EX-99 3 ex99_2.htm EXHIBIT 99.2 - SUPPLEMENTAL FINANCIAL INFORMATION Exhibit 99.2 - Supplemental Financial Information
 
Protective Life Corporation
Post Office Box 2606
Birmingham, AL 35202
Phone 205-268-1000
Exhibit 99.2
 
     Form 8-K
 
SUPPLEMENTAL FINANCIAL INFORMATION


The following document contains supplemental quarterly statistical financial information for the quarter ended September 30, 2006. This document is dated November 7, 2006. 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 (net of the related amortization of deferred acquisition costs (“DAC”)  and value of businesses acquired ("VOBA") and participating income from real estate ventures). Consolidated and segment operating income excludes net realized investment gains (losses) (net of the related amortization of DAC and value of businesses acquired ("VOBA") and participating income from real estate ventures). Periodic settlements of derivatives associated with corporate debt and certain investments and annuity products are included in realized gains (losses) but are considered part of operating income because the derivatives 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 GAAP, certain investments are recorded at their market values with the resulting unrealized gains (losses) reduced by a related adjustment to DAC and VOBA, 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 measure share 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.

From time to time, the Company provides additional financial information, which is available on the Company’s web site at www.protective.com in the Analyst/Investor section under the financial report library titled Company Overview.
 
 
PROTECTIVE LIFE CORPORATION
                
Draft
Quarterly Financial Highlights
                
11/7/2006
(Dollars in Thousands)
                
Page 1
(Unaudited)
                  
   
3RD QTR
4TH QTR
1ST QTR
2ND QTR
3RD QTR
  
9 MOS
9 MOS
Pretax Operating Income *  
2005
2005
2006
2006
2006
  
2005
2006
                   
Life Marketing
  
$38,014
$48,174
$40,781
$51,225
$40,270
 
$115,487
$132,276
Acquisitions
  
19,510
18,593
19,906
18,958
$32,060
 
62,018
$70,924
Annuities
  
4,927
14,797
4,741
6,150
$5,351
 
17,136
$16,242
Stable Value Contracts
  
13,743
13,172
12,344
11,800
$10,429
 
41,626
$34,573
Asset Protection
  
6,102
6,335
8,738
8,904
($14,401)
  
18,566
$3,241
Corporate & Other
  
16,236
9,968
11,663
6,848
($3,929)
  
37,261
$14,582
Total Pretax Operating Income
  
$98,532
$111,039
$98,173
$103,885
$69,781
 
$292,094
$271,838
                   
                   
Balance Sheet Data
                  
                   
Total GAAP Assets
  
$28,592,528
$28,966,993
$28,952,024
$29,070,910
$38,805,973
     
Share Owners' Equity
  
$2,200,866
$2,183,660
$2,104,270
$2,043,711
$2,271,889
     
Share Owners' Equity (excluding accumulated other comprehensive income) **
  
$2,016,355
$2,078,440
$2,139,512
$2,193,035
$2,233,494
     
                   
                   
Stock Data
                  
                   
Closing Price
  
$41.18
$43.77
$49.74
$46.62
$45.75
 
$39.30
$45.75
Average Shares Outstanding
                  
Basic
  
70,582,016
70,672,518
70,752,202
70,805,802
70,811,292
 
70,525,004
70,789,982
Diluted
  
71,350,044
71,496,555
71,559,255
71,381,677
71,355,221
 
71,301,335
71,431,304
                   
 
* "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
                            
Draft
  
GAAP Consolidated Statements Of Income
                            
11/7/2006
  
(Dollars in thousands)
                            
Page 2
  
(Unaudited)
                                
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
9 MOS
  
9 MOS
  
   
2005
  
2005
  
2006
  
2006
  
2006
    
2005
  
2006
  
REVENUES
              
 
  
 
            
Gross Premiums and Policy Fees
  
$
486,660
  
$
515,963
  
$
507,694
  
$
506,211
  
$
637,457
    
$
1,439,817
  
$
1,651,362
  
Reinsurance Ceded
    
(282,919
)
  
(349,275
)
  
(280,670
)
  
(307,769
)
  
(371,688
)
    
(877,582
)
  
(960,127
)
Net Premiums and Policy Fees
    
203,741
   
166,688
   
227,024
   
198,442
   
265,769
     
562,235
   
691,235
 
Net investment income
    
306,885
   
303,290
   
299,065
   
300,734
   
410,746
     
877,212
   
1,010,545
 
RIGL - Derivatives
    
7,662
   
(6,154
)
  
