Protective Life 8K Protective Reports Second Quarter 2013 | PLPDZ 1 Aug 13

Exhibit 99.2

Draft 7/31/2013

Quarterly Financial Highlights

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR		1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012		2013			2013			2012		2013

Pre-tax Operating Income (Loss) (1)

Life Marketing	$	30,348		$	28,673		$	15,642	$	23,707		$	24,673		$	60,717	$	48,380
Acquisitions	43,615			46,155			42,191		34,377			29,435			82,714		63,812
Annuities	28,553			9,408			45,348		43,398			36,382			64,336		79,780
Stable Value Products	15,958			13,050			18,675		17,844			22,464			28,604		40,308
Asset Protection	6,479			4,150			859		6,081			7,384			11,445		13,465
Corporate & Other	(25,397		)	(6,614		)	928		(18,332		)	(2,483		)	2,483		(20,815		)
Total Pre-tax Operating Income	$	99,556		$	94,822		$	123,643	$	107,075		$	117,855		$	250,299	$	224,930

Balance Sheet Data

Total Assets	$	54,195,024		$	55,912,100		$	57,384,672	$	58,573,487		$	58,162,886
Total Protective Life Corporation’s Shareowners’ Equity	$	4,147,234		$	4,565,855		$	4,615,183	$	4,541,292		$	3,837,991
Total Protective Life Corporation’s Shareowners’ Equity (excluding accumulated other comprehensive income (loss)) (2)	$	2,828,898		$	2,849,089		$	2,878,461	$	2,941,969		$	3,036,797

Stock Data

Closing Price	$	29.41		$	26.21		$	28.58	$	35.80		$	38.41
Average Shares Outstanding
Basic	81,639,756			80,662,745			79,652,495		79,139,392			79,404,770			81,985,649		79,272,814
Diluted	83,243,703			82,406,103			81,339,803		80,706,744			81,087,238			83,583,025		80,898,042

(1) “Pre-tax Operating Income (Loss)” is a non-GAAP financial measure. “Income (loss) Before Income Tax” is a GAAP financial measure to which “Pre-tax Operating Income” may be compared.

See Page 6 for a reconciliation of “Pre-tax Operating Income” to “Income (loss) Before Income Tax”.

(2) “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” is a non-GAAP financial measure. “Total Protective Life Corporation’s Shareowners’ equity” is a GAAP financial measure to which “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” may be compared.

See Page 5 for a reconciliation of “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” to “Total Protective Life Corporation’s Shareowners’ equity”.

Draft 7/31/2013

Financial Strength Ratings as of June 30, 2013

	A.M. Best	Fitch	Standard & Poor’s	Moody’s
Legal Entity

Insurance companies:
Protective Life Insurance Company	A+	A	AA-	A2
West Coast Life Insurance Company	A+	A	AA-	A2
Protective Life and Annuity Insurance Company	A+	A	AA-	—
Lyndon Property Insurance Company	A-	—	—	—

Draft 7/31/2013

Consolidated Statements of Income

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	711,429		$	684,939		$	721,605		$	726,847		$	756,331		$	1,407,734		$	1,483,178
Reinsurance ceded	(344,673		)	(321,059		)	(375,546		)	(335,350		)	(390,490		)	(649,231		)	(725,840		)
Net premiums and policy fees	366,756			363,880			346,059			391,497			365,841			758,503			757,338
Net investment income	456,222			467,944			476,045			457,634			466,220			918,343			923,854
RIGL - derivatives	(48,268		)	(134,222		)	(26,081		)	7,385			143,881			(78,177		)	151,266
RIGL - all other investments	65,593			122,555			7,161			(4,145		)	(109,978		)	101,319			(114,123		)

OTTI losses	(13,670		)	(1,676		)	(16,422		)	(1,340		)	(1,789		)	(48,090		)	(3,129		)
Portion recognized in OCI (before taxes)	62			(6,880		)	(1,536		)	(3,244		)	(2,211		)	15,718			(5,455		)
Net impairment losses recognized in earnings	(13,608		)	(8,556		)	(17,958		)	(4,584		)	(4,000		)	(32,372		)	(8,584		)
Other income	81,480			81,190			84,633			85,027			94,392			192,740			179,419
Total revenues	908,175			892,791			869,859			932,814			956,356			1,860,356			1,889,170

BENEFITS & EXPENSES
Benefits and settlement expenses	568,522			629,945			537,944			581,880			557,866			1,158,151			1,139,746
Amortization of deferred policy acquisition costs and value of business acquired	67,188			14,011			65,530			52,239			74,946			124,024			127,185
Other operating expenses	124,530			118,964			120,406			138,061			123,661			240,785			261,722
Interest expense - subsidiaries	6,098			6,253			10,336			11,105			11,511			12,207			22,616
Interest expense - holding company - other debt	23,298			23,731			23,481			23,434			22,891			46,670			46,325
Interest expense - holding company - subordinated debt	10,852			8,901			8,443			8,468			8,468			20,253			16,936
Total benefits and expenses	800,488			801,805			766,140			815,187			799,343			1,602,090			1,614,530

INCOME BEFORE INCOME TAX	107,687			90,986			103,719			117,627			157,013			258,266			274,640
Income tax expense	31,532			30,506			36,923			39,336			53,814			83,090			93,150
NET INCOME	76,155			60,480			66,796			78,291			103,199			175,176			181,490
Less: Net income (loss) attributable to noncontrolling interests	—			—			—			—			—			—			—
NET INCOME AVAILABLE TO PLC’S COMMON SHAREOWNERS	$	76,155		$	60,480		$	66,796		$	78,291		$	103,199		$	175,176		$	181,490

PER SHARE DATA FOR QUARTER
Operating income - diluted (1)	$	0.85		$	0.76		$	0.98		$	0.89		$	0.96
RIGL - derivatives	(0.31		)	(0.98		)	(0.12		)	0.16			1.27
RIGL - all other investments	0.37			0.95			(0.04		)	(0.08		)	(0.96		)
Net income available to PLC’s common shareowners-diluted	$	0.91		$	0.73		$	0.82		$	0.97		$	1.27
Average shares outstanding-diluted	83,243,703			82,406,103			81,339,803			80,706,744			81,087,238
Dividends paid	$	0.18		$	0.18		$	0.18		$	0.18		$	0.20

PER SHARE DATA FOR YTD
Operating income - diluted (1)	$	2.04		$	2.80		$	3.78		$	0.89		$	1.84
RIGL - derivatives	(0.49		)	(1.46		)	(1.59		)	0.16			1.44
RIGL - all other investments	0.55			1.49			1.47			(0.08		)	(1.04		)
Net income available to PLC’s common shareowners - diluted	$	2.10		$	2.83		$	3.66		$	0.97		$	2.24
Average shares outstanding - diluted	83,583,025			83,187,854			82,723,016			80,706,744			80,898,042
Dividends paid	$	0.34		$	0.52		$	0.70		$	0.18		$	0.38

(1) “Operating Income” is a non-GAAP financial measure. “Net income available to PLC’s common shareowners” is a GAAP financial measure to which “Operating Income” may be compared.

