,450) 19,758
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Total Pretax Operating Income $49,131 $68,462 $70,686 $73,751 $81,933 $86,224 $93,458 $95,151 $212,899 $274,833
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Balance Sheet Data
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Total GAAP Assets $21,933,111 $22,748,452 $23,287,560 $23,295,984 $24,573,991 $25,417,656 $25,140,587 $25,989,727
Share Owners' Equity $1,720,702 $1,810,480 $2,026,445 $1,965,756 $2,002,144 $2,202,165 $1,890,542 $2,122,782
Share Owners' Equity (excluding accumulated other comprehensive income) ** $1,484,788 $1,513,566 $1,564,910 $1,606,569 $1,669,559 $1,716,619 $1,769,536 $1,828,737
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Stock Data
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Closing Price $30.77 $27.52 $28.55 $26.75 $29.85 $37.45 $38.67 $39.31 $26.75 $39.31
Average Shares Outstanding
Basic 69,959,056 69,956,505 70,004,109 70,091,080 70,079,471 70,142,108 70,284,893 70,337,248 70,017,724 70,255,051
Diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468 70,590,253 71,011,727
* "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 5 for a reconciliation of "Pretax Operating Income" to "Income Before Income Tax".
** "Share-owners' equity excluding accumulated other comprehensive income" is a non-GAAP financial measure. "Share-owners' equity" is a GAAP financial measure to which
"Share-owners' equity excluding accumulated other comprehensive income" may be compared.
See Page 4 for a reconciliation of "Share-owners' equity excluding accumulated other comprehensive income" to "Share-owners' equity".
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PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Statements Of Income 11/1/2004
(Dollars in thousands) Page 2
(Unaudited)
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2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
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REVENUES
Gross Premiums and Policy Fees $ 415,172 $ 387,094 $ 397,652 $ 424,590 $ 460,976 $ 443,796 $ 456,088 $ 460,784 $ 1,209,336 $ 1,360,668
Reinsurance Ceded (252,657) (189,417) (205,268) (237,996) (301,754) (249,339) (285,369) (276,736) (632,681) (811,444)
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Net Premiums and Policy Fees 162,515 197,677 192,384 186,594 159,222 194,457 170,719 184,048 576,655 549,224
Net investment income 268,731 257,701 262,744 248,915 261,392 264,608 265,899 279,271 769,360 809,778
RIGL - Derivatives 2,194 (4,880) 4,334 (9,048) 22,144 5,083 8,740 6,287 (9,594) 20,110
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 55,388 23,885
Other income 21,432 25,309 39,981 26,128 28,864 37,419 37,563 40,921 91,418 115,903
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Total Revenues 453,887 474,629 528,967 479,631 474,298 518,194 481,998 518,708 1,483,227 1,518,900
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BENEFITS & EXPENSES
Benefits and settlement expenses 293,601 297,273 304,933 281,693 267,675 287,316 282,469 288,455 883,899 858,240
Amortization of deferred policy acquisition costs 53,495 55,759 64,803 56,241 48,304 59,794 45,053 52,375 176,803 157,222
Amortization of goodwill 0 0 0 0 0 0 0 0 0 0
Other operating expenses 52,355 55,297 58,697 51,872 45,946 59,726 46,769 63,177 165,866 169,672
Interest on indebtedness 10,796 10,261 11,242 11,033 11,084 11,959 12,337 12,435 32,536 36,731
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Total Benefits and Expenses 410,247 418,590 439,675 400,839 373,009 418,795 386,628 416,442 1,259,104 1,221,865
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INCOME BEFORE INCOME TAX 43,640 56,039 89,292 78,792 101,289 99,399 95,370 102,266 224,123 297,035
Income tax expense 13,296 18,334 29,916 26,383 33,729 34,094 34,075 35,793 74,633 103,962
Change in Acct Principle 0 0 0 0 0 (10,128) 0 0 0 (10,128)
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NET INCOME $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 55,177 $ 61,295 $ 66,473 $ 149,490 $ 182,945
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PER SHARE DATA FOR QUARTER
Operating income-diluted * $ 0.48 $ 0.65 $ 0.67 $ 0.70 $ 0.77 $ 0.80 $ 0.84 $ 0.88
RIGL - Derivatives net of gains related to corp debt and investments (0.04) (0.10) (0.01) (0.13) 0.16 0.00 0.03 0.02
RIGL - All Other Investments (0.01) (0.02) 0.19 0.17 0.02 0.12 (0.01) 0.04
Change in Accounting Principle 0.00 0.00 0.00 0.00 0.00 (0.14) 0.00 0.00
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Net income-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.78 $ 0.86 $ 0.94
Average shares outstanding-diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468
Dividends paid $ 0.150 $ 0.150 $ 0.160 $ 0.160 $ 0.160 $ 0.160 $ 0.175 $ 0.175
PER SHARE DATA FOR YTD
