Protective Life Corporation
Post Office Box 2606
Birmingham, AL 35202
Phone 205-268-1000
SUPPLEMENTAL FINANCIAL INFORMATION
The following document contains supplemental quarterly statistical financial information for the quarter ended December 31, 2004. This document is dated February 8, 2005. Protective does not undertake a duty to update such information after such date.
All income 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 other comprehensive 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.
PROTECTIVE LIFE CORPORATION
Quarterly Financial Highlights
(Dollars in Thousands)
(Unaudited)
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2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
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Pretax Operating Income*
- -------------------------------------------------------------------------------------
Life Marketing $30,635 $46,116 $39,501 $42,905 $41,601 $43,597 $38,818 $41,881 $159,157 $165,897
Acquisitions 22,772 24,281 24,831 23,266 21,203 23,461 21,262 21,374 95,150 87,300
Annuities 3,715 2,991 2,633 4,034 2,813 4,975 4,008 4,671 13,373 16,467
Stable Value Contracts 9,138 10,098 9,523 10,152 11,699 13,926 13,313 14,221 38,911 53,159
Asset Protection 1,242 9,761 5,112 4,078 4,603 4,371 5,425 4,680 20,193 19,079
Corporate & Other 960 (22,561) (7,849) (2,502) 4,305 3,128 12,325 1,802 (31,952) 21,560
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Total Pretax Operating Income $68,462 $70,686 $73,751 $81,933 $86,224 $93,458 $95,151 $88,629 $294,832 $363,462
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Balance Sheet Data
- -------------------------------------------------------------------------------------
Total GAAP Assets $22,705,406 $23,238,499 $23,242,879 $24,517,615 $25,372,264 $25,091,026 $25,936,586 $27,211,378
Share Owners' Equity $1,810,480 $2,026,445 $1,965,756 $2,002,144 $2,196,492 $1,884,869 $2,117,109 $2,166,327
Share Owners' Equity (excluding accumulated other comprehensive income) ** $1,513,566 $1,564,910 $1,606,569 $1,669,559 $1,710,946 $1,763,863 $1,823,064 $1,870,016
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Stock Data
- -------------------------------------------------------------------------------------
Closing Price $27.52 $28.55 $26.75 $29.85 $37.45 $38.67 $39.31 $42.69 $29.85 $42.69
Average Shares Outstanding
Basic 69,956,505 70,004,109 70,091,080 70,079,471 70,142,108 70,284,893 70,337,248 70,431,763 70,033,288 70,299,470
Diluted 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468 71,221,826 70,644,642 71,064,539
* “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”.
PROTECTIVE LIFE CORPORATION
GAAP Consolidated Statements Of Income
(Dollars in thousands)
(Unaudited)
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2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
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REVENUES
Gross Premiums and Policy Fees $ 387,094 $ 397,652 $ 424,590 $ 460,976 $ 443,796 $ 456,088 $ 460,784 $ 480,628 $1,670,312 $1,841,296
Reinsurance Ceded (189,417) (205,268) (237,996) (301,754) (249,339) (285,369) (276,736) (331,200) (934,435) (1,142,644)
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Net Premiums and Policy Fees 197,677 192,384 186,594 159,222 194,457 170,719 184,048 149,428 735,877 698,652
Net investment income 257,701 262,744 248,915 261,392 264,608 265,899 279,271 274,439 1,030,752 1,084,217
RIGL - Derivatives (4,880) 4,334 (9,048) 22,144 5,083 8,740 6,287 (519) 12,550 19,591
RIGL - All Other Investments (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 4,420 58,064 28,305
Other income 25,309 39,981 26,128 28,864 37,419 37,563 40,921 41,907 120,282 157,810
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Total Revenues 474,629 528,967 479,631 474,298 518,194 481,998 518,708 469,675 1,957,525 1,988,575
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BENEFITS & EXPENSES
Benefits and settlement expenses 297,273 304,933 281,693 267,675 287,316 282,469 288,455 272,197 1,151,574 1,130,437
Amortization of deferred policy acquisition costs 55,759 64,803 56,241 48,304 59,794 45,053 52,375 42,908 225,107 200,130
Amortization of goodwill 0 0 0 0 0 0 0 0 0 0
Other operating expenses 55,297 58,697 51,872 45,946 59,726 46,769 63,177 53,419 211,812 223,091
Interest on indebtedness 10,261 11,242 11,033 11,084 11,959 12,337 12,435 12,985 43,620 49,716
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Total Benefits and Expenses 418,590 439,675 400,839 373,009 418,795 386,628 416,442 381,509 1,632,113 1,603,374
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INCOME BEFORE INCOME TAX 56,039 89,292 78,792 101,289 99,399 95,370 102,266 88,166 325,412 385,201
Income tax expense 18,334 29,916 26,383 33,729 34,094 34,075 35,793 30,858 108,362 134,820
Change in Acct Principle 0 0 0 0 (15,801) 0 0 (0) 0 (15,801)
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NET INCOME $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 49,504 $ 61,295 $ 66,473 $ 57,308 $ 217,050 $ 234,580