Draft 7/31/2013

Consolidated Balance Sheets

(Dollars In Thousands)	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
(Unaudited)	2012		2012		2012		2013		2013
ASSETS

Fixed maturities, at fair value	$	28,850,496	$	29,607,238	$	29,787,959	$	30,065,491	$	28,922,966
Fixed maturities, at amortized cost	—		—		300,000		315,000		335,000
Equity securities	350,503		373,552		411,786		415,176		446,518
Mortgage loans	5,203,999		5,096,080		4,950,201		4,835,917		4,773,709
Investment real estate	20,582		19,858		19,816		18,952		16,178
Policy loans	870,775		869,607		865,391		862,202		855,780
Other long-term investments	333,358		347,065		361,837		348,394		429,987
Long-term investments	35,629,713		36,313,400		36,696,990		36,861,132		35,780,138
Short-term investments	89,495		110,684		217,812		161,506		172,011
Total investments	35,719,208		36,424,084		36,914,802		37,022,638		35,952,149
Cash	219,877		206,012		368,801		275,103		255,712
Accrued investment income	354,282		360,024		357,368		361,463		365,483
Accounts and premiums receivable	111,362		104,037		85,500		104,539		96,819
Reinsurance receivable	5,716,333		5,753,980		5,805,401		5,842,124		5,832,194
Deferred policy acquisition costs and value of business acquired	3,208,319		3,208,227		3,239,519		3,262,029		3,414,988
Goodwill	110,110		109,335		108,561		107,786		107,012
Property and equipment, net	48,307		48,321		47,607		48,590		49,492
Other assets	164,354		189,086		262,052		272,760		305,752
Current/Deferred income tax	62,316		55,518		30,827		—		—
Assets related to separate accounts
Variable annuity	7,949,926		8,895,947		9,601,417		10,670,833		11,162,856
Variable universal life	530,630		557,529		562,817		605,622		620,429

TOTAL ASSETS	$	54,195,024	$	55,912,100	$	57,384,672	$	58,573,487	$	58,162,886

Draft 7/31/2013

Consolidated Balance Sheets - Continued

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR
(Unaudited)	2012			2012			2012			2013			2013

LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims	$	21,165,796		$	21,400,351		$	21,626,386		$	21,793,320		$	21,932,062
Unearned premiums	1,301,537			1,367,241			1,396,026			1,426,496			1,454,003
Stable value product deposits	2,676,312			2,328,237			2,510,559			2,544,609			2,579,172
Annuity deposits	10,774,666			10,751,652			10,658,463			10,524,393			10,509,829
Other policyholders’ funds	539,364			553,262			566,985			569,533			577,821
Repurchase program borrowings	200,000			280,000			150,000			300,000			340,000
Other liabilities	1,157,689			1,306,298			1,434,604			1,375,962			1,225,042
Deferred income taxes	1,430,027			1,668,885			1,736,389			1,690,052			1,318,175
Income tax payable	—			—			—			4,782			13
Non-recourse funding obligations	297,000			297,000			586,000			596,000			604,900
Debt	1,510,000			1,400,000			1,400,000			1,390,000			1,460,000
Subordinated debt securities	515,593			540,593			540,593			540,593			540,593
Liabilities related to separate accounts
Variable annuity	7,949,926			8,895,947			9,601,417			10,670,833			11,162,856
Variable universal life	530,630			557,529			562,817			605,622			620,429
TOTAL LIABILITIES	50,048,540			51,346,995			52,770,239			54,032,195			54,324,895

SHAREOWNERS’ EQUITY
Common stock	44,388			44,388			44,388			44,388			44,388
Additional paid-in-capital	603,045			603,083			606,369			599,514			606,523
Treasury stock	(157,412		)	(183,330		)	(209,840		)	(203,698		)	(203,385		)
Retained earnings	2,338,877			2,384,948			2,437,544			2,501,765			2,589,271
Accumulated other comprehensive income (loss)	1,318,336			1,716,766			1,736,722			1,599,323			801,194
TOTAL PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY	4,147,234			4,565,855			4,615,183			4,541,292			3,837,991
Noncontrolling interest	(750		)	(750		)	(750		)	—			—
TOTAL EQUITY	4,146,484			4,565,105			4,614,433			4,541,292			3,837,991
TOTAL LIABILITIES AND SHAREOWNERS’ EQUITY	$	54,195,024		$	55,912,100		$	57,384,672		$	58,573,487		$	58,162,886

PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY PER SHARE
Total Protective Life Corporation’s Shareowners’ Equity	$	51.81		$	57.70		$	59.06		$	57.89		$	48.91
Less: Accumulated other comprehensive income (loss)	16.47			21.70			22.22			20.39			10.21
Excluding accumulated other comprehensive income (loss) (1)	$	35.34		$	36.00		$	36.84		$	37.50		$	38.70

Total Protective Life Corporation’s Shareowners’ Equity	$	4,147,234		$	4,565,855		$	4,615,183		$	4,541,292		$	3,837,991
Less: Accumulated other comprehensive income (loss)	1,318,336			1,716,766			1,736,722			1,599,323			801,194
Total Protective Life Corporation’s Shareowners’ Equity (excluding accumulated other comprehensive income (loss)) (1)	$	2,828,898		$	2,849,089		$	2,878,461		$	2,941,969		$	3,036,797

Common shares outstanding	80,046,258			79,136,858			78,137,493			78,449,071			78,465,053
Treasury Stock shares	8,730,702			9,640,102			10,639,467			10,327,889			10,311,907

(1) “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” is a non-GAAP financial measure. “Total Protective Life Corporation’s Shareowners’ equity” is a GAAP financial measure to which “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” may be compared.

Draft 7/31/2013

Calculation of Operating Earnings Per Share

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

CALCULATION OF NET INCOME PER SHARE

Net income available to PLC’s common shareowners	$	76,155		$	60,480		$	66,796		$	78,291		$	103,199		$	175,176		$	181,490

Average shares outstanding - basic	81,639,756			80,662,745			79,652,495			79,139,392			79,404,770			81,985,649			79,272,814
Average shares outstanding - diluted	83,243,703			82,406,103			81,339,803			80,706,744			81,087,238			83,583,025			80,898,042

Net income available to PLC’s common shareowners per share-basic	$	0.93		$	0.75		$	0.84		$	0.99		$	1.30		$	2.14		$	2.29
Net income available to PLC’s common shareowners per share-diluted	$	0.91		$	0.73		$	0.82		$	0.97		$	1.27		$	2.10		$	2.24

Income from continuing operations	$	76,155		$	60,480		$	66,796		$	78,291		$	103,199		$	175,176		$	181,490

EPS (basic)	$	0.93		$	0.75		$	0.84		$	0.99		$	1.30		$	2.14		$	2.29
EPS (diluted)	$	0.91		$	0.73		$	0.82		$	0.97		$	1.27		$	2.10		$	2.24

CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE

RIGL - derivatives	$	(48,268	)	$	(134,222	)	$	(26,081	)	$	7,385		$	143,881		$	(78,177	)	$	151,266
VA GMWB economic cost	8,355			9,641			11,265			12,923			14,588			15,595			27,511
RIGL - all other investments	51,985			113,999			(10,797		)	(8,729		)	(113,978		)	68,947			(122,707		)
Related amortization of DAC & VOBA	(3,941		)	6,746			5,689			(1,027		)	(5,333		)	1,602			(6,360		)
	8,131			(3,836		)	(19,924		)	10,552			39,158			7,967			49,710
Tax effect	(2,845		)	1,342			6,974			(3,693		)	(13,706		)	(2,787		)	(17,399		)
	$	5,286		$	(2,494	)	$	(12,950	)	$	6,859		$	25,452		$	5,180		$	32,311

RIGL - derivatives per share-diluted	$	(0.31	)	$	(0.98	)	$	(0.12	)	$	0.16		$	1.27		$	(0.49	)	$	1.44
RIGL - all other investments per share-diluted	$	0.37		$	0.95		$	(0.04	)	$	(0.08	)	$	(0.96	)	$	0.55		$	(1.04	)

OPERATING INCOME PER SHARE (1)

Net income available to PLC’s common shareowners per share-diluted	$	0.91		$	0.73		$	0.82		$	0.97		$	1.27		$	2.10		$	2.24
Less: RIGL - derivatives per share-diluted	(0.31		)	(0.98		)	(0.12		)	0.16			1.27			(0.49		)	1.44
Less: RIGL - all other investments per share-diluted	0.37			0.95			(0.04		)	(0.08		)	(0.96		)	0.55			(1.04		)
Operating income per share-diluted	$	0.85		$	0.76		$	0.98		$	0.89		$	0.96		$	2.04		$	1.84