Operating income-diluted * $ 2.48 $ 0.65 $ 1.32 $ 2.02 $ 2.79 $ 0.80 $ 1.64 $ 2.52 $ 2.02 $ 2.52
RIGL - Derivatives net of gains related to corp debt and investments 0.05 (0.10) (0.11) (0.24) (0.08) 0.00 0.03 0.05 (0.24) 0.05
RIGL - All Other Investments (0.01) (0.02) 0.17 0.34 0.36 0.12 0.11 0.15 0.34 0.15
Change in Accounting Principle 0.00 0.00 0.00 0.00 0.00 (0.14) (0.14) (0.14) 0.00 (0.14)
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Net income-diluted $ 2.52 $ 0.53 $ 1.38 $ 2.12 $ 3.07 $ 0.78 $ 1.64 $ 2.58 $ 2.12 $ 2.58
Average shares outstanding-diluted 70,462,797 70,483,448 70,522,838 70,590,253 70,644,642 70,887,591 70,959,287 71,011,727 70,590,253 71,011,727
Dividends paid $ 0.590 $ 0.150 $ 0.310 $ 0.470 $ 0.630 $ 0.160 $ 0.335 $ 0.510 $ 0.470 $ 0.510
* "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 11/1/2004
(Dollars in thousands) Page 3
(Unaudited)
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2002 2003 2003 2003 2003 2004 2004 2004
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR
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ASSETS
Fixed maturities $ 11,664,065 $ 12,146,120 $12,504,655 $12,452,180 $13,355,911 $13,875,517 $ 13,295,606 $ 13,679,358
Equity securities 64,523 55,416 56,248 52,460 46,731 58,362 57,802 59,635
Mortgage loans 2,518,152 2,483,630 2,543,013 2,678,360 2,733,722 2,746,706 2,836,683 2,904,729
Investment real estate 20,711 19,485 16,930 16,781 18,126 108,098 107,163 107,220
Policy loans 543,161 536,085 532,981 523,869 502,748 492,782 486,661 485,282
Other long-term investments 222,490 227,554 258,897 246,177 249,494 231,161 197,246 217,270
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Long-term investments 15,033,102 15,468,290 15,912,724 15,969,827 16,906,732 17,512,626 16,981,161 17,453,494
Short-term investments 448,399 912,999 804,923 582,830 519,419 516,988 694,002 1,042,278
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Total investments 15,481,501 16,381,289 16,717,647 16,552,657 17,426,151 18,029,614 17,675,163 18,495,772
Cash 101,953 55,830 91,093 105,019 136,698 114,972 105,518 117,118
Accrued investment income 181,966 196,107 185,300 194,115 189,232 198,564 194,403 204,977
Accounts and premiums receivable 61,425 63,186 63,464 55,879 57,944 95,943 53,958 51,504
Reinsurance receivable 2,368,068 2,402,371 2,270,817 2,299,140 2,350,606 2,462,269 2,515,619 2,619,934
Deferred policy acquisition costs 1,707,253 1,703,410 1,727,076 1,815,071 1,861,020 1,867,195 1,932,737 1,841,162
Goodwill 47,312 47,312 47,312 47,312 47,312 46,619 46,619 46,619
Property and equipment, net 41,324 44,279 46,392 45,663 45,640 45,143 46,821 46,359
Other assets 309,791 282,602 278,554 214,499 238,581 256,894 254,920 259,389
Assets Related to Separate Accounts
Variable Annuity 1,513,824 1,452,098 1,718,478 1,813,738 2,045,038 2,113,413 2,121,517 2,110,082
Variable Universal Life 114,364 115,591 137,027 148,511 171,408 182,665 188,963 192,478
Other 4,330 4,377 4,400 4,380 4,361 4,365 4,349 4,333
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TOTAL ASSETS $ 21,933,111 $ 22,748,452 $23,287,560 $23,295,984 $24,573,991 $25,417,656 $ 25,140,587 $ 25,989,727
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PROTECTIVE LIFE CORPORATION Draft
GAAP Consolidated Balance Sheets 11/1/2004
(Dollars in thousands) Page 4
(Unaudited)
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LIABILITIES AND SHARE-OWNERS' EQUITY
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2002 2003 2003 2003 2003 2004 2004 2004
LIABILITIES 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR
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Policy liabilities and accruals
Future policy benefits and claims $ 8,248,182 $ 8,416,509 $ 8,626,989 $ 8,752,643 $ 8,948,131 $ 9,258,485 $ 9,452,459 $ 9,661,010
Unearned premiums 875,956 848,457 782,440 786,396 784,566 701,914 697,031 701,196
Stable value product deposits 4,018,552 4,106,685 4,214,470 4,135,212 4,676,531 4,923,231 4,921,166 5,143,367
Annuity deposits 3,697,495 3,714,368 3,636,423 3,538,368 3,480,577 3,412,553 3,419,225 3,429,473
Other policyholders' funds 174,140 172,849 164,840 160,946 158,875 159,458 157,612 155,952
Securities sold under repurchase agreements 0 0 0 111,725 0 8,660 0 0
Other liabilities 697,578 1,175,568 969,069 901,997 859,034 799,288 884,200 950,556
Accrued income taxes 3,186 24,911 (19,843) (43,154) (34,261) 42,262 (12,074) (30,943)
Deferred income taxes 242,593 264,342 374,306 362,991 377,990 415,849 213,967 332,327
Debt 406,110 426,103 436,394 440,344 461,329 376,457 385,449 401,541
Liabilities related to variable interest entities 0 0 0 0 400,000 477,128 476,591 475,953
Subordinated debt securities 215,000 215,000 215,000 215,000 221,650 324,743 324,743 324,743
Minority interest - subsidiaries 1,099 1,114 1,122 1,131 16,618 15,020 14,847 14,877
Liabilities related to separate accounts