13,337
   
(4,799
)
  
(55,302
)
    
(24,727
)
  
(46,764
)
RIGL - All Other Investments
    
3,612
   
5,423
   
5,153
   
14,663
   
78,645
     
43,970
   
98,461
 
Other income
    
47,377
   
44,101
   
48,536
   
53,599
   
62,355
     
137,166
   
164,490
 
Total Revenues
    
569,277
   
513,348
   
593,115
   
562,639
   
762,213
     
1,595,856
   
1,917,967
 
                       
   
               
BENEFITS & EXPENSES
                      
   
               
Benefits and settlement expenses
    
333,365
   
327,932
   
349,608
   
335,937
   
488,948
     
925,435
   
1,174,493
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
57,950
   
14,435
   
50,031
   
34,153
   
67,199
     
184,068
   
151,383
 
Other operating expenses
    
55,513
   
51,805
   
67,188
   
74,807
   
97,711
     
171,880
   
239,706
 
Interest on indebtedness
    
15,582
   
14,342
   
15,631
   
15,056
   
20,457
     
42,294
   
51,144
 
Total Benefits and Expenses
    
462,410
   
408,514
   
482,458
   
459,953
   
674,315
     
1,323,677
   
1,616,726
 
                       
   
               
INCOME BEFORE INCOME TAX
    
106,867
   
104,834
   
110,657
   
102,686
   
87,898
     
272,179
   
301,241
 
Income tax expense
    
36,976
   
36,272
   
38,520
   
35,745
   
30,597
     
94,174
   
104,862
 
Change in Acct Principle
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
NET INCOME
  
$
69,891
  
$
68,562
  
$
72,137
  
$
66,941
  
$
57,301
    
$
178,005
  
$
196,379
  
                       
   
               
PER SHARE DATA FOR QUARTER
                      
   
               
Operating income-diluted *
  
$
0.90
  
$
1.02
  
$
0.90
  
$
0.95
  
$
0.63
                
RIGL - Derivatives net of gains related to corp debt, investments and annuities
    
0.05
   
(0.07
)
  
0.11
   
(0.05
)
  
(0.49
)
              
RIGL - All Other Investments, net of participating income
    
0.03
   
0.01
   
0.00
   
0.04
   
0.66
               
Change in Accounting Principle
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
               
Net income-diluted
  
$
0.98
  
$
0.96
  
$
1.01
  
$
0.94
  
$
0.80
                
Average shares outstanding-diluted
    
71,350,044
   
71,496,555
   
71,559,255
   
71,381,677
   
71,355,221
               
Dividends paid
  
$
0.195
  
$
0.195
  
$
0.195
  
$
0.215
  
$
0.215
                
                                               
PER SHARE DATA FOR YTD
                      
   
               
Operating income-diluted *
  
$
2.68
  
$
3.70
  
$
0.90
  
$
1.85
  
$
2.48
    
$
2.68
  
$
2.48
  
RIGL - Derivatives net of gains related to corp debt, investments and annuities
    
(0.31
)
  
(0.38
)
  
0.11
   
0.06
   
(0.43
)
    
(0.31
)
  
(0.43
)
RIGL - All Other Investments, net of participating income
    
0.13
   
0.14
   
0.00
   
0.04
   
0.70
     
0.13
   
0.70
 
Change in Accounting Principle
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
     
0.00
   
0.00
 
Net income-diluted
  
$
2.50
  
$
3.46
  
$
1.01
  
$
1.95
  
$
2.75
    
$
2.50
  
$
2.75
  
Average shares outstanding-diluted
    
71,301,335
   
71,350,541
   
71,559,255
   
71,469,976
   
71,431,304
     
71,301,335
   
71,431,304
 
Dividends paid
  
$
0.565
  
$
0.760
  
$
0.195
  
$
0.410
  
$
0.625
    
$
0.565
  
$
0.625
  
 
* "Operating Income" is a non-GAAP financial measure. "Net Income" is a GAAP financial measure to which "Operating Income" may be compared.
 