NET OPERATING INCOME (1)

Net income available to PLC’s common shareowners	$	76,155		$	60,480		$	66,796		$	78,291		$	103,199		$	175,176		$	181,490
Less: RIGL - derivatives net of tax	(25,943		)	(80,978		)	(9,630		)	13,200			103,004			(40,678		)	116,204
Less: RIGL - all other investments net of tax and amortization	31,229			78,484			(3,320		)	(6,341		)	(77,552		)	45,858			(83,893		)
Net operating income	$	70,869		$	62,974		$	79,746		$	71,432		$	77,747		$	169,996		$	149,179

PRE-TAX OPERATING INCOME (2)

Income before income tax and discontinued operations	$	107,687		$	90,986		$	103,719		$	117,627		$	157,013		$	258,266		$	274,640
Less: RIGL - derivatives	(48,268		)	(134,222		)	(26,081		)	7,385			143,881			(78,177		)	151,266
Less: VA GMWB economic cost	8,355			9,641			11,265			12,923			14,588			15,595			27,511
Less: RIGL - all other investments	51,985			113,999			(10,797		)	(8,729		)	(113,978		)	68,947			(122,707		)
Less: Related amortization of DAC & VOBA	(3,941		)	6,746			5,689			(1,027		)	(5,333		)	1,602			(6,360		)
Pre-tax operating income	$	99,556		$	94,822		$	123,643		$	107,075		$	117,855		$	250,299		$	224,930

(1) “Net Operating Income” and “Operating Income Per Share” are non-GAAP financial measures. “Net Income available to PLC’s common shareowners” and “Net Income available to PLC’s common shareowners Per Share” are GAAP financial measures to which “Net Operating Income” and “Operating Income Per Share” may be compared.

(2) “Pre-tax Operating Income” is a non-GAAP financial measure. “Income Before Income Tax” is a GAAP financial measure to which “Pre-tax Operating Income” may be compared.

Draft 7/31/2013

Invested Asset Summary

(Dollars In Millions)	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
(Unaudited)	2012		2012		2012		2013		2013

Total Portfolio

Fixed Maturities	$	28,850.5	$	29,607.2	$	30,088.0	$	30,380.5	$	29,258.0	81	%
Mortgage Loans	5,204.0		5,096.1		4,950.2		4,835.9		4,773.7		13	%
Investment Real Estate	20.6		19.8		19.8		18.9		16.2		0	%
Equity Securities	350.5		373.6		411.8		415.2		446.5		1	%
Policy Loans	870.8		869.6		865.4		862.2		855.8		3	%
Short-Term Investments	89.5		110.7		217.8		161.5		172.0		1	%
Other Long-Term Investments	333.3		347.1		361.8		348.4		430.0		1	%
Total Invested Assets	$	35,719.2	$	36,424.1	$	36,914.8	$	37,022.6	$	35,952.2	100	%

Draft 7/31/2013

Invested Asset Summary - Fixed Income

(Dollars In Millions)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR
(Unaudited)	2012			2012			2012			2013			2013

Fixed Income

Corporate Bonds	$	20,903.8		$	21,580.4		$	22,054.4		$	22,417.5		$	21,610.4		74	%
Residential Mortgage-Backed Securities	2,501.3			2,393.9			2,197.1			2,072.4			1,907.1			7	%
Commercial Mortgage-Backed Securities	938.0			1,023.6			1,040.9			1,093.2			1,113.8			4	%
Other Asset-Backed Securities	1,056.3			1,091.7			1,133.0			1,109.0			1,181.4			4	%
U.S. Government-related Securities	1,629.2			1,659.9			1,475.8			1,503.8			1,382.5			5	%
Other Government-related Securities	166.3			160.2			164.2			152.2			122.9			0	%
States, Municipals and Political Subdivisions	1,655.6			1,697.5			1,722.6			1,717.4			1,604.9			5	%
Other	—			—			300.0			315.0			335.0			1	%
Total Fixed Income Portfolio	$	28,850.5		$	29,607.2		$	30,088.0		$	30,380.5		$	29,258.0		100	%

Fixed Income - Quality

AAA	16.2		%	15.9		%	14.6		%	14.4		%	14.4		%
AA	7.1		%	7.2		%	7.2		%	7.0		%	6.9		%
A	30.3		%	30.8		%	30.8		%	31.5		%	30.9		%
BBB	39.2		%	39.1		%	39.7		%	39.6		%	40.6		%
Below investment grade	7.2		%	7.0		%	6.7		%	6.5		%	6.1		%
Not rated	0.0		%	0.0		%	1.0		%	1.0		%	1.1		%
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Note: Prior period ratings and investment classifications have been restated to be consistent with current quarter presentation.

Draft 7/31/2013

Fixed Maturities by NAIC Rating

STAT Carry Value % of Total

	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
(Unaudited)	2012		2012		2012		2013		2013

NAIC Rating
1	56.44	%	56.82	%	56.77	%	56.91	%	56.17	%
2	38.58	%	38.16	%	38.52	%	38.74	%	39.67	%
3	3.21	%	3.32	%	3.23	%	3.22	%	3.04	%
4	0.76	%	0.70	%	0.62	%	0.58	%	0.64	%
5	0.94	%	0.91	%	0.70	%	0.46	%	0.39	%
6	0.07	%	0.09	%	0.16	%	0.09	%	0.09	%

	100.00	%	100.00	%	100.00	%	100.00	%	100.00	%

Below investment grade (using NAIC 3-6)	4.98	%	5.02	%	4.71	%	4.35	%	4.16	%

Note: NAIC Ratings reflect statutory carrying values

Draft 7/31/2013

Invested Asset Summary - Mortgages

(Dollars In Millions)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR
(Unaudited)	2012			2012			2012			2013			2013

Mortgage Loans - Type

Retail	66.4		%	68.0		%	67.3		%	68.0		%	67.8		%
Apartments	10.7		%	8.9		%	9.5		%	8.7		%	9.0		%
Office Buildings	13.6		%	13.6		%	13.7		%	13.9		%	13.8		%
Warehouses	7.3		%	7.3		%	7.4		%	7.3		%	7.4		%
Miscellaneous	2.0		%	2.2		%	2.1		%	2.1		%	2.0		%
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Delinquent Loans & Foreclosed Properties

60 Days Past Due	$	30.1		$	1.6		$	2.3		$	1.7		$	3.0
90 Days Past Due	11.3			21.8			17.2			19.5			14.6
Foreclosed Real Estate	2.7			2.4			4.4			—			—
	$	44.1		$	25.8		$	23.9		$	21.2		$	17.6	(1)

% of Commercial Mortgage Loan Portfolio	0.8		%	0.5		%	0.5		%	0.4		%	0.4		%

(1) Includes $2.2 million of nonperforming loans subject to a pooling and servicing agreement as of June 30, 2013.

Draft 7/31/2013

Invested Asset Summary - Trading Portfolios

(Dollars In Millions)	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
(Unaudited)	2012		2012		2012		2013		2013

Trading Portfolio Composition (excl. Modco Trading Portfolio)

Rating
AAA	$	1.3	$	0.9	$	0.5	$	0.1	$	—
AA	—		—		—		—		—
A	—		—		—		—		—
BBB	—		—		—		—		—
Below investment grade	17.2		15.4		14.1		12.8		11.0
Total	$	18.5	$	16.3	$	14.6	$	12.9	$	11.0

Modco Trading Portfolio

Rating
AAA	$	605.9	$	590.3	$	559.4	$	546.7	$	440.1
AA	245.5		267.6		239.8		233.2		286.0
A	799.1		801.8		801.6		828.2		847.1
BBB	1,037.7		1,055.4		1,038.9		992.5		922.8
Below investment grade	316.9		364.5		353.1		354.7		345.5
Short-term investments	43.4		56.0		118.9		110.6		91.6
Total	$	3,048.5	$	3,135.6	$	3,111.7	$	3,065.9	$	2,933.1

Note: Prior period ratings have been restated to be consistent with current quarter presentation.