Variable annuity 1,513,824 1,452,098 1,718,478 1,813,738 2,045,038 2,113,413 2,121,517 2,110,082
Variable universal life 114,364 115,591 137,027 148,511 171,408 182,665 188,963 192,478
Other 4,330 4,377 4,400 4,380 4,361 4,365 4,349 4,333
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TOTAL LIABILITIES $ 20,212,409 $ 20,937,972 $21,261,115 $21,330,228 $22,571,847 $23,215,491 $ 23,250,045 $ 23,866,945
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SHARE-OWNERS' EQUITY
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Preferred stock 0 0 0 0 0 0 0 0
Common stock 36,626 36,626 36,626 36,626 36,626 36,626 36,626 36,626
Additional paid-in capital 408,397 409,007 412,282 412,368 418,351 419,147 423,257 425,181
Treasury stock (16,402) (15,631) (15,578) (15,558) (15,275) (13,931) (13,783) (13,684)
Stock held in trust (2,417) (2,812) (3,149) (2,979) (2,788) (2,365) (2,855) 0
Unallocated ESOP shares (2,777) (2,367) (2,367) (2,367) (2,367) (1,989) (1,989) (1,989)
Retained earnings 1,061,361 1,088,743 1,137,096 1,178,479 1,235,012 1,279,131 1,328,280 1,382,603
Accumulated other comprehensive income 235,914 296,914 461,535 359,187 332,585 485,546 121,006 294,045
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Total Share-owners' Equity 1,720,702 1,810,480 2,026,445 1,965,756 2,002,144 2,202,165 1,890,542 2,122,782
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TOTAL LIABILITIES AND EQUITY $ 21,933,111 $ 22,748,452 $23,287,560 $23,295,984 $24,573,991 $25,417,656 $ 25,140,587 $ 25,989,727
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SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity $ 25.06 $ 26.28 $ 29.41 $ 28.53 $ 29.02 $ 31.75 $ 27.24 $ 30.57
Accumulated other comprehensive income 3.44 4.31 6.70 5.21 4.82 7.00 1.74 4.23
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Excluding accumulated other comprehensive income * $ 21.62 $ 21.97 $ 22.71 $ 23.31 $ 24.20 $ 24.75 $ 25.49 $ 26.34
Total Share-owners' Equity $ 1,720,702 $ 1,810,480 $ 2,026,445 $ 1,965,756 $ 2,002,144 $ 2,202,165 $ 1,890,542 $ 2,122,782
Accumulated other comprehensive income 235,914 296,914 461,535 359,187 332,585 485,546 121,006 294,045
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Share-owners' Equity (excluding accumulated other comprehensive income) * $ 1,484,788 $ 1,513,566 $ 1,564,910 $ 1,606,569 $ 1,669,559 $ 1,716,619 $ 1,769,536 $ 1,828,737
Common shares outstanding 68,675,894 68,891,149 68,907,294 68,912,705 68,991,701 69,366,395 69,407,945 69,435,440
Treasury Stock Shares 4,576,066 4,360,811 4,344,666 4,339,255 4,260,259 3,885,565 3,844,015 3,816,520
* "Share-owners' equity excluding accumulated other comprehensive income" is a non-GAAP financial measure. "Share-owners' equity" is a GAAP financial measure to which
"Share-owners' equity excluding accumulated other comprehensive income" may be compared.
PROTECTIVE LIFE CORPORATION Draft
Calculation of Operating Earnings Per Share 11/1/2004
(Dollars in thousands) Page 5
(Unaudited)
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2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
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CALCULATION OF NET INCOME PER SHARE
Net income $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 55,177 $ 61,295 $ 66,473 $ 149,490 $ 182,945
Average shares outstanding-basic 69,959,056 69,956,505 70,004,109 70,091,080 70,079,471 70,142,108 70,284,893 70,337,248 70,017,724 70,255,051
Average shares outstanding-diluted 70,488,160 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468 70,590,253 71,011,727
Net income per share-basic $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 0.79 $ 0.87 $ 0.94 $ 2.14 $ 2.60
Net income per share-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.78 $ 0.86 $ 0.94 $ 2.12 $ 2.58
Income from continuing operations $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 65,305 $ 61,295 $ 66,473 $ 149,490 $ 193,073
EPS (basic) $ 0.44 $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 0.93 $ 0.87 $ 0.95 $ 2.14 $ 2.75
EPS (diluted) $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.92 $ 0.86 $ 0.94 $ 2.12 $ 2.72
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
RIGL - Derivatives $ 2,194 $ (4,880) $ 4,334 $ (9,048) $ 22,144 $ 5,083 $ 8,740 $ 6,287 $ (9,594) $ 20,110
Derivative Gains related to Corporate Debt and Investments (6,403) (5,634) (5,885) (4,786) (4,782) (4,875) (5,354) (4,684) (16,305) (14,913)
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 55,388 23,885
Related amortization of DAC (297) (731) (9,367) (8,167) (682) (3,660) (551) (2,669) (18,265) (6,880)
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(5,491) (12,423) 18,606 5,041 19,356 13,175 1,912 7,115 11,224 22,202
Tax effect 1,922 4,348 (6,512) (1,764) (6,775) (4,611) (669) (2,491) (3,928) (7,771)
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$ (3,569) $ (8,075) $ 12,094 $ 3,277 $ 12,581 $ 8,564 $ 1,243 $ 4,624 $ 7,296 $ 14,431