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PER SHARE DATA FOR QUARTER
Operating income-diluted * $ 0.65 $ 0.67 $ 0.70 $ 0.77 $ 0.80 $ 0.84 $ 0.88 $ 0.80
RIGL - Derivatives net of gains related to corp debt and investments (0.10) (0.01) (0.13) 0.16 0.00 0.03 0.02 (0.05)
RIGL - All Other Investments (0.02) 0.19 0.17 0.02 0.12 (0.01) 0.04 0.05
Change in Accounting Principle 0.00 0.00 0.00 0.00 (0.22) 0.00 0.00 0.00
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Net income-diluted $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.70 $ 0.86 $ 0.94 $ 0.80
Average shares outstanding-diluted 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468 71,221,826
Dividends paid $ 0.150 $ 0.160 $ 0.160 $ 0.160 $ 0.160 $ 0.175 $ 0.175 $ 0.175
PER SHARE DATA FOR YTD
Operating income-diluted * $ 0.65 $ 1.32 $ 2.02 $ 2.79 $ 0.80 $ 1.64 $ 2.52 $ 3.32 $ 2.79 $ 3.32
RIGL - Derivatives net of gains related to corp debt and investments (0.10) (0.11) (0.24) (0.08) 0.00 0.03 0.05 0.00 (0.08) -
RIGL - All Other Investments (0.02) 0.17 0.34 0.36 0.12 0.11 0.15 0.20 0.36 0.20
Change in Accounting Principle 0.00 0.00 0.00 0.00 (0.22) (0.22) (0.22) (0.22) 0.00 (0.22)
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Net income-diluted $ 0.53 $ 1.38 $ 2.12 $ 3.07 $ 0.70 $ 1.56 $ 2.50 $ 3.30 $ 3.07 $ 3.30
Average shares outstanding-diluted 70,483,448 70,522,838 70,590,253 70,644,642 70,887,591 70,959,287 71,011,727 71,064,539 70,644,642 71,064,539
Dividends paid $ 0.150 $ 0.310 $ 0.470 $ 0.630 $ 0.160 $ 0.335 $ 0.510 $ 0.685 $ 0.630 $ 0.685
* “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
GAAP Consolidated Balance Sheets
(Unaudited)
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2003 2003 2003 2003 2004 2004 2004 2004
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR
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ASSETS
Fixed maturities $12,146,120 $12,504,655 $12,452,180 $13,355,911 $13,875,517 $13,295,606 $13,679,358 $14,412,605
Equity securities 55,416 56,248 52,460 46,731 58,362 57,802 59,635 58,941
Mortgage loans 2,483,630 2,543,013 2,678,360 2,733,722 2,746,706 2,836,683 2,904,729 3,005,418
Investment real estate 19,485 16,930 16,781 18,126 108,098 107,163 107,220 107,246
Policy loans 536,085 532,981 523,869 502,748 492,782 486,661 485,282 482,780
Other long-term investments 227,554 258,897 246,177 249,494 231,161 197,246 217,270 259,025
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Long-term investments 15,468,290 15,912,724 15,969,827 16,906,732 17,512,626 16,981,161 17,453,494 18,326,015
Short-term investments 912,999 804,923 582,830 519,419 516,988 694,002 1,042,278 1,059,557
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Total investments 16,381,289 16,717,647 16,552,657 17,426,151 18,029,614 17,675,163 18,495,772 19,385,572
Cash 55,830 91,093 105,019 136,698 114,972 105,518 117,118 130,596
Accrued investment income 196,107 185,300 194,115 189,232 198,564 194,403 204,977 196,076
Accounts and premiums receivable 63,186 63,464 55,879 57,944 95,943 53,958 51,504 44,364
Reinsurance receivable 2,402,371 2,270,817 2,299,140 2,350,606 2,473,372 2,526,722 2,631,037 2,750,260
Deferred policy acquisition costs 1,671,681 1,690,297 1,774,727 1,817,990 1,824,319 1,886,854 1,792,335 1,821,972
Goodwill 47,312 47,312 47,312 47,312 46,619 46,619 46,619 46,619
Property and equipment, net 44,279 46,392 45,663 45,640 45,143 46,821 46,359 45,454
Other assets 271,285 266,272 201,738 225,235 243,275 240,139 243,972 264,512
Assets Related to Separate Accounts
Variable Annuity 1,452,098 1,718,478 1,813,738 2,045,038 2,113,413 2,121,517 2,110,082 2,308,858
Variable Universal Life 115,591 137,027 148,511 171,408 182,665 188,963 192,478 217,095
Other 4,377 4,400 4,380 4,361 4,365 4,349 4,333 0
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TOTAL ASSETS $22,705,406 $23,238,499 $23,242,879 $24,517,615 $25,372,264 $25,091,026 $25,936,586 $27,211,378
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PROTECTIVE LIFE CORPORATION
GAAP Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
LIABILITIES AND SHARE-OWNERS' EQUITY
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2003 2003 2003 2003 2004 2004 2004 2004
LIABILITIES 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR
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Policy liabilities and accruals
Future policy benefits and claims $8,416,509 $8,626,989 $8,752,643 $8,948,131 $9,279,904 $9,473,878 $9,682,429 $10,014,106
Unearned premiums 805,411 733,379 733,291 728,190 643,831 634,779 635,364 666,560
Stable value product deposits 4,106,685 4,214,470 4,135,212 4,676,531 4,923,231 4,921,166 5,143,367 5,562,997
Annuity deposits 3,714,368 3,636,423 3,538,368 3,480,577 3,412,553 3,419,225 3,429,473 3,463,477
Other policyholders' funds 172,849 164,840 160,946 158,875 159,458 157,612 155,952 151,660
Securities sold under repurchase agreements 0 0 111,725 0 8,660 0 0 0