Draft 7/31/2013

Invested Asset Summary - MBS - Alt-A

Mortgage-backed Securities Collateralized by Alt-A Mortgage Loans as of June 30, 2013:

(Dollars In Millions)	2009 and
(Unaudited)	Prior		2010		2011		2012		2013		Total

Estimated Fair Value of Security by Year of Security Origination

Rating
A	$	0.8	$	—	$	—	$	—	$	—	$	0.8
Below investment grade	425.5		—		—		—		—		425.5
Total mortgage-backed securities collateralized by Alt-A mortgage loans	$	426.3	$	—	$	—	$	—	$	—	$	426.3

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

Rating
A	$	—	$	—	$	—	$	—	$	—	$	—
Below investment grade	31.0		—		—		—		—		31.0
Total mortgage-backed securities collateralized by Alt-A mortgage loans	$	31.0	$	—	$	—	$	—	$	—	$	31.0

Draft 7/31/2013

Invested Asset Summary - MBS - Prime

Mortgage-backed Securities Collateralized by Prime Loans as of June 30, 2013:

(Dollars In Millions)	2009 and
(Unaudited)	Prior		2010		2011		2012			2013			Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	389.7	$	318.2	$	328.7	$	5.3		$	46.9		$	1,088.8
AA	0.3		—		—		—			—			0.3
A	27.5		—		—		—			—			27.5
BBB	6.5		—		—		—			—			6.5
Below investment grade	355.3		—		—		—			—			355.3
Total mortgage-backed securities collateralized by prime loans	$	779.3	$	318.2	$	328.7	$	5.3		$	46.9		$	1,478.4

Includes $1.1 billion of agency mortgage backed securities.

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

Rating
AAA	$	23.4	$	13.3	$	11.7	$	(0.3	)	$	(1.0	)	$	47.1
AA	—		—		—		—			—			—
A	0.6		—		—		—			—			0.6
BBB	0.7		—		—		—			—			0.7
Below investment grade	9.9		—		—		—			—			9.9
Total mortgage-backed securities collateralized by prime loans	$	34.6	$	13.3	$	11.7	$	(0.3	)	$	(1.0	)	$	58.3

Draft 7/31/2013

Invested Asset Summary - CMBS

Commercial Mortgage-backed Securities as of June 30, 2013:

(Dollars In Millions)	2009 and
(Unaudited)	Prior		2010		2011		2012			2013			Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	77.6	$	80.7	$	213.6	$	288.5		$	102.5		$	762.9
AA	—		33.2		37.1		41.2			27.8			139.3
A	44.4		33.8		83.6		13.6			19.0			194.4
BBB	17.2		—		—		—			—			17.2
Total commercial mortgage-backed securities	$	139.2	$	147.7	$	334.3	$	343.3		$	149.3		$	1,113.8

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

Rating
AAA	$	1.8	$	6.0	$	14.1	$	(11.1	)	$	(6.4	)	$	4.4
AA	—		1.9		2.1		(2.9		)	(2.4		)	(1.3		)
A	1.1		1.2		0.1		(0.7		)	(1.5		)	0.2
BBB	0.5		—		—		—			—			0.5
Total commercial mortgage-backed securities	$	3.4	$	9.1	$	16.3	$	(14.7	)	$	(10.3	)	$	3.8

Draft 7/31/2013

Invested Asset Summary - ABS(1)

Other Asset-backed Securities(1) as of June 30, 2013:

(Dollars In Millions)	2009 and
(Unaudited)	Prior			2010		2011		2012			2013			Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	518.8		$	7.1	$	26.0	$	33.7		$	2.2		$	587.8
AA	169.2			—		—		63.7			—			232.9
A	49.1			—		72.8		91.6			7.7			221.2
BBB	3.4			—		—		—			—			3.4
Below investment grade	136.1			—		—		—			—			136.1
Total other asset-backed securities	$	876.6		$	7.1	$	98.8	$	189.0		$	9.9		$	1,181.4

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

Rating
AAA	$	(16.4	)	$	0.1	$	0.9	$	(0.3	)	$	(0.1	)	$	(15.8	)
AA	(7.4		)	—		—		(0.1		)	—			(7.5		)
A	5.2			—		5.3		(0.5		)	(0.1		)	9.9
BBB	(0.1		)	—		—		—			—			(0.1		)
Below investment grade	12.3			—		—		—			—			12.3
Total other asset-backed securities	$	(6.4	)	$	0.1	$	6.2	$	(0.9	)	$	(0.2	)	$	(1.2	)

(1) Excludes Residential and Commercial mortgage-backed securities

Draft 7/31/2013

Life Marketing Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	397,645		$	379,207		$	410,105		$	418,705		$	442,338		$	785,762		$	861,043
Reinsurance ceded	(209,803		)	(190,099		)	(239,056		)	(207,662		)	(255,180		)	(402,558		)	(462,842		)
Net premiums and policy fees	187,842			189,108			171,049			211,043			187,158			383,204			398,201
Net investment income	121,283			123,647			122,507			127,248			130,054			240,309			257,302
Other income	29,966			28,280			29,709			29,335			29,809			59,120			59,144
Total operating revenues	339,091			341,035			323,265			367,626			347,021			682,633			714,647

BENEFITS & EXPENSES
Benefits and settlement expenses	251,509			305,281			243,276			280,766			256,073			506,088			536,839
Amortization of deferred policy acquisition costs and value of business acquired	19,454			(26,464		)	29,495			14,022			27,066			42,048			41,088
Other operating expenses	37,780			33,545			34,852			49,131			39,209			73,780			88,340
Total benefits and expenses	308,743			312,362			307,623			343,919			322,348			621,916			666,267

INCOME BEFORE INCOME TAX	30,348			28,673			15,642			23,707			24,673			60,717			48,380
PRE-TAX OPERATING INCOME	$	30,348		$	28,673		$	15,642		$	23,707		$	24,673		$	60,717		$	48,380

Life Marketing Key Data

	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR		6 MOS
	2012		2012		2012		2013		2013		2012		2013

SALES BY PRODUCT
Traditional	$	307	$	326	$	195	$	292	$	409	$	594	$	701
Universal life	24,142		30,779		41,216		46,995		44,181		45,104		91,176
Bank-owned life insurance	1,376		33		499		—		—		2,721		—
Total	$	25,825	$	31,138	$	41,910	$	47,287	$	44,590	$	48,419	$	91,877

SALES BY DISTRIBUTION
Independent agents	$	14,818	$	18,373	$	26,561	$	31,537	$	31,108	$	28,758	$	62,645
Stockbrokers/banks	9,191		12,315		14,491		15,303		12,920		16,167		28,223
BOLI/other	1,816		450		858		447		562		3,494		1,009
Total	$	25,825	$	31,138	$	41,910	$	47,287	$	44,590	$	48,419	$	91,877

AVERAGE LIFE INSURANCE IN-FORCE
Traditional	$	455,686,339	$	449,416,242	$	443,238,635	$	437,245,336	$	430,900,880	$	458,770,963	$	437,069,757
Universal life	76,266,740		79,452,404		84,396,938		91,692,734		101,045,737		75,085,798		92,721,338
Total	$	531,953,079	$	528,868,646	$	527,635,573	$	528,938,070	$	531,946,617	$	533,856,761	$	529,791,095

AVERAGE ACCOUNT VALUES
Universal life	$	6,393,984	$	6,466,699	$	6,608,067	$	6,726,549	$	6,866,731	$	6,362,314	$	6,737,609
Variable universal life	383,082		388,002		391,767		411,880		446,231		377,487		418,999
Total	$	6,777,066	$	6,854,701	$	6,999,834	$	7,138,429	$	7,312,962	$	6,739,801	$	7,156,608