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RIGL - Derivatives per share-diluted $ (0.04) $ (0.10) $ (0.01) $ (0.13) $ 0.16 $ - $ 0.03 $ 0.02 $ (0.24) $ 0.05
RIGL - All Other Investments per share-diluted $ (0.01) $ (0.02) $ 0.19 $ 0.17 $ 0.02 $ 0.12 $ (0.01) $ 0.04 $ 0.34 $ 0.15
OPERATING INCOME PER SHARE *
Net income per share-diluted $ 0.43 $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.78 $ 0.86 $ 0.94 $ 2.12 $ 2.58
RIGL - Derivatives per share-diluted (0.04) (0.10) (0.01) (0.13) 0.16 - 0.03 0.02 (0.24) 0.05
RIGL - All Other Investments per share-diluted (0.01) (0.02) 0.19 0.17 0.02 0.12 (0.01) 0.04 0.34 0.15
Change in accounting principle - - - - - (0.14) - - - (0.14)
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Operating income per share-diluted $ 0.48 $ 0.65 $ 0.67 $ 0.70 $ 0.77 $ 0.80 $ 0.84 $ 0.88 $ 2.02 $ 2.52
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NET OPERATING INCOME *
Net income $ 30,344 $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 55,177 $ 61,295 $ 66,473 $ 149,490 $ 182,945
RIGL - Derivatives net of tax & gains related to corp debt & investments (2,736) (6,834) (1,008) (8,992) 11,285 135 2,201 1,042 (16,834) 3,378
RIGL - All Other Investments net of tax and amortization (833) (1,241) 13,102 12,269 1,296 8,429 (959) 3,583 24,130 11,053
Change in accounting principle - - - - - (10,128) - - - (10,128)
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Net operating income $ 33,913 $ 45,780 $ 47,282 $ 49,132 $ 54,979 $ 56,741 $ 60,053 $ 61,848 $ 142,194 $ 178,642
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PRETAX OPERATING INCOME **
Income before income tax $ 43,640 $ 56,039 $ 89,292 $ 78,792 $ 101,289 $ 99,399 $ 95,370 $ 102,266 $ 224,123 $ 297,035
RIGL - Derivatives 2,194 (4,880) 4,334 (9,048) 22,144 5,083 8,740 6,287 (9,594) 20,110
Derivative Gains related to Corporate Debt and Investments (6,403) (5,634) (5,885) (4,786) (4,782) (4,875) (5,354) (4,684) (16,305) (14,913)
RIGL - All Other Investments (985) (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 55,388 23,885
Related amortization of DAC (297) (731) (9,367) (8,167) (682) (3,660) (551) (2,669) (18,265) (6,880)
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Pretax operating income $ 49,131 $ 68,462 $ 70,686 $ 73,751 $ 81,933 $ 86,224 $ 93,458 $ 95,151 $ 212,899 $ 274,833
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* "Net Operating Income" and "Operating Income Per Share" are non-GAAP financial measures. "Net Income" and "Net Income Per Share" are GAAP
financial measures to which "Net Operating Income" and "Operating Income Per Share" 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.
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PROTECTIVE LIFE CORPORATION Draft
Invested Asset Summary 11/1/2004
(Dollars in millions) Page 6
(Unaudited)
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4th QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR
2002 2003 2003 2003 2003 2004 2004 2004
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Total Portfolio
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Fixed Income $11,664.1 $12,146.1 $12,504.7 $12,452.2 $13,355.9 $13,875.5 $13,295.6 $13,679.4
Mortgage Loans 2,518.1 2,483.6 2,543.0 2,678.4 2,733.7 2,746.7 2,836.7 2,904.7
Real Estate 20.7 19.5 16.9 16.8 18.1 108.1 107.2 107.2
Equities 64.5 55.4 56.2 52.4 46.7 58.4 57.8 59.6
Policy Loans 543.2 536.1 533.0 523.9 502.8 492.8 486.7 485.3
Short Term Investments 448.4 913.0 804.9 582.8 519.4 517.0 694.0 1,042.3
Other Long Term Investments 222.5 227.6 258.9 246.2 249.5 231.1 197.2 217.3
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Total Invested Assets $15,481.5 $16,381.3 $16,717.6 $16,552.7 $17,426.1 $18,029.6 $17,675.2 $18,495.8
- -------------------------------------------------------------------
Fixed Income
- -------------------------------------------------------------------
Corporate Bonds $5,911.6 $6,082.8 $6,620.5 $6,516.6 $6,882.0 $6,951.2 $7,051.5 $7,200.4
Mortgage Backed Securities 4,339.0 4,546.8 4,248.9 4,307.2 4,782.6 5,130.8 4,451.7 4,598.3
US Govt Bonds 96.4 92.6 95.2 90.8 90.2 87.8 77.4 79.3
Public Utilities 1,173.4 1,282.3 1,420.3 1,414.2 1,526.9 1,663.8 1,673.8 1,759.2
States, Municipals and Political Subdivisions 29.4 25.8 23.6 27.3 27.1 27.5 26.9 27.7
Preferred Securities 1.8 1.8 2.1 0.7 3.2 3.3 3.4 3.5
Convertibles and Bonds with Warrants 112.5 114.0 94.1 95.4 43.9 11.1 10.9 11.0
------------------------------------------------------------------------------------------------------------
Total Fixed Income Portfolio $11,664.1 $12,146.1 $12,504.7 $12,452.2 $13,355.9 $13,875.5 $13,295.6 $13,679.4
- -------------------------------------------------------------------
Fixed Income - Quality
- -------------------------------------------------------------------