Other liabilities 1,175,568 969,069 901,997 859,034 799,288 884,200 950,556 1,062,706
Accrued income taxes 24,911 (19,843) (43,154) (34,261) 42,262 (12,074) (30,943) 2,526
Deferred income taxes 264,342 374,306 362,991 377,990 412,794 210,912 329,272 323,213
Debt 426,103 436,394 440,344 461,329 376,457 385,449 401,541 451,433
Liabilities related to variable interest entities 0 0 0 400,000 477,128 476,591 475,953 482,434
Subordinated debt securities 215,000 215,000 215,000 221,650 324,743 324,743 324,743 324,743
Minority interest - subsidiaries 1,114 1,122 1,131 16,618 15,020 14,847 14,877 13,243
Liabilities related to separate accounts
Variable annuity 1,452,098 1,718,478 1,813,738 2,045,038 2,113,413 2,121,517 2,110,082 2,308,858
Variable universal life 115,591 137,027 148,511 171,408 182,665 188,963 192,478 217,095
Other 4,377 4,400 4,380 4,361 4,365 4,349 4,333 0
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TOTAL LIABILITIES $20,894,926 $21,212,054 $21,277,123 $22,515,471 $23,175,772 $23,206,157 $23,819,477 $25,045,051
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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 409,007 412,282 412,368 418,351 419,147 423,257 425,181 426,927
Treasury stock (15,631) (15,578) (15,558) (15,275) (13,931) (13,783) (13,684) (13,632)
Stock held in trust (2,812) (3,149) (2,979) (2,788) (2,365) (2,855) 0 0
Unallocated ESOP shares (2,367) (2,367) (2,367) (2,367) (1,989) (1,989) (1,989) (1,989)
Retained earnings 1,088,743 1,137,096 1,178,479 1,235,012 1,273,458 1,322,607 1,376,930 1,422,084
Accumulated other comprehensive income 296,914 461,535 359,187 332,585 485,546 121,006 294,045 296,311
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Total Share-owners' Equity 1,810,480 2,026,445 1,965,756 2,002,144 2,196,492 1,884,869 2,117,109 2,166,327
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TOTAL LIABILITIES AND EQUITY $22,705,406 $23,238,499 $23,242,879 $24,517,615 $25,372,264 $25,091,026 $25,936,586 $27,211,378
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SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity $ 26.28 $ 29.41 $ 28.53 $ 29.02 $ 31.67 $ 27.16 $ 30.49 $ 31.19
Accumulated other comprehensive income 4.31 6.70 5.21 4.82 7.00 1.74 4.23 4.26
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Excluding accumulated other comprehensive income * $ 21.97 $ 22.71 $ 23.31 $ 24.20 $ 24.67 $ 25.41 $ 26.26 $ 26.93
Total Share-owners' Equity $1,810,480 $2,026,445 $1,965,756 $2,002,144 $2,196,492 $1,884,869 $2,117,109 $2,166,327
Accumulated other comprehensive income 296,914 461,535 359,187 332,585 485,546 121,006 294,045 296,311
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Share-owners' Equity (excluding accumulated other comprehensive income) * $1,513,566 $1,564,910 $1,606,569 $1,669,559 $1,710,946 $1,763,863 $1,823,064 $1,870,016
Common shares outstanding 68,891,149 68,907,294 68,912,705 68,991,701 69,366,395 69,407,945 69,435,440 69,449,889
Treasury Stock shares 4,360,811 4,344,666 4,339,255 4,260,259 3,885,565 3,844,015 3,816,520 3,802,071
* “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
Calculation of Operating Earnings Per Share
(Dollars in thousands)
(Unaudited)
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2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
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CALCULATION OF NET INCOME PER SHARE
Net income $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 49,504 $ 61,295 $ 66,473 $ 57,308 $ 217,050 $ 234,580
Average shares outstanding-basic 69,956,505 70,004,109 70,091,080 70,079,471 70,142,108 70,284,893 70,337,248 70,431,763 70,033,288 70,299,470
Average shares outstanding-diluted 70,483,448 70,561,795 70,722,885 70,806,034 70,887,591 71,030,983 71,115,468 71,221,826 70,644,642 71,064,539
Net income per share-basic $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 0.71 $ 0.87 $ 0.94 $ 0.82 $ 3.10 $ 3.34
Net income per share-diluted $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.70 $ 0.86 $ 0.94 $ 0.80 $ 3.07 $ 3.30
Income from continuing operations $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 65,305 $ 61,295 $ 66,473 $ 57,308 $ 217,050 $ 250,381
EPS (basic) $ 0.54 $ 0.85 $ 0.75 $ 0.96 $ 0.93 $ 0.87 $ 0.95 $ 0.81 $ 3.10 $ 3.56
EPS (diluted) $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.92 $ 0.86 $ 0.94 $ 0.80 $ 3.07 $ 3.52
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
RIGL - Derivatives $ (4,880) $ 4,334 $ (9,048) $ 22,144 $ 5,083 $ 8,740 $ 6,287 $ (519) $ 12,550 $ 19,591
Derivative Gains related to Corporate Debt and Investments (5,634) (5,885) (4,786) (4,782) (4,875) (5,354) (4,684) (4,309) (21,087) (19,222)
RIGL - All Other Investments (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 4,420 58,064 28,305
Related amortization of DAC (731) (9,367) (8,167) (682) (3,660) (551) (2,669) (55) (18,947) (6,935)
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(12,423) 18,606 5,041 19,356 13,175 1,912 7,115 (463) 30,580 21,739