Draft 7/31/2013

Acquisitions Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	215,672		$	207,305		$	211,945		$	208,726		$	208,194		$	427,830		$	416,920
Reinsurance ceded	(102,644		)	(99,496		)	(104,804		)	(96,605		)	(102,654		)	(182,945		)	(199,259		)
Net premiums and policy fees	113,028			107,809			107,141			112,121			105,540			244,885			217,661
Net investment income	138,692			136,466			137,055			134,669			134,686			276,813			269,355
Other income	2,240			1,397			787			1,014			1,015			3,819			2,029
Total operating revenues	253,960			245,672			244,983			247,804			241,241			525,517			489,045
RIGL - investments	55,338			107,500			(1,209		)	(14,043		)	(124,691		)	72,650			(138,734		)
RIGL - derivatives	(48,002		)	(101,622		)	8,166			16,726			145,143			(37,362		)	161,869
Total revenues	261,296			251,550			251,940			250,487			261,693			560,805			512,180

BENEFITS & EXPENSES
Benefits and settlement expenses	180,488			169,441			172,791			179,449			177,901			374,661			357,350
Amortization of deferred policy acquisition costs and value of business acquired	17,732			17,707			17,891			18,213			18,661			40,907			36,874
Other operating expenses	12,125			12,369			12,110			15,765			15,244			27,235			31,009
Operating benefits and expenses	210,345			199,517			202,792			213,427			211,806			442,803			425,233
Amortization of DAC/VOBA related to realized gains (losses) - investments	208			109			462			173			943			175			1,116
Total benefits and expenses	210,553			199,626			203,254			213,600			212,749			442,978			426,349

INCOME BEFORE INCOME TAX	50,743			51,924			48,686			36,887			48,944			117,827			85,831

Adjustments to Reconcile to Operating Income:
Less: RIGL	7,336			5,878			6,957			2,683			20,452			35,288			23,135
Less: Related amortization of DAC/VOBA	(208		)	(109		)	(462		)	(173		)	(943		)	(175		)	(1,116		)

PRE-TAX OPERATING INCOME	$	43,615		$	46,155		$	42,191		$	34,377		$	29,435		$	82,714		$	63,812

Draft 7/31/2013

Annuities Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	23,252		$	24,870		$	27,878		$	28,552		$	32,965		$	45,180		$	61,517
Reinsurance ceded	(7		)	(5		)	(1		)	—			—			(20		)	—
Net premiums and policy fees	23,245			24,865			27,877			28,552			32,965			45,160			61,517
Net investment income	124,159			123,933			130,268			118,557			116,789			250,144			235,346
RIGL - derivatives	(8,355		)	(9,641		)	(11,265		)	(12,923		)	(14,588		)	(15,595		)	(27,511		)
Other income	19,187			22,276			25,143			26,795			30,600			36,898			57,395
Total operating revenues	158,236			161,433			172,023			160,981			165,766			316,607			326,747
RIGL - investments	10,373			2,475			609			1,773			8,218			25,386			9,991
RIGL - derivatives, net of economic cost	12,983			(22,893		)	(22,461		)	2,175			12,041			(20,977		)	14,216
Total Revenues	181,592			141,015			150,171			164,929			186,025			321,016			350,954

BENEFITS & EXPENSES
Benefits and settlement expenses	88,564			107,253			83,585			80,671			82,170			178,854			162,841
Amortization of deferred policy acquisition costs and value of business acquired	16,053			19,022			15,955			10,654			15,763			25,055			26,417
Other operating expenses	25,066			25,750			27,135			26,258			31,451			48,362			57,709
Operating benefits and expenses	129,683			152,025			126,675			117,583			129,384			252,271			246,967
Amortization related to benefit and settlement expenses	(763		)	(1,124		)	198			(601		)	(255		)	856			(856		)
Amortization of DAC related to realized gains (losses) - investments	4,496			(5,731		)	(6,349		)	1,455			4,645			(2,633		)	6,100
Total benefits and expenses	133,416			145,170			120,524			118,437			133,774			250,494			252,211

INCOME (LOSS) BEFORE INCOME TAX	48,176			(4,155		)	29,647			46,492			52,251			70,522			98,743

Adjustments to Reconcile to Operating Income:
Less: RIGL - investments	10,373			2,475			609			1,773			8,218			25,386			9,991
Less: RIGL - derivatives, net of economic cost	12,983			(22,893		)	(22,461		)	2,175			12,041			(20,977		)	14,216
Less: amortization related to benefit and settlement expenses	763			1,124			(198		)	601			255			(856		)	856
Less: related amortization of DAC	(4,496		)	5,731			6,349			(1,455		)	(4,645		)	2,633			(6,100		)

PRE-TAX OPERATING INCOME	$	28,553		$	9,408		$	45,348		$	43,398		$	36,382		$	64,336		$	79,780

Annuities Key Data

	2ND QTR		3RD QTR			4TH QTR		1ST QTR		2ND QTR		6 MOS
	2012		2012			2012		2013		2013		2012		2013

SALES
Variable Annuity	$	673,338	$	761,011		$	733,228	$	579,698	$	718,884	$	1,240,746	$	1,298,582
Immediate Annuity	15,939		14,311			11,508		10,112		15,080		30,007		25,192
Single Premium Deferred Annuity	138,044		136,540			117,127		103,590		93,385		276,358		196,975
Market Value Adjusted Annuity	1,965		1,102			1,817		1,333		2,986		2,120		4,319
Fixed Indexed Annuity	103		215			214		318		26,647		392		26,965
Total	$	829,389	$	913,179		$	863,894	$	695,051	$	856,982	$	1,549,623	$	1,552,033

PRE-TAX OPERATING INCOME (LOSS)
Variable Annuity	$	8,044	$	(2,920	)	$	18,917	$	25,877	$	23,812	$	25,387	$	49,689
Fixed Annuity	20,509		12,328			26,431		17,521		12,570		38,949		30,091
Total	$	28,553	$	9,408		$	45,348	$	43,398	$	36,382	$	64,336	$	79,780

DEPOSIT BALANCE
VA Fixed Annuity	$	563,315	$	581,243		$	551,098	$	470,656	$	483,958
VA Separate Account Annuity	7,358,411		8,309,426			9,037,748		10,078,475		10,594,528
Sub-total	7,921,726		8,890,669			9,588,846		10,549,131		11,078,486
Fixed Annuity	7,958,916		7,940,514			7,904,746		7,878,568		7,865,892
Total	$	15,880,642	$	16,831,183		$	17,493,592	$	18,427,699	$	18,944,378

Draft 7/31/2013

Stable Value Products Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR		2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013		2013			2012			2013

REVENUES
Net investment income	$	34,956		$	29,851		$	31,030		$	30,074	$	33,651		$	67,358		$	63,725
Other income	—			—			—			—		—			1			—
Total operating revenues	34,956			29,851			31,030			30,074		33,651			67,359			63,725
RIGL - derivatives	(870		)	221			(174		)	368		(558		)	(224		)	(190		)
RIGL - investments	274			(3,139		)	(3,956		)	1,478		1,375			1,881			2,853
Total revenues	34,360			26,933			26,900			31,920		34,468			69,016			66,388

BENEFITS & EXPENSES
Benefits and settlement expenses	18,221			16,002			11,610			11,603		10,683			37,178			22,286
Amortization of deferred policy acquisition costs and value of business acquired	230			410			111			81		96			426			177
Other operating expenses	547			389			634			546		408			1,151			954
Total benefits and expenses	18,998			16,801			12,355			12,230		11,187			38,755			23,417

INCOME BEFORE INCOME TAX	15,362			10,132			14,545			19,690		23,281			30,261			42,971

Adjustments to Reconcile to Operating Income:
Less: RIGL - derivatives	(870		)	221			(174		)	368		(558		)	(224		)	(190		)
Less: RIGL - investments	274			(3,139		)	(3,956		)	1,478		1,375			1,881			2,853