AAA 37.7% 37.7% 34.3% 34.9% 36.9% 37.8% 34.2% 34.6%
AA 5.1% 4.9% 5.1% 5.7% 5.9% 5.9% 6.4% 6.4%
A 22.0% 21.8% 22.2% 22.8% 22.9% 21.8% 23.5% 23.5%
BBB 27.7% 27.5% 28.9% 28.3% 26.8% 27.4% 28.6% 28.6%
BB or Less 7.4% 8.0% 9.5% 8.3% 7.5% 7.1% 7.3% 6.9%
Redeemable Preferred Stock 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
------------------------------------------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------
Mortgage Loans - Type
- -------------------------------------------------------------------
Retail 76.2% 75.7% 76.0% 74.2% 74.7% 73.0% 73.2% 71.2%
Apartments 7.5% 7.2% 7.2% 8.0% 7.9% 9.4% 9.2% 10.1%
Office Buildings 7.4% 7.8% 7.2% 8.4% 8.0% 8.3% 8.7% 8.7%
Warehouses 7.4% 7.5% 7.9% 7.9% 8.0% 7.8% 7.4% 8.5%
Miscellaneous 1.5% 1.8% 1.7% 1.5% 1.4% 1.5% 1.5% 1.5%
------------------------------------------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------
Problem Mortgage Loans
- -------------------------------------------------------------------
60 Days Past Due $1.8 $2.6 $2.6 $0.0 $0.0 $7.5 $0.0 $5.4
90 Days Past Due 1.8 1.1 5.3 7.3 1.3 1.3 3.2 1.9
Renegotiated Loans 5.7 5.7 5.7 5.7 5.7 6.9 5.7 5.7
Foreclosed Real Estate 6.9 0.0 0.0 0.0 4.8 0.0 0.0 1.3
------------------------------------------------------------------------------------------------------------
$16.2 $9.4 $13.6 $13.0 $11.8 $15.7 $8.9 $14.3
- ----------------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Acquisitions - Quarterly Earnings Trends 11/1/2004
(Dollars in thousands) Page 7
(Unaudited)
- ----------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INDIVIDUAL LIFE
REVENUES
Gross Premiums and Policy Fees $ 126,273 $ 128,268 $ 137,150 $ 147,848 $ 156,051 $ 155,620 $ 165,924 $ 165,006 $ 413,266 $ 486,550
Reinsurance Ceded (107,043) (80,223) (90,880) (111,140) (135,537) (106,125) (136,547) (117,796) (282,243) (360,468)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 19,230 48,045 46,270 36,708 20,514 49,495 29,377 47,210 131,023 126,082
Net investment income 21,907 22,389 22,674 24,195 23,256 21,903 22,389 22,834 69,258 67,126
Realized investment gains (losses) - - - - - - - - - -
Other income 13,277 13,972 16,972 13,613 15,239 21,243 22,348 25,151 44,557 68,742
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 54,414 84,406 85,916 74,516 59,009 92,641 74,114 95,195 244,838 261,950
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 21,908 40,558 30,159 34,982 23,111 38,485 31,494 42,090 105,699 112,069
Amortization of deferred policy acquisition costs 7,749 15,237 11,609 5,643 4,254 12,206 4,588 7,466 32,489 24,260
Amortization of goodwill - - - - - - - - - -
Other operating expenses 5,291 11,739 12,218 12,704 8,736 20,442 15,000 27,787 36,661 63,229
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 34,948 67,534 53,986 53,329 36,101 71,133 51,082 77,343 174,849 199,558
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX $ 19,466 $ 16,872 $ 31,930 $ 21,187 $ 22,908 $ 21,508 $ 23,032 $ 17,852 $ 69,989 $ 62,392
================================================================================================================================= =================================
WEST COAST
REVENUES
Gross Premiums and Policy Fees $ 72,944 $ 58,279 $ 64,663 $ 71,562 $ 92,610 $ 80,366 $ 85,007 $ 88,946 $ 194,504 $ 254,319
Reinsurance Ceded (71,083) (43,815) (51,021) (56,566) (88,596) (62,661) (68,525) (73,432) (151,402) (204,618)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 1,861 14,464 13,642 14,996 4,014 17,705 16,482 15,514 43,102 49,701
Net investment income 32,767 34,149 34,841 34,504 35,230 36,037 36,540 37,151 103,494 109,728
Realized investment gains (losses) - - - - - - - - - -
Other income 335 - 9 (43) 199 (100) - - (34) (100)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 34,963 48,613 48,492 49,457 39,443 53,642 53,022 52,665 146,562 159,329
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 25,061 34,664 31,717 33,559 25,035 33,541 35,198 36,271 99,940 105,010
Amortization of deferred policy acquisition costs 5,569 5,647 7,424 7,145 9,119 8,875 6,338 7,357 20,216 22,570
Amortization of goodwill - - - - - - - - - -
Other operating expenses (12,926) (5,461) (4,835) (9,561) (14,708) (8,867) (9,079) (11,929) (19,857) (29,875)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 17,704 34,850 34,306 31,143 19,446 33,549 32,457 31,699 100,299 97,705
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX $ 17,259 $ 13,763 $ 14,186 $ 18,314 $ 19,997 $ 20,093 $ 20,565 $ 20,966 $ 46,263 $ 61,624
================================================================================================================================= =================================
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees $ 77,218 $ 73,063 $ 71,326 $ 71,903 $ 73,614 $ 69,469 $ 69,659 $ 66,985 $ 216,292 $ 206,113