Tax effect 4,348 (6,512) (1,764) (6,775) (4,611) (669) (2,491) 162 (10,703) (7,609)
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$ (8,075) $ 12,094 $ 3,277 $ 12,581 $ 8,564 $ 1,243 $ 4,624 $ (301) $ 19,877 $ 14,130
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RIGL - Derivatives per share-diluted $ (0.10) $(0.01) $ 0.13) $ 0.16 $ - $ 0.03 $ 0.02 $ (0.05) $ (0.08) $ -
RIGL - All Other Investments per share-diluted $ (0.02) $ 0.19 $ 0.17 $ 0.02 $ 0.12 $ (0.01) $ 0.04 $ 0.05 $ 0.36 $ 0.20
OPERATING INCOME PER SHARE*
Net income per share-diluted $ 0.53 $ 0.85 $ 0.74 $ 0.95 $ 0.70 $ 0.86 $ 0.94 $ 0.80 $ 3.07 $ 3.30
RIGL - Derivatives per share-diluted (0.10) (0.01) (0.13) 0.16 - 0.03 0.02 (0.05) (0.08) -
RIGL - All Other Investments per share-diluted (0.02) 0.19 0.17 0.02 0.12 (0.01) 0.04 0.05 0.36 0.20
Change in accounting principle - - - - (0.22) - - - - (0.22)
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Operating income per share-diluted $ 0.65 $ 0.67 $ 0.70 $ 0.77 $ 0.80 $ 0.84 $ 0.88 $ 0.80 $ 2.79 $ 3.32
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NET OPERATING INCOME *
Net income $ 37,705 $ 59,376 $ 52,409 $ 67,560 $ 49,504 $ 61,295 $ 66,473 $ 57,308 $ 217,050 $ 234,580
RIGL - Derivatives net of tax & gains related to corp debt & investments (6,834) (1,008) (8,992) 11,285 135 2,201 1,042 (3,138) (5,549) 240
RIGL - All Other Investments net of tax and amortization (1,241) 13,102 12,269 1,296 8,429 (959) 3,583 2,838 25,426 13,891
Change in accounting principle - - - - (15,801) - - - - (15,801)
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Net operating income $ 45,780 $ 47,282 $ 49,132 $ 54,979 $ 56,741 $ 60,053 $ 61,848 $ 57,608 $ 197,173 $ 236,250
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PRETAX OPERATING INCOME **
Income before income tax $ 56,039 $ 89,292 $ 78,792 $ 101,289 $ 99,399 $ 95,370 $ 102,266 $ 88,166 $ 325,412 $ 385,201
RIGL - Derivatives (4,880) 4,334 (9,048) 22,144 5,083 8,740 6,287 (519) 12,550 19,591
Derivative Gains related to Corporate Debt and Investments (5,634) (5,885) (4,786) (4,782) (4,875) (5,354) (4,684) (4,309) (21,087) (19,222)
RIGL - All Other Investments (1,178) 29,524 27,042 2,676 16,627 (923) 8,181 4,420 58,064 28,305
Related amortization of DAC (731) (9,367) (8,167) (682) (3,660) (551) (2,669) (55) (18,947) (6,935)
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Pretax operating income $ 68,462 $ 70,686 $ 73,751 $ 81,933 $ 86,224 $ 93,458 $ 95,151 $ 88,629 $ 294,832 $ 363,462
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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.
PROTECTIVE LIFE CORPORATION
Invested Asset Summary
(Dollars in millions)
(Unaudited)
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1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR
2003 2003 2003 2003 2004 2004 2004 2004
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Total Portfolio
- ---------------------------------------------------------
Fixed Income $12,146.1 $12,504.7 $12,452.2 $13,355.9 $13,875.5 $13,295.6 $13,679.4 $14,412.6
Mortgage Loans 2,483.6 2,543.0 2,678.4 2,733.7 2,746.7 2,836.7 2,904.7 3,005.4
Real Estate 19.5 16.9 16.8 18.1 108.1 107.2 107.2 107.3
Equities 55.4 56.2 52.4 46.7 58.4 57.8 59.6 58.9
Policy Loans 536.1 533.0 523.9 502.8 492.8 486.7 485.3 482.8
Short Term Investments 913.0 804.9 582.8 519.4 517.0 694.0 1,042.3 1,059.6
Other Long Term Investments 227.6 258.9 246.2 249.5 231.1 197.2 217.3 259.0
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Total Invested Assets $16,381.3 $16,717.6 $16,552.7 $17,426.1 $18,029.6 $17,675.2 $18,495.8 $19,385.6
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Fixed Income
- ---------------------------------------------------------
Corporate Bonds $6,082.8 $6,620.5 $6,516.6 $6,882.0 $6,951.2 $7,051.5 $7,200.4 $7,466.0
Mortgage Backed Securities 4,546.8 4,248.9 4,307.2 4,782.6 5,130.8 4,451.7 4,598.3 5,070.2
US Govt Bonds 92.6 95.2 90.8 90.2 87.8 77.4 79.3 86.0
Public Utilities 1,282.3 1,420.3 1,414.2 1,526.9 1,663.8 1,673.8 1,759.2 1,745.5
States, Municipals and Political Subdivisions 25.8 23.6 27.3 27.1 27.5 26.9 27.7 30.4
Preferred Securities 1.8 2.1 0.7 3.2 3.3 3.4 3.5 3.6
Convertibles and Bonds with Warrants 114.0 94.1 95.4 43.9 11.1 10.9 11.0 10.9
----------------------------------------------------------------------------------------------------------
Total Fixed Income Portfolio $12,146.1 $12,504.7 $12,452.2 $13,355.9 $13,875.5 $13,295.6 $13,679.4 $14,412.6
- ---------------------------------------------------------
Fixed Income - Quality
- ---------------------------------------------------------
AAA 37.7% 34.3% 34.9% 36.9% 37.8% 34.2% 34.6% 35.9%
AA 4.9% 5.1% 5.7% 5.9% 5.9% 6.4% 6.4% 6.2%
A 21.8% 22.2% 22.8% 22.9% 21.8% 23.5% 23.5% 22.2%
BBB 27.5% 28.9% 28.3% 26.8% 27.4% 28.6% 28.6% 28.9%
BB or Less 8.0% 9.5% 8.3% 7.5% 7.1% 7.3% 6.9% 6.8%
Redeemable Preferred Stock 0.1% 0.0% 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 75.7% 76.0% 74.2% 74.7% 73.0% 73.2% 71.2% 70.7%