PRE-TAX OPERATING INCOME	$	15,958		$	13,050		$	18,675		$	17,844	$	22,464		$	28,604		$	40,308

Stable Value Products Key Data

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
	2012			2012			2012			2013			2013			2012		2013

SALES
GIC	$	—		$	101,954		$	272,150		$	112,020		$	205,284		$	26,000	$	317,304
GFA - Direct Institutional	26,500			45,000			—			—			—			176,500		—
Total	$	26,500		$	146,954		$	272,150		$	112,020		$	205,284		$	202,500	$	317,304

DEPOSIT BALANCE
Quarter End Balance	$	2,676,312		$	2,328,237		$	2,510,559		$	2,544,609		$	2,579,172
Average Daily Balance	$	2,737,667		$	2,591,485		$	2,437,851		$	2,543,906		$	2,542,096

OPERATING SPREAD	2.33		%	2.01		%	3.06		%	2.81		%	3.53		%

ADJUSTED OPERATING SPREAD (1)	1.98		%	2.00		%	2.60		%	2.55		%	2.67		%

(1) Excludes participating mortgage loan income and bank loan fee income

Draft 7/31/2013

Asset Protection Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	69,883		$	68,729		$	67,081		$	66,186		$	68,203		$	138,819		$	134,389
Reinsurance ceded	(32,214		)	(31,456		)	(31,681		)	(31,083		)	(32,652		)	(63,687		)	(63,735		)
Net premiums and policy fees	37,669			37,273			35,400			35,103			35,551			75,132			70,654
Net investment income	5,883			5,972			5,913			5,854			5,782			12,425			11,636
Other income	29,513			29,247			25,821			26,614			30,480			56,114			57,094
Total operating revenues	73,065			72,492			67,134			67,571			71,813			143,671			139,384

BENEFITS & EXPENSES
Benefits and settlement expenses	25,247			27,492			23,910			24,658			25,964			49,295			50,622
Amortization of deferred policy acquisition costs and value of business acquired	8,829			8,705			7,740			7,462			7,607			17,506			15,069
Other operating expenses	32,510			32,145			34,625			29,370			30,858			65,425			60,228
Total benefits and expenses	66,586			68,342			66,275			61,490			64,429			132,226			125,919

INCOME BEFORE INCOME TAX	6,479			4,150			859			6,081			7,384			11,445			13,465
Less: noncontrolling interests	—			—			—			—			—			—			—
PRE-TAX OPERATING INCOME	$	6,479		$	4,150		$	859		$	6,081		$	7,384		$	11,445		$	13,465

Asset Protection Key Data

	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR		6 MOS
	2012		2012		2012		2013		2013		2012		2013

SALES
Credit insurance	$	10,066	$	9,558	$	6,913	$	7,334	$	9,852	$	18,868	$	17,186
Service contracts	94,122		92,890		83,821		82,035		99,153		176,922		181,188
GAP products	15,063		14,868		14,116		14,766		17,453		33,358		32,219
Total	$	119,251	$	117,316	$	104,850	$	104,135	$	126,458	$	229,148	$	230,593

Draft 7/31/2013

Corporate & Other Quarterly Trends

(Dollars In Thousands)	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

REVENUES
Gross premiums and policy fees	$	4,977		$	4,828		$	4,596		$	4,678		$	4,631		$	10,143		$	9,309
Reinsurance ceded	(5		)	(3		)	(4		)	—			(4		)	(21		)	(4		)
Net premiums and policy fees	4,972			4,825			4,592			4,678			4,627			10,122			9,305
Net investment income	31,249			48,075			49,272			41,232			45,258			71,294			86,490
Other income	574			(10		)	3,173			1,269			2,488			36,788			3,757
Total operating revenues	36,795			52,890			57,037			47,179			52,373			118,204			99,552
RIGL - investments	(14,000		)	7,163			(6,241		)	2,063			1,120			(30,970		)	3,183
RIGL - derivatives	(4,024		)	(287		)	(347		)	1,039			1,843			(4,019		)	2,882
Total revenues	18,771			59,766			50,449			50,281			55,336			83,215			105,617

BENEFITS & EXPENSES
Benefits and settlement expenses	5,256			5,600			2,574			5,334			5,330			11,219			10,664
Amortization of deferred policy acquisition costs and value of business acquired	186			253			225			179			165			540			344
Other operating expenses	56,750			53,651			53,310			59,998			49,361			103,962			109,359
Total benefits and expenses	62,192			59,504			56,109			65,511			54,856			115,721			120,367

INCOME (LOSS) BEFORE INCOME TAX	(43,421		)	262			(5,660		)	(15,230		)	480			(32,506		)	(14,750		)

Adjustments to Reconcile to Operating Income:
Less: RIGL - investments	(14,000		)	7,163			(6,241		)	2,063			1,120			(30,970		)	3,183
Less: RIGL - derivatives	(4,024		)	(287		)	(347		)	1,039			1,843			(4,019		)	2,882
Less: noncontrolling interests	—			—			—			—			—			—			—

PRE-TAX OPERATING INCOME (LOSS)	$	(25,397	)	$	(6,614	)	$	928		$	(18,332	)	$	(2,483	)	$	2,483		$	(20,815	)

Draft 7/31/2013

INFORMATION RELATED TO CERTAIN NON-GAAP DISCLOSURES

The following pages contain information related to certain non-GAAP disclosures (consolidated and segment operating income (loss), operating income per diluted share, shareowners’ equity per share excluding accumulated other comprehensive income (loss), operating income return on average equity, and net income return on average equity).

All income per share results are presented on a diluted basis, unless otherwise noted.

CONSOLIDATED AND SEGMENT OPERATING INCOME (LOSS) AND OPERATING INCOME PER DILUTED SHARE

Consolidated and segment operating income (loss) and operating income per diluted share (hereinafter collectively referred to as “consolidated and segment operating income”) are defined as income before income tax, excluding realized gains and losses on investments and derivatives net of the related amortization of deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”). Operating earnings exclude changes in the guaranteed minimum withdrawal benefits (“GMWB”) embedded derivatives (excluding the portion attributed to economic cost), realized and unrealized gains (losses) on derivatives used to hedge the VA product, actual GMWB incurred claims and net of the related amortization of DAC attributed to each of these items.

Management believes that consolidated and segment operating income (loss) provides relevant and useful information to investors, as it represents the basis on which the performance of the Company’s business is internally assessed. Although the items excluded from consolidated and segment operating income may be significant components in understanding and assessing the Company’s overall financial performance, management believes that consolidated and segment operating income enhances an investor’s understanding of the Company’s results of operations by highlighting the income (loss) generally attributable to the normal, recurring operations of the Company’s business.

SHAREOWNERS’ EQUITY PER SHARE EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

As prescribed by GAAP, certain investments are recorded at their market values with the resulting unrealized gains (losses) affected by a related adjustment to DAC and VOBA, net of income tax, reported as a component of shareowners’ equity. The market values of fixed maturities increase or decrease as interest rates change. The Company believes that an insurance company’s shareowners’ equity per share may be difficult to analyze without disclosing the effects of recording accumulated other comprehensive income (loss), including unrealized gains (losses) on investments. Therefore, the Company reports the non-GAAP measure shareowners’ equity per share excluding accumulated other comprehensive income (loss), including unrealized gains (losses) on investments. This non-GAAP measure may be reconciled to the GAAP measure, shareowners’ equity per share by including accumulated other comprehensive income (loss), including unrealized gains (losses) on investments.

OPERATING INCOME RETURN ON AVERAGE EQUITY

Operating income return on average equity is a measure used by management to evaluate the Company’s performance. It is calculated by dividing operating income (as defined above) for a rolling twelve month period by the average ending balance of shareowners’ equity excluding accumulated other comprehensive income (loss) for the five most recent quarters.

NET INCOME RETURN ON AVERAGE EQUITY

Net income return on average equity is a measure used by management to evaluate the Company’s performance. It is calculated by dividing net income for a rolling twelve month period by the average ending balance of shareowners’ equity excluding accumulated other comprehensive income (loss) for the five most recent quarters.