Reinsurance Ceded (27,973) (18,626) (18,531) (17,573) (21,264) (17,101) (17,840) (16,562) (54,730) (51,503)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 49,245 54,437 52,795 54,330 52,350 52,368 51,819 50,423 161,562 154,610
Net investment income 67,508 62,296 62,520 61,004 60,323 58,655 58,704 57,682 185,820 175,041
Realized investment gains (losses) - - - - - - - - - -
Other income 395 905 1,542 (329) 522 717 468 655 2,118 1,840
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 117,148 117,638 116,857 115,005 113,195 111,740 110,991 108,760 349,500 331,491
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 73,802 72,619 72,951 72,500 73,698 73,020 71,340 71,571 218,070 215,931
Amortization of deferred policy acquisition costs 6,648 10,081 8,474 7,817 6,318 7,849 7,476 7,056 26,372 22,381
Amortization of goodwill - - - - - - - - - -
Other operating expenses 10,257 12,166 11,151 9,857 9,913 9,668 8,714 8,871 33,174 27,253
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 90,707 94,866 92,576 90,174 89,929 90,537 87,530 87,498 277,616 265,565
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX $ 26,441 $ 22,772 $ 24,281 $ 24,831 $ 23,266 $ 21,203 $ 23,461 $ 21,262 $ 71,884 $ 65,926
================================================================================================================================= =================================
PROTECTIVE LIFE CORPORATION Draft
Life Marketing and Annuities Data 11/1/2004
(Dollars in thousands) Page 8
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
INDIVIDUAL LIFE
SALES BY PRODUCT
Term $ 19,652 $ 21,904 $ 32,718 $ 35,168 $ 30,666 $ 24,688 $ 22,413 $ 21,085 $ 89,790 $ 68,186
U/L 8,600 8,609 9,642 10,824 11,619 10,353 10,710 11,272 29,075 32,335
VUL 1,605 876 1,105 1,245 1,332 1,125 1,474 1,492 3,226 4,091
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 29,857 $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 36,166 $ 34,597 $ 33,849 $ 122,091 $ 104,612
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
SALES BY DISTRIBUTION
RSM System $ 10,006 $ 10,622 $ 12,382 $ 13,252 $ 13,951 $ 12,741 $ 12,569 $ 12,616 $ 36,256 $ 37,926
Empire General 12,026 14,307 22,672 26,081 21,678 16,733 15,027 14,130 63,060 45,890
Stockbrokers 4,887 4,500 6,746 6,634 7,053 6,059 6,780 7,018 17,880 19,857
Direct Response 2,567 1,950 1,665 1,272 936 633 221 85 4,887 939
All Other 371 10 0 (2) (1) 0 0 0 8 0
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 29,857 $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 36,166 $ 34,597 $ 33,849 $ 122,091 $ 104,612
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
WEST COAST
SALES BY PRODUCT
Term $ 19,305 $ 19,306 $ 20,276 $ 21,204 $ 24,093 $ 22,148 $ 19,794 $ 19,961 $ 60,786 $ 61,903
U/L 14,493 7,627 11,004 9,274 11,153 7,344 8,556 5,058 27,905 20,958
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 33,798 $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 29,492 $ 28,350 $ 25,019 $ 88,691 $ 82,861
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
SALES BY DISTRIBUTION
BGA $ 22,781 $ 22,420 $ 24,362 $ 26,346 $ 28,845 $ 26,014 $ 24,553 $ 23,678 $ 73,128 $ 74,245
BOLI 11,017 4,513 6,918 4,132 6,401 3,478 3,797 1,341 15,563 8,616
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 33,798 $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 29,492 $ 28,350 $ 25,019 $ 88,691 $ 82,861
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
ANNUITIES
SALES
Variable Annuity $ 78,348 $ 102,525 $ 94,336 $ 87,459 $ 66,270 $ 61,724 $ 63,317 $ 74,231 $ 284,320 $ 199,272
Immediate Annuity 22,934 26,839 26,092 12,709 16,379 10,966 33,576 23,216 65,640 67,758
Market Value Adjusted Annuity 50,156 49,529 21,326 3,239 7,403 5,128 74,729 83,175 74,094 163,032
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 151,438 $ 178,893 $ 141,754 $ 103,407 $ 90,052 $ 77,818 $ 171,622 $ 180,622 $ 424,054 $ 430,062
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
EARNINGS BEFORE INCOME TAX
Variable Annuity $ (318) $ (211) $ (123) $ 232 $ 672 $ 625 $ 3,492 $ 2,901 $ (102) $ 7,018
Fixed Annuity 3,352 3,926 3,114 2,401 3,362 2,188 1,483 1,107 9,441 4,778
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 3,034 $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 2,813 $ 4,975 $ 4,008 $ 9,339 $ 11,796
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
DEPOSIT BALANCE
VA Fixed Annuity $ 321,586 $ 363,741 $ 357,937 $ 334,644 $ 305,203 $ 275,462 $ 269,353 $ 269,363 $ 334,644 $ 269,363
VA Sep Acct Annuity 1,397,586 1,366,633 1,611,964 1,714,999 1,940,877 2,012,396 2,026,781 2,023,325 1,714,999 2,023,325
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Sub-total 1,719,172 1,730,374 1,969,901 2,049,643 2,246,080 2,287,858 2,296,134 2,292,688 2,049,643 2,292,688
Fixed Annuity 2,986,596 3,005,278 2,989,964 2,904,016 2,900,002 2,877,159 2,930,544 2,986,179 2,904,016 2,986,179