Apartments 7.2% 7.2% 8.0% 7.9% 9.4% 9.2% 10.1% 10.2%
Office Buildings 7.8% 7.2% 8.4% 8.0% 8.3% 8.7% 8.7% 9.2%
Warehouses 7.5% 7.9% 7.9% 8.0% 7.8% 7.4% 8.5% 8.4%
Miscellaneous 1.8% 1.7% 1.5% 1.4% 1.5% 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 $2.6 $2.6 $0.0 $0.0 $7.5 $0.0 $5.4 $1.9
90 Days Past Due 1.1 5.3 7.3 1.3 1.3 3.2 1.9 1.9
Renegotiated Loans 5.7 5.7 5.7 5.7 6.9 5.7 5.7 5.6
Foreclosed Real Estate 0.0 0.0 0.0 4.8 0.0 0.0 1.3 1.4
---------------------------------------------------------------------------------------------------------
$9.4 $13.6 $13.0 $11.8 $15.7 $8.9 $14.3 $10.8
PROTECTIVE LIFE CORPORATION
Life Marketing and Acquisitions - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)
--------------------------------------------------------------------------------------------------------- --------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
--------------------------------------------------------------------------------------------------------- --------------------------
INDIVIDUAL LIFE
REVENUES
Gross Premiums and Policy Fees $128,268 $137,150 $147,848 $156,051 $155,620 $165,924 $165,006 $171,228 $569,317 $657,778
Reinsurance Ceded (80,223) (90,880) (111,140) (135,537) (106,125) (136,547) (117,796) (141,985) (417,780) (502,453)
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 48,045 46,270 36,708 20,514 49,495 29,377 47,210 29,243 151,537 155,325
Net investment income 22,389 22,674 24,195 23,256 21,903 22,389 22,834 23,048 92,514 90,174
Realized investment gains (losses) - - - - - - - - - -
Other income 13,972 16,972 13,613 15,239 21,243 22,348 25,151 26,053 59,796 94,795
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 84,406 85,916 74,516 59,009 92,641 74,114 95,195 78,344 303,847 340,294
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 40,558 30,159 34,982 23,111 38,485 31,494 42,090 32,621 128,810 144,690
Amortization of deferred policy acquisition costs 15,237 11,609 5,643 4,254 12,206 4,588 7,466 3,356 36,743 27,616
Amortization of goodwill - - - - - - - - - -
Other operating expenses 11,739 12,218 12,704 8,736 20,442 15,000 27,787 21,719 45,397 84,948
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 67,534 53,986 53,329 36,101 71,133 51,082 77,343 57,696 210,950 257,254
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX $16,872 $31,930 $21,187 $22,908 $21,508 $23,032 $17,852 $20,648 $92,897 $83,040
========================================================================================================= ==========================
WEST COAST
REVENUES
Gross Premiums and Policy Fees $58,279 $64,663 $71,562 $92,610 $80,366 $85,007 $88,946 $114,792 $287,114 $369,111
Reinsurance Ceded (43,815) (51,021) (56,566) (88,596) (62,661) (68,525) (73,432) (111,136) (239,998) (315,754)
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 14,464 13,642 14,996 4,014 17,705 16,482 15,514 3,656 47,116 53,357
Net investment income 34,149 34,841 34,504 35,230 36,037 36,540 37,151 38,291 138,724 148,019
Realized investment gains (losses) - - - - - - - - - -
Other income - 9 (43) 199 (100) - - - 165 (100)
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 48,613 48,492 49,457 39,443 53,642 53,022 52,665 41,947 186,005 201,276
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 34,664 31,717 33,559 25,035 33,541 35,198 36,271 24,884 124,975 129,894
Amortization of deferred policy acquisition costs 5,647 7,424 7,145 9,119 8,875 6,338 7,357 8,784 29,335 31,354
Amortization of goodwill - - - - - - - - - -
Other operating expenses (5,461) (4,835) (9,561) (14,708) (8,867) (9,079) (11,929) (12,954) (34,565) (42,829)
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 34,850 34,306 31,143 19,446 33,549 32,457 31,699 20,714 119,745 118,419
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX $13,763 $14,186 $18,314 $19,997 $20,093 $20,565 $20,966 $21,233 $66,260 $82,857
========================================================================================================= ==========================
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees $73,063 $71,326 $71,903 $73,614 $69,469 $69,659 $66,985 $70,281 $289,906 $276,394
Reinsurance Ceded (18,626) (18,531) (17,573) (21,264) (17,101) (17,840) (16,562) (20,559) (75,994) (72,062)
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 54,437 52,795 54,330 52,350 52,368 51,819 50,423 49,722 213,912 204,332
Net investment income 62,296 62,520 61,004 60,323 58,655 58,704 57,682 57,458 246,143 232,499
Realized investment gains (losses) - - - - - - - - - -
Other income 905 1,542 (329) 522 717 468 655 432 2,640 2,272
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 117,638 116,857 115,005 113,195 111,740 110,991 108,760 107,612 462,695 439,103
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 72,619 72,951 72,500 73,698 73,020 71,340 71,571 71,425 291,768 287,356
Amortization of deferred policy acquisition costs 10,081 8,474 7,817 6,318 7,849 7,476 7,056 6,271 32,690 28,652