Draft 7/31/2013

Reconciliation of Segment Operating Income (Loss) to Net Income available to PLC’s common shareowners

(Dollars In Thousands)	2ND QTR			2ND QTR			6 MOS
(Unaudited)	2012			2013			2012			2013

Life Marketing	$	30,348		$	24,673		$	60,717		$	48,380
Acquisitions	43,615			29,435			82,714			63,812
Annuities	28,553			36,382			64,336			79,780
Stable Value Products	15,958			22,464			28,604			40,308
Asset Protection	6,479			7,384			11,445			13,465
Corporate & Other	(25,397		)	(2,483		)	2,483			(20,815		)
Total Pre-tax operating income	99,556			117,855			250,299			224,930

Realized Investment Gains (Losses) - Investments	48,044			(119,311		)	70,549			(129,067		)
Realized Investment Gains (Losses) - Derivatives	(39,913		)	158,469			(62,582		)	178,777
Income Tax Expense	(31,532		)	(53,814		)	(83,090		)	(93,150		)

Net income available to PLC’s common shareowners	$	76,155		$	103,199		$	175,176		$	181,490

Draft 7/31/2013

Reconciliation of Operating Income per Diluted Share to Net Income Available to PLC’s Common Shareowners per Diluted Share

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS
(Unaudited)	2012			2012			2012			2013			2013			2012			2013

OPERATING INCOME PER SHARE

Operating income per share-diluted	$	0.85		$	0.76		$	0.98		$	0.89		$	0.96		$	2.04		$	1.84
RIGL - Derivatives per share-diluted	(0.31		)	(0.98		)	(0.12		)	0.16			1.27			(0.49		)	1.44
RIGL - All Other Investments-diluted	0.37			0.95			(0.04		)	(0.08		)	(0.96		)	0.55			(1.04		)
Net income available to PLC’s common shareowners per share-diluted	$	0.91		$	0.73		$	0.82		$	0.97		$	1.27		$	2.10		$	2.24

Draft 7/31/2013

Reconciliation of Total Protective Life Corporation’s Shareowners’ Equity per Share to Total Protective Life Corporation’s Shareowners’ Equity (Excl. AOCI) per share

	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
(Unaudited)	2012		2012		2012		2013		2013

PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY PER SHARE
Total Protective Life Corporation’s Shareowners’ Equity	$	51.81	$	57.70	$	59.06	$	57.89	$	48.91
Less: Accumulated other comprehensive income (loss)	16.47		21.70		22.22		20.39		10.21
Excluding accumulated other comprehensive income (loss)	$	35.34	$	36.00	$	36.84	$	37.50	$	38.70

Draft 7/31/2013

Calculation of Operating Income Return on Average Equity Rolling Twelve Months Ended June 30, 2013

(Dollars In Thousands)	Three Months												Twelve Months
(Unaudited)	9/30/2012			12/31/2012			3/31/2013			6/30/2013			6/30/2013
NUMERATOR:
Net income available to PLC’s common shareowners	$	60,480		$	66,796		$	78,291		$	103,199		$	308,766
Less:
Realized investment gains (losses), net of income tax
Investments	74,099			(7,018		)	(5,674		)	(74,086		)	(12,679		)
Derivatives	(80,978		)	(9,630		)	13,200			103,004			25,596
Related amortization of DAC and VOBA, net of income tax	4,385			3,698			(667		)	(3,466		)	3,950

Operating Income	$	62,974		$	79,746		$	71,432		$	77,747		$	291,899

					Total
					Protective Life
					Corporation’s
	Total				Shareowners’
	Protective Life		Accumulated		Equity Excluding
	Corporation’s		Other		Accumulated Other
	Shareowners’		Comprehensive		Comprehensive
	Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
June 30, 2012	$	4,147,234	$	1,318,336	$	2,828,898
September 30, 2012	4,565,855		1,716,766		2,849,089
December 31, 2012	4,615,183		1,736,722		2,878,461
March 31, 2013	4,541,292		1,599,323		2,941,969
June 30, 2013	3,837,991		801,194		3,036,797
Total					$	14,535,214

Average					$	2,907,043

Operating Income Return on Average Equity					10.0		%

Draft 7/31/2013

Calculation of Operating Income Return on Average Equity Rolling Twelve Months Ended June 30, 2012

(Dollars In Thousands)	Three Months												Twelve Months
(Unaudited)	9/30/2011			12/31/2011			3/31/2012			6/30/2012			6/30/2012
NUMERATOR:
Net income available to PLC’s common shareowners	$	82,857		$	86,034		$	99,021		$	76,155		$	344,067
Less:
Realized investment gains (losses), net of income tax
Investments	83,460			7,041			11,025			33,790			135,316
Derivatives	(59,744		)	(2,129		)	(14,734		)	(25,943		)	(102,550		)
Related amortization of DAC and VOBA, net of income tax	(5,036		)	(664		)	3,603			(2,561		)	(4,658		)

Operating Income	$	64,177		$	81,786		$	99,127		$	70,869		$	315,959

						Total
						Protective Life
						Corporation’s
	��	Total				Shareowners’
		Protective Life		Accumulated		Equity Excluding
		Corporation’s		Other		Accumulated Other
		Shareowners’		Comprehensive		Comprehensive
		Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
June 30, 2011		$	3,104,801	$	469,071	$	2,635,730
September 30, 2011		3,579,515		906,068		2,673,447
December 31, 2011		3,711,517		985,444		2,726,073
March 31, 2012		3,785,810		1,001,803		2,784,007
June 30, 2012		4,147,234		1,318,336		2,828,898
Total						$	13,648,155

Average						$	2,729,631

Operating Income Return on Average Equity						11.6		%

Draft 7/31/2013

Calculation of Net Income Available to PLC’s common shareowners Return on Average Equity Rolling Twelve Months Ended June 30, 2013

(Dollars In Thousands)	Three Months								Twelve Months
(Unaudited)	9/30/2012		12/31/2012		3/31/2013		6/30/2013		6/30/2013
NUMERATOR:
Net income available to PLC’s common shareowners	$	60,480	$	66,796	$	78,291	$	103,199	$	308,766

					Total
					Protective Life
					Corporation’s
	Total				Shareowners’
	Protective Life		Accumulated		Equity Excluding
	Corporation’s		Other		Accumulated Other
	Shareowners’		Comprehensive		Comprehensive
	Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
June 30, 2012	$	4,147,234	$	1,318,336	$	2,828,898
September 30, 2012	4,565,855		1,716,766		2,849,089
December 31, 2012	4,615,183		1,736,722		2,878,461
March 31, 2013	4,541,292		1,599,323		2,941,969
June 30, 2013	3,837,991		801,194		3,036,797
Total					$	14,535,214

Average					$	2,907,043

Net income available to PLC’s common shareowners Return on Average Equity					10.6		%

Draft 7/31/2013

Calculation of Net Income Available to PLC’s common shareowners Return on Average Equity Rolling Twelve Months Ended June 30, 2012

(Dollars In Thousands)	Three Months								Twelve Months
(Unaudited)	9/30/2011		12/31/2011		3/31/2012		6/30/2012		6/30/2012
NUMERATOR:
Net income available to PLC’s common shareowners	$	82,857	$	86,034	$	99,021	$	76,155	$	344,067

					Total
					Protective Life
					Corporation’s
	Total				Shareowners’
	Protective Life		Accumulated		Equity Excluding
	Corporation’s		Other		Accumulated Other
	Shareowners’		Comprehensive		Comprehensive
	Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
June 30, 2011	$	3,104,801	$	469,071	$	2,635,730
September 30, 2011	3,579,515		906,068		2,673,447
December 31, 2011	3,711,517		985,444		2,726,073
March 31, 2012	3,785,810		1,001,803		2,784,007
June 30, 2012	4,147,234		1,318,336		2,828,898
Total					$	13,648,155

Average					$	2,729,631

Net income available to PLC’s common shareowners Return on Average Equity					12.6		%

Draft 7/31/2013

ACCOUNTING CHANGES

The financial data herein reflects, for all periods presented, the adoption and retrospective application of Accounting Standards Update 2010-26 (the “Update”), which addresses diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. This Update prescribes that certain incremental direct costs of successful initial or renewal contract acquisitions may be deferred. It defines incremental direct costs as those costs that result directly from and are essential to the contract transaction and would not have been incurred by the insurance entity had the contract transaction not occurred. This Update also clarifies the definition of the types of incurred costs that may be capitalized and the accounting and recognition treatment of advertising, research, and other administrative costs related to the acquisition of insurance contracts. This Update was effective for the Company on January 1, 2012.