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 4,705,768 $ 4,735,652 $ 4,959,865 $ 4,953,659 $ 5,146,082 $ 5,165,017 $ 5,226,678 $ 5,278,867 $ 4,953,659 $ 5,278,867
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
- ----------------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION Draft
Annuities, Stable Value Contracts, and Asset Protection 11/1/2004
Quarterly Earnings Trends (Dollars in thousands) Page 9
(Unaudited)
- ----------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
ANNUITIES
REVENUES
Gross Premiums and Policy Fees $ 5,962 $ 5,883 $ 6,387 $ 6,864 $ 7,131 $ 7,628 $ 7,594 $ 7,370 $ 19,134 $ 22,592
Reinsurance Ceded - - - - - - - - - -
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 5,962 5,883 6,387 6,864 7,131 7,628 7,594 7,370 19,134 22,592
Net investment income 58,223 58,442 57,780 54,660 53,450 51,588 51,523 52,854 170,882 155,965
RIGL - All Other Investments (1,324) 27 11,206 8,582 2,918 6,004 290 3,524 19,815 9,818
Other income 1,922 1,941 2,075 2,368 2,361 1,785 1,555 1,556 6,384 4,896
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 64,783 66,293 77,448 72,474 65,860 67,005 60,962 65,304 216,215 193,271
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 50,193 52,986 51,339 48,385 45,245 46,046 44,456 46,526 152,710 137,028
Amortization of deferred policy acquisition costs 5,258 4,386 13,967 13,508 6,335 9,057 7,119 8,459 31,861 24,635
Amortization of goodwill - - - - - - - - - -
Other operating expenses 7,919 5,910 7,312 7,533 8,010 6,745 4,673 5,456 20,755 16,874
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 63,370 63,282 72,618 69,426 59,590 61,848 56,248 60,441 205,326 178,537
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX 1,413 3,011 4,830 3,048 6,270 5,157 4,714 4,863 10,889 14,734
Adjustments to Reconcile to Operating Income:
Less: RIGL - All Other Investments (1,324) 27 11,206 8,582 2,918 6,004 290 3,524 19,815 9,818
Add back: Related amortization of deferred policy acquisition costs 297 731 9,367 8,167 682 3,660 551 2,669 18,265 6,880
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
PRETAX OPERATING INCOME $ 3,034 $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 2,813 $ 4,975 $ 4,008 $ 9,339 $ 11,796
================================================================================================================================= =================================
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 64,033 66,666 66,472 174,063 197,171
RIGL - Derivatives 1,363 (661) 940 523 173 271 135 700 802 1,106
RIGL - All Other Investments (2,314) (6,041) 3,320 9,222 2,280 3,608 1,887 6,292 6,501 11,787
Other income - - - - - - - - - -
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 61,889 51,830 63,350 66,186 61,494 67,912 68,688 73,464 181,366 210,064
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 49,375 47,765 46,957 45,374 46,469 49,769 50,720 50,301 140,096 150,790
Amortization of deferred policy acquisition costs 563 599 519 542 619 761 803 894 1,660 2,458
Amortization of goodwill - - - - - - - - - -
Other operating expenses 1,568 1,030 1,516 1,002 1,801 1,804 1,217 1,964 3,548 4,985
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 51,506 49,394 48,992 46,918 48,889 52,334 52,740 53,159 145,304 158,233
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX 10,383 2,436 14,358 19,268 12,605 15,578 15,948 20,305 36,062 51,831
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives 1,363 (661) 940 523 173 271 135 700 802 1,106
Less: RIGL-All Other Investments (2,314) (6,041) 3,320 9,222 2,280 3,608 1,887 6,292 6,501 11,787
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
PRETAX OPERATING INCOME $ 11,334 $ 9,138 $ 10,098 $ 9,523 $ 10,152 $ 11,699 $ 13,926 $ 13,313 $ 28,759 $ 38,938
================================================================================================================================= =================================
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees $ 114,947 $ 105,924 $ 104,153 $ 112,850 $ 118,276 $ 118,179 $ 115,354 $ 120,558 $ 322,927 $ 354,091
Reinsurance Ceded (42,546) (44,152) (44,026) (52,128) (56,128) (63,106) (62,120) (68,755) (140,306) (193,981)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 72,401 61,772 60,127 60,722 62,148 55,073 53,234 51,803 182,621 160,110
Net investment income 10,294 9,246 9,132 9,484 8,790 7,541 7,500 7,922 27,862 22,963
Realized investment gains (losses) - - - - - - - - - -
Other income 4,812 6,971 18,167 8,833 8,267 9,062 9,117 9,565 33,971 27,744
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 87,507 77,989 87,426 79,039 79,205 71,676 69,851 69,290 244,454 210,817
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 60,792 36,458 33,868 34,676 37,164 32,199 33,363 29,226 105,002 94,788
Amortization of deferred policy acquisition costs 20,402 18,483 21,425 19,838 20,574 19,956 17,522 20,042 59,746 57,520