Amortization of goodwill - - - - - - - - - -
Other operating expenses 12,166 11,151 9,857 9,913 9,668 8,714 8,871 8,542 43,087 35,795
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 94,866 92,576 90,174 89,929 90,537 87,530 87,498 86,238 367,545 351,803
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX $22,772 $24,281 $24,831 $23,266 $21,203 $23,461 $21,262 $21,374 $95,150 $87,300
========================================================================================================= ==========================
PROTECTIVE LIFE CORPORATION
Life Marketing and Annuities Data
(Dollars in thousands)
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
INDIVIDUAL LIFE
SALES BY PRODUCT
Term $ 21,904 $ 32,718 $ 35,168 $ 30,666 $ 24,688 $ 22,413 $ 21,085 $ 17,734 $ 120,456 $ 85,920
U/L 8,609 9,642 10,824 11,619 10,353 10,710 11,272 24,304 40,694 56,639
VUL 876 1,105 1,245 1,332 1,125 1,474 1,492 1,145 4,558 5,236
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 36,166 $ 34,597 $ 33,849 $ 43,183 $ 165,708 $ 147,795
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
SALES BY DISTRIBUTION
RSM System $ 10,622 $ 12,382 $ 13,252 $ 13,951 $ 12,741 $ 12,569 $ 12,616 $ 18,000 $ 50,207 $ 55,926
Empire General 14,307 22,672 26,081 21,678 16,733 15,027 14,130 13,171 84,738 59,061
Stockbrokers 4,500 6,746 6,634 7,053 6,059 6,780 7,018 11,854 24,933 31,711
Direct Response 1,950 1,665 1,272 936 633 221 85 158 5,823 1,097
All Other 10 0 (2) (1) 0 0 0 0 7 0
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 31,389 $ 43,465 $ 47,237 $ 43,617 $ 36,166 $ 34,597 $ 33,849 $ 43,183 $ 165,708 $ 147,795
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
WEST COAST
SALES BY PRODUCT
Term $ 19,306 $ 20,276 $ 21,204 $ 24,093 $ 22,148 $ 19,794 $ 19,961 $ 24,060 $ 84,879 $ 85,963
U/L 7,627 11,004 9,274 11,153 7,344 8,556 5,058 6,972 39,058 27,930
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 29,492 $ 28,350 $ 25,019 $ 31,032 $ 123,937 $ 113,893
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
SALES BY DISTRIBUTION
BGA $ 22,420 $ 24,362 $ 26,346 $ 28,845 $ 26,014 $ 24,553 $ 23,678 $ 27,868 $ 101,973 $ 102,113
BOLI 4,513 6,918 4,132 6,401 3,478 3,797 1,341 3,164 21,964 11,780
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 26,933 $ 31,280 $ 30,478 $ 35,246 $ 29,492 $ 28,350 $ 25,019 $ 31,032 $ 123,937 $ 113,893
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
ANNUITIES
SALES
Variable Annuity $ 102,525 $ 94,336 $ 87,459 $ 66,270 $ 61,724 $ 63,317 $ 74,231 $ 83,654 $ 350,590 $ 282,926
Immediate Annuity 26,839 26,092 12,709 16,379 10,966 33,576 23,216 150,179 82,019 217,937
Market Value Adjusted Annuity 49,529 21,326 3,239 7,403 5,128 74,729 83,175 62,201 81,497 225,233
-------------------------------------------------------------------------------------------------------------------------- -------------------------------
Total $ 178,893 $ 141,754 $ 103,407 $ 90,052 $ 77,818 $ 171,622 $ 180,622 $ 296,034 $ 514,106 $ 726,096
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
PRETAX OPERATING INCOME
Variable Annuity $ (211) $ (123) $ 232 $ 672 $ 625 $ 3,492 $ 2,901 $ 3,417 $ 570 $ 10,435
Fixed Annuity 3,926 3,114 2,401 3,362 2,188 1,483 1,107 1,254 12,803 6,032
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 2,813 $ 4,975 $ 4,008 $ 4,671 $ 13,373 $ 16,467
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE
VA Fixed Annuity $ 363,741 $ 357,937 $ 334,644 $ 305,203 $ 275,462 $ 269,353 $ 269,363 $ 262,295
VA Separate Account Annuity 1,366,633 1,611,964 1,714,999 1,940,877 2,012,396 2,026,781 2,023,325 2,222,102
--------------------------------------------------------------------------------------------------------------------------
Sub-total 1,730,374 1,969,901 2,049,643 2,246,080 2,287,858 2,296,134 2,292,688 2,484,397
Fixed Annuity 3,005,278 2,989,964 2,904,016 2,900,002 2,877,159 2,930,544 2,986,179 3,173,862
--------------------------------------------------------------------------------------------------------------------------
Total $4,735,652 $4,959,865 $4,953,659 $5,146,082 $5,165,017 $5,226,678 $5,278,867 $5,658,259
--------------------------------------------------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION
Annuities, Stable Value Contracts, and Asset Protection
Quarterly Earnings Trends (Dollars in thousands)
(Unaudited)
--------------------------------------------------------------------------------------------------------- --------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
--------------------------------------------------------------------------------------------------------- --------------------------
ANNUITIES
REVENUES
Gross Premiums and Policy Fees $ 5,883 $ 6,387 $ 6,864 $ 7,131 $ 7,628 $ 7,594 $ 7,370 $ 7,749 $26,265 $30,341
Reinsurance Ceded - - - - - - - - - -
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 5,883 6,387 6,864 7,131 7,628 7,594 7,370 7,749 26,265 30,341
Net investment income 58,442 57,780 54,660 53,450 51,588 51,523 52,854 54,923 224,332 210,888