The financial data herein also reflects, for all periods presented, a revision to the Company’s definition of operating income (loss) as it relates to embedded derivatives on our variable annuity contracts and related hedging activities, to better reflect the basis on which the performance of our business is internally assessed. This change did not impact its comparable GAAP measure income before income tax. See information related to certain non-GAAP disclosures for additional information.

In the first quarter of 2012, management revised the definition of operating income (loss) as it relates to certain features of our variable annuity contracts and related hedging activities, to better reflect the basis on which the performance of its business is internally assessed. Under the revised definition, the following items will be excluded from operating income:

· Changes in GMWB embedded derivatives related to this rider feature of certain variable annuity products (excluding the portion attributed to economic costs). Economic cost is the long-term expected average cost of providing the product benefit over the life of the policy based on product pricing assumptions. These include assumptions about the economic/market environment, and elective and non-elective policy owner behavior (e.g. lapses, withdrawal timing, mortality, etc.). These features are considered embedded derivatives under ASC 815.

· Changes in value of certain derivative instruments used to mitigate the risk related to variable annuity contracts.

· That portion of the change in balance sheet components amortized over estimated gross profit that is attributed to the embedded GMWB derivative and related economic hedges (e.g. DAC amortization).

Draft 7/31/2013

Summary of Impact of DAC Accounting & Operating Definition Change

(Dollars In Thousands)
(Unaudited)	2007			2008			2009			2010			2011

Consolidated Statement of Income Data:

Pre-tax Operating Income (Loss) (1)
Life Marketing as originally reported	$	189,186		$	188,535		$	137,826		$	147,470		$	116,274
DAC change	(48,411		)	(42,714		)	(30,018		)	(23,606		)	(20,151		)
Life Marketing as adjusted	140,775			145,821			107,808			123,864			96,123

Asset Protection as originally reported	41,559			30,789			23,229			29,897			24,662
DAC change	244			1,729			3,019			1,594			745
Asset Protection as adjusted	41,803			32,518			26,248			31,491			25,407

Annuities as originally reported	23,051			18,707			56,642			53,901			110,726
DAC change	(18,201		)	(27,212		)	(15,997		)	(22,689		)	(18,802		)
VA change to operating income	—			16,744			(18,591		)	20,951			(11,700		)
Annuities as adjusted	4,850			8,239			22,054			52,163			80,224

Stable Value Products	50,231			89,811			61,963			39,207			56,780
Acquisitions	129,247			136,479			133,760			111,143			157,393
Corporate & Other	(3,416		)	(105,986		)	81,980			(25,053		)	5,767

Total Pre-tax Operating Income as originally reported	429,858			358,335			495,400			356,565			471,602
DAC change	(66,368		)	(68,197		)	(42,996		)	(44,701		)	(38,208		)
VA change to operating income	—			16,744			(18,591		)	20,951			(11,700		)
Total Pre-tax Operating Income as adjusted	363,490			306,882			433,813			332,815			421,694

Income before income tax as originally reported	436,088			(75,131		)	416,778			388,863			507,152
DAC change	(66,368		)	(68,197		)	(34,593		)	(54,091		)	(36,676		)
Income before income tax as adjusted	369,720			(143,328		)	382,185			334,772			470,476

Net Income Available to PLC’s Common Shareowners as originally reported	289,566			(41,855		)	271,488			260,241			339,070
DAC change	(42,837		)	(44,031		)	(22,351		)	(34,927		)	(23,678		)
Net Income Available to PLC’s Common Shareowners as adjusted	246,729			(85,886		)	249,137			225,314			315,392

Per Share Data (Diluted):

Operating Earnings per Share as originally reported (1)	$	3.99		$	3.37		$	3.97		$	2.73		$	3.65
DAC change	(0.60		)	(0.62		)	(0.34		)	(0.33		)	(0.28		)
VA change to operating income	—			0.15			(0.15		)	0.15			(0.09		)
Operating Earnings per Share as adjusted	$	3.39		$	2.90		$	3.48		$	2.55		$	3.28

Net Income Available to PLC’s Common Shareowners as originally reported	$	4.05		$	(0.59	)	$	3.34		$	2.97		$	3.92
DAC change	(0.60		)	(0.62		)	(0.27		)	(0.40		)	(0.27		)
Net Income Available to PLC’s Common Shareowners as adjusted	$	3.45		$	(1.21	)	$	3.07		$	2.57		$	3.65

(1) “Operating income” is a non-GAAP financial measure. “Net income available to PLC’s common shareowners” is a GAAP financial measure to which “Operating Income” may be compared.

Draft 7/31/2013

Summary of Impact of DAC Accounting Change

(Dollars In Thousands)
(Unaudited)	2007			2008			2009			2010			2011

Consolidated Balance Sheet Data:

Total Assets as originally reported	$	41,786,041		$	39,572,449		$	42,311,587		$	47,562,786		$	52,932,085
DAC change	(624,656		)	(729,089		)	(728,036		)	(759,163		)	(788,716		)
Total Assets as adjusted	$	41,161,385		$	38,843,360		$	41,583,551		$	46,803,623		$	52,143,369

Total PLC’s Shareowners’ Equity as originally reported	2,456,761			761,095			2,478,821			3,331,087			4,220,465
DAC change	(403,135		)	(470,538		)	(469,892		)	(489,899		)	(508,948		)
Total PLC’s Shareowners’ Equity as adjusted	$	2,053,626		$	290,557		$	2,008,929		$	2,841,188		$	3,711,517

Total PLC’s Shareowners’ Equity Excluding AOCI as originally reported (1)	2,537,290			2,428,151			2,799,990			3,037,833			3,254,246
DAC change	(403,186		)	(447,217		)	(469,568		)	(504,495		)	(528,173		)
Total PLC’s Shareowners’ Equity Excluding AOCI as adjusted (1)	$	2,134,104		$	1,980,934		$	2,330,422		$	2,533,338		$	2,726,073

Per Share Data (Common Shares Outstanding):

Total PLC’s Shareowners’ Equity as originally reported	35.02			10.89			28.96			38.88			51.68
DAC change	(5.74		)	(6.73		)	(5.49		)	(5.71		)	(6.23		)
Total PLC’s Shareowners’ Equity as adjusted	$	29.28		$	4.16		$	23.47		$	33.17		$	45.45

Total PLC’s Shareowners’ Equity Excluding AOCI as originally reported (1)	36.17			34.74			32.72			35.46			39.85
DAC change	(5.75		)	(6.40		)	(5.49		)	(5.89		)	(6.47		)
Total PLC’s Shareowners’ Equity Excluding AOCI as adjusted (1)	$	30.42		$	28.34		$	27.23		$	29.57		$	33.38

(1) “Total PLC’s Shareowners’ Equity excluding accumulated other comprehensive income (loss)” is a non-GAAP financial measure. “Total PLC Shareowners’ equity” is a GAAP financial measure to which “Total PLC’s Shareowners’ Equity excluding accumulated other comprehensive income (loss)” can be compared.

Protective Life (PLPDZ) 8-KProtective Reports Second Quarter 2013