Amortization of goodwill - - - - - - - - - -
Other operating expenses 30,758 21,806 22,372 19,413 17,389 14,918 14,595 14,597 63,591 44,110
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 111,952 76,747 77,665 73,927 75,127 67,073 65,480 63,865 228,339 196,418
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX $ (24,445) $ 1,242 $ 9,761 $ 5,112 $ 4,078 $ 4,603 $ 4,371 $ 5,425 $ 16,115 $ 14,399
================================================================================================================================= =================================
PROTECTIVE LIFE CORPORATION Draft
Stable Value Contracts and Asset Protection Data 11/1/2004
(Dollar in thousands unless otherwise noted) Page 10
(Unaudited)
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
STABLE VALUE CONTRACTS
SALES (millions)
GIC $ 91 $ 219 $ 30 $ 25 $ 1 $ - $ 39 $ 15 $ 274 $ 54
GFA - Direct Institutional 300 25 0 0 353 0 1 0 25 1
GFA - Non registered 0 200 100 100 105 0 0 0 400 0
GFA - Registered - Institutional 0 0 0 0 450 300 0 625 0 925
GFA - Registered - Retail 0 0 0 0 0 222 68 136 0 425
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 391 $ 444 $ 130 $ 125 $ 909 $ 522 $ 108 $ 776 $ 699 $ 1,405
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
DEPOSIT BALANCE (thous)
Quarter End Balance $ 4,018,552 $ 4,106,685 $ 4,214,470 $ 4,135,212 $ 4,676,531 $ 4,923,231 $ 4,921,166 $ 5,143,367 $ 4,135,212 $ 5,143,367
Average Daily Balance $ 4,112,986 $ 4,035,367 $ 4,153,071 $ 4,147,034 $ 4,424,234 $ 4,851,592 $ 5,062,014 $ 5,112,019 $ 4,111,876 $ 5,009,546
OPERATING SPREAD 1.12% 0.93% 1.01% 0.95% 0.95% 1.00% 1.13% 1.07% 0.96% 1.07%
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
ASSET PROTECTION
SALES
Credit $ 37,990 $ 45,642 $ 51,168 $ 53,418 $ 48,024 $ 51,246 $ 59,035 $ 59,543 $ 150,228 $ 169,824
Service Contracts 40,729 38,709 53,869 59,421 52,811 44,275 54,861 56,627 151,999 155,763
Other 28,150 17,386 23,650 18,410 9,905 8,151 8,941 8,883 59,446 25,975
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
Total $ 106,869 $ 101,737 $ 128,687 $ 131,249 $ 110,740 $ 103,672 $ 122,837 $ 125,053 $ 361,673 $ 351,562
------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------
PROTECTIVE LIFE CORPORATION Draft
Corp & Other Segment - Quarterly Earnings Trends 11/1/2004
(Dollars in thousands) Page 11
(Unaudited)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
2002 2003 2003 2003 2003 2004 2004 2004 9 MOS 9 MOS
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 2003 2004
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
REVENUES
Gross Premiums and Policy Fees $ 17,828 $ 15,677 $ 13,973 $ 13,563 $ 13,294 $ 12,534 $ 12,550 $ 11,919 $ 43,213 $ 37,003
Reinsurance Ceded (4,012) (2,601) (810) (589) (229) (346) (337) (191) (4,000) (874)
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Net Premiums and Policy Fees 13,816 13,076 13,163 12,974 13,065 12,188 12,213 11,728 39,213 36,129
Net investment income 15,192 12,647 16,707 8,627 21,302 24,851 22,577 34,356 37,981 81,784
RIGL - Derivatives 831 (4,219) 3,394 (9,571) 21,971 4,812 8,605 5,587 (10,396) 19,004
RIGL - All Other Investments 2,653 4,836 14,998 9,238 (2,522) 7,015 (3,100) (1,635) 29,072 2,280
Other income 691 1,520 1,216 1,686 2,276 4,712 4,075 3,994 4,422 12,781
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Revenues 33,183 27,860 49,478 22,954 56,092 53,578 44,370 54,030 100,292 151,978
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 12,470 12,223 37,942 12,217 16,953 14,256 15,898 12,470 62,382 42,624
Amortization of deferred policy acquisition costs 7,306 1,326 1,385 1,748 1,085 1,090 1,207 1,101 4,459 3,398
Amortization of goodwill - - - - - - - - - -
Other operating expenses 20,284 18,368 20,205 21,957 25,889 26,975 23,986 28,866 60,530 79,827
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
Total Benefits and Expenses 40,060 31,917 59,532 35,922 43,927 42,321 41,091 42,437 127,371 125,849
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAX (6,877) (4,057) (10,054) (12,968) 12,165 11,257 3,279 11,593 (27,079) 26,129
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives 831 (4,219) 3,394 (9,571) 21,971 4,812 8,605 5,587 (10,396) 19,004
Less: RIGL-All Other Investments 2,653 4,836 14,998 9,238 (2,522) 7,015 (3,100) (1,635) 29,072 2,280
Add back: Derivative Gains related to Corporate Debt and Investments 6,403 5,634 5,885 4,786 4,782 4,875 5,354 4,684 16,305 14,913
--------------------------------------------------------------------------------------------------------------------------------- ---------------------------------
PRETAX OPERATING INCOME $ (3,958) $ 960 $ (22,561) $ (7,849) $ (2,502) $ 4,305 $ 3,128 $ 12,325 $ (29,450) $ 19,758
================================================================================================================================= =================================