RIGL - All Other Investments 27 11,206 8,582 2,918 6,004 290 3,524 55 22,733 9,873
Other income 1,941 2,075 2,368 2,361 1,785 1,555 1,556 2,108 8,745 7,004
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 66,293 77,448 72,474 65,860 67,005 60,962 65,304 64,835 282,075 258,106
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 52,986 51,339 48,385 45,245 46,046 44,456 46,526 46,243 197,955 183,271
Amortization of deferred policy acquisition costs 4,386 13,967 13,508 6,335 9,057 7,119 8,459 7,636 38,196 32,271
Amortization of goodwill - - - - - - - - - -
Other operating expenses 5,910 7,312 7,533 8,010 6,745 4,673 5,456 6,285 28,765 23,159
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 63,282 72,618 69,426 59,590 61,848 56,248 60,441 60,164 264,916 238,701
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX 3,011 4,830 3,048 6,270 5,157 4,714 4,863 4,671 17,159 19,405
Adjustments to Reconcile to Operating Income:
Less: RIGL - All Other Investments 27 11,206 8,582 2,918 6,004 290 3,524 55 22,733 9,873
Add back: Related amortization of deferred policy acquisition costs 731 9,367 8,167 682 3,660 551 2,669 55 18,947 6,935
--------------------------------------------------------------------------------------------------------- --------------------------
PRETAX OPERATING INCOME $ 3,715 $ 2,991 $ 2,633 $ 4,034 $ 2,813 $ 4,975 $ 4,008 $ 4,671 $13,373 $16,467
========================================================================================================= ==========================
STABLE VALUE CONTRACTS
REVENUES
Gross Premiums and Policy Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Reinsurance Ceded - - - - - - - - - -
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees - - - - - - - - - -
Net investment income 58,532 59,090 56,441 59,041 64,033 66,666 66,472 71,013 233,104 268,184
RIGL - Derivatives (661) 940 523 173 271 135 700 53 975 1,159
RIGL - All Other Investments (6,041) 3,320 9,222 2,280 3,608 1,887 6,292 279 8,781 12,066
Other income - - - - - - - - - -
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 51,830 63,350 66,186 61,494 67,912 68,688 73,464 71,345 242,860 281,409
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 47,765 46,957 45,374 46,469 49,769 50,720 50,301 54,378 186,565 205,168
Amortization of deferred policy acquisition costs 599 519 542 619 761 803 894 1,022 2,279 3,480
Amortization of goodwill - - - - - - - - - -
Other operating expenses 1,030 1,516 1,002 1,801 1,804 1,217 1,964 1,392 5,349 6,377
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 49,394 48,992 46,918 48,889 52,334 52,740 53,159 56,792 194,193 215,025
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX 2,436 14,358 19,268 12,605 15,578 15,948 20,305 14,553 48,667 66,384
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives (661) 940 523 173 271 135 700 53 975 1,159
Less: RIGL-All Other Investments (6,041) 3,320 9,222 2,280 3,608 1,887 6,292 279 8,781 12,066
--------------------------------------------------------------------------------------------------------- --------------------------
PRETAX OPERATING INCOME $ 9,138 $10,098 $ 9,523 $10,152 $11,699 $13,926 $13,313 $14,221 $38,911 $53,159
========================================================================================================= ==========================
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees $105,924 $104,153 $112,850 $118,276 $118,179 $115,354 $120,558 $105,190 $441,203 $459,281
Reinsurance Ceded (44,152) (44,026) (52,128) (56,128) (63,106) (62,120) (68,755) (57,362) (196,434) (251,343)
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 61,772 60,127 60,722 62,148 55,073 53,234 51,803 47,828 244,769 207,938
Net investment income 9,246 9,132 9,484 8,790 7,541 7,500 7,922 7,976 36,652 30,939
Realized investment gains (losses) - - - - - - - - - -
Other income 6,971 18,167 8,833 8,267 9,062 9,117 9,565 8,732 42,238 36,476
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 77,989 87,426 79,039 79,205 71,676 69,851 69,290 64,536 323,659 275,353
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 36,458 33,868 34,676 37,164 32,199 33,363 29,226 26,219 142,166 121,007
Amortization of deferred policy acquisition costs 18,483 21,425 19,838 20,574 19,956 17,522 20,042 14,753 80,320 72,273
Amortization of goodwill - - - - - - - - - -
Other operating expenses 21,806 22,372 19,413 17,389 14,918 14,595 14,597 18,884 80,980 62,994
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 76,747 77,665 73,927 75,127 67,073 65,480 63,865 59,856 303,466 256,274
--------------------------------------------------------------------------------------------------------- --------------------------
---------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAX $ 1,242 $ 9,761 $ 5,112 $ 4,078 $ 4,603 $ 4,371 $ 5,425 $ 4,680 $20,193 $19,079
========================================================================================================= ==========================
PROTECTIVE LIFE CORPORATION
Stable Value Contracts and Asset Protection Data
(Dollars in thousands)
(Unaudited)
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
STABLE VALUE CONTRACTS
SALES
GIC $ 219,000 $ 30,000 $ 24,500 $ 1,500 $ - $ 39,000 $ 15,000 $ 5,000 $ 275,000 $ 59,000
GFA - Direct Institutional 25,000 - - 352,900 - 960 - 66,060 377,900 67,020
GFA - Non-Registered 200,000 100,000 100,000 105,000 - - - - 505,000 -
GFA - Registered - Institutional - - - 450,000 300,000 - 625,000 - 450,000 925,000
GFA - Registered - Retail - - - - 221,500 68,250 135,520 106,290 - 531,560
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 444,000 $ 130,000 $ 124,500 $ 909,400 $ 521,500 $ 108,210 $ 775,520 $ 177,350 $1,607,900 $1,582,580
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
DEPOSIT BALANCE
Quarter End Balance $4,106,685 $4,214,470 $4,135,212 $4,676,531 $4,923,231 $4,921,166 $5,143,367 $5,562,997
Average Daily Balance $4,035,367 $4,153,071 $4,147,034 $4,424,234 $4,851,592 $5,062,014 $5,112,019 $5,455,427 $4,191,182 $5,122,170
OPERATING SPREAD 0.93% 1.01% 0.95% 0.95% 1.00% 1.13% 1.07% 1.07% 0.96% 1.07%
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
ASSET PROTECTION
SALES
Credit $ 45,642 $ 51,168 $ 53,418 $ 48,024 $ 51,246 $ 59,035 $ 59,543 $ 47,761 $ 198,252 $ 217,585
Service Contracts 38,709 53,869 59,421 52,811 44,275 54,861 56,627 47,220 204,810 202,983
Other 17,386 23,650 18,410 9,905 8,151 8,941 8,883 13,780 69,351 39,755
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
Total $ 101,737 $ 128,687 $ 131,249 $ 110,740 $ 103,672 $ 122,837 $ 125,053 $ 108,761 $ 472,413 $ 460,323
-------------------------------------------------------------------------------------------------------------------------- ------------------------------
PROTECTIVE LIFE CORPORATION
Corporate & Other Segment - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)
--------------------------------------------------------------------------------------------------------- --------------------------
2003 2003 2003 2003 2004 2004 2004 2004 12 MOS 12 MOS
1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 2003 2004
--------------------------------------------------------------------------------------------------------- --------------------------
REVENUES
Gross Premiums and Policy Fees $15,677 $13,973 $13,563 $13,294 $12,534 $12,550 $11,919 $11,373 $56,507 $48,376
Reinsurance Ceded (2,601) (810) (589) (229) (346) (337) (191) (143) (4,229) (1,017)
--------------------------------------------------------------------------------------------------------- --------------------------
Net Premiums and Policy Fees 13,076 13,163 12,974 13,065 12,188 12,213 11,728 11,230 52,278 47,359
Net investment income 12,647 16,707 8,627 21,302 24,851 22,577 34,356 21,730 59,283 103,514
RIGL - Derivatives (4,219) 3,394 (9,571) 21,971 4,812 8,605 5,587 (572) 11,575 18,432
RIGL - All Other Investments 4,836 14,998 9,238 (2,522) 7,015 (3,100) (1,635) 4,086 26,550 6,366
Other income 1,520 1,216 1,686 2,276 4,712 4,075 3,994 4,582 6,698 17,363
--------------------------------------------------------------------------------------------------------- --------------------------
Total Revenues 27,860 49,478 22,954 56,092 53,578 44,370 54,030 41,056 156,384 193,034
--------------------------------------------------------------------------------------------------------- --------------------------
BENEFITS & EXPENSES
Benefits and settlement expenses 12,223 37,942 12,217 16,953 14,256 15,898 12,470 16,427 79,335 59,051
Amortization of deferred policy acquisition costs 1,326 1,385 1,748 1,085 1,090 1,207 1,101 1,086 5,544 4,484
Amortization of goodwill - - - - - - - - - -
Other operating expenses 18,368 20,205 21,957 25,889 26,975 23,986 28,866 22,536 86,419 102,363
--------------------------------------------------------------------------------------------------------- --------------------------
Total Benefits and Expenses 31,917 59,532 35,922 43,927 42,321 41,091 42,437 40,049 171,298 165,898
--------------------------------------------------------------------------------------------------------- --------------------------
INCOME BEFORE INCOME TAX (4,057) (10,054) (12,968) 12,165 11,257 3,279 11,593 1,007 (14,914) 27,136
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives (4,219) 3,394 (9,571) 21,971 4,812 8,605 5,587 (572) 11,575 18,432
Less: RIGL-All Other Investments 4,836 14,998 9,238 (2,522) 7,015 (3,100) (1,635) 4,086 26,550 6,366
Add back: Derivative gains related to corporate debt and investments 5,634 5,885 4,786 4,782 4,875 5,354 4,684 4,309 21,087 19,222
--------------------------------------------------------------------------------------------------------- --------------------------
PRETAX OPERATING INCOME $ 960 $ (22,561) $ (7,849) $ (2,502) $ 4,305 $ 3,128 $12,325 $ 1,802 $ (31,952) $21,560
========================================================================================================= ==========================