PROTECTIVE LIFE CORPORATION
                  
Draft
  
GAAP Consolidated Balance Sheets
                  
11/7/2006
  
(Dollars in thousands)
                  
Page 3
  
(Unaudited)
                      
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
  
   
2005
  
2005
  
2006
  
2006
  
2006
  
ASSETS
              
 
  
 
  
Fixed maturities
  
$
15,824,420
  
$
15,472,386
  
$
14,965,927
  
$
14,901,325
  
$
21,146,307
  
Equity securities
    
115,570
   
121,012
   
123,536
   
121,215
   
124,495
 
Mortgage loans
    
3,101,823
   
3,287,745
   
3,411,337
   
3,537,842
   
3,650,356
 
Investment real estate
    
92,340
   
72,932
   
63,858
   
57,059
   
52,263
 
Policy loans
    
463,514
   
458,825
   
456,147
   
454,225
   
835,817
 
Other long-term investments
    
286,497
   
279,676
   
269,345
   
290,427
   
290,304
 
Long-term investments
    
19,884,164
   
19,692,576
   
19,290,150
   
19,362,093
   
26,099,542
 
Short-term investments
    
606,165
   
776,139
   
833,567
   
734,021
   
1,377,210
 
Total investments
    
20,490,329
   
20,468,715
   
20,123,717
   
20,096,114
   
27,476,752
 
Cash
    
63,565
   
83,670
   
37,118
   
35,718
   
39,285
 
Accrued investment income
    
201,037
   
189,038
   
198,708
   
204,572
   
266,688
 
Accounts and premiums receivable
    
58,883
   
82,080
   
59,236
   
114,514
   
130,427
 
Reinsurance receivable
    
2,862,674
   
3,020,685
   
3,146,444
   
3,212,207
   
4,541,415
 
Deferred policy acquisition costs and value of businesses acquired
    
2,032,784
   
2,171,988
   
2,332,639
   
2,475,843
   
3,099,726
 
Goodwill
    
49,423
   
49,423
   
49,423
   
49,423
   
68,472
 
Property and equipment, net
    
47,304
   
47,010
   
45,941
   
44,897
   
44,569
 
Other assets
    
140,375
   
140,124
   
144,855
   
151,499
   
248,197
 
Income Tax Receivable
    
52,923
   
85,807
   
96,443
   
19,577
   
0
 
Assets Related to Separate Accounts
                      
   
 
Variable Annuity
    
2,352,287
   
2,377,124
   
2,447,968
   
2,391,285
   
2,604,488
 
Variable Universal Life
    
240,944
   
251,329
   
269,532
   
275,261
   
285,954
 
Other
    
0
   
0
   
0
   
0
   
0
 
                       
   
 
TOTAL ASSETS
  
$
28,592,528
  
$
28,966,993
  
$
28,952,024
  
$
29,070,910
  
$
38,805,973
  
 

PROTECTIVE LIFE CORPORATION
                  
Draft
  
GAAP Consolidated Balance Sheets
                  
11/7/2006
  
(Dollars in thousands)
                  
Page 4
  
(Unaudited)
                      
   
 3RD QTR
  
 4TH QTR
  
 1ST QTR
  
2ND QTR 
  
3RD QTR 
  
   
 2005
  
 2005
  
2006 
  
2006 
  
2006 
 
LIABILITIES AND SHARE-OWNERS' EQUITY
                      
   
 
  
 
  
 
  
 
  
 
  
LIABILITIES
  
 
  
 
  
 
  
 
  
 
  
Policy liabilities and accruals
                            
Future policy benefits and claims
  
$
10,797,527
  
$
11,155,074
  
$
11,447,516
  
$
11,681,465
  
$
14,761,428
  
Unearned premiums
    
671,971
   
740,071
   
767,074
   
814,739
   
906,542
 
Stable value product deposits
    
5,900,740
   
6,057,721
   
5,873,092
   
5,764,856
   
5,515,633
 
Annuity deposits
    
3,430,038
   
3,388,005
   
3,330,897
   
3,328,479
   
8,943,078
 
Other policyholders' funds
    
149,838
   
147,921
   
147,470
   
144,951
   
340,756
 
Securities sold under repurchase agreements
    
142,850
   
0
   
0
   
0
   
0
 
Other liabilities
    
1,043,260
   
954,716
   
881,146
   
923,900
   
1,110,058
 
Accrued income taxes
    
0
   
0
   
0
   
(2,004
)
  
99,428
 
Deferred income taxes
    
287,976
   
317,317
   
280,219
   
240,774
   
271,894
 
Non-recourse funding obligations
    
100,000
   
125,000
   
150,000
   
200,000
   
250,000
 
Debt
    
471,808
   
482,532
   
473,032
   
489,532
   
471,132
 
Liabilities related to variable interest entities
    
464,747
   
448,093
   
442,383
   
435,980
   
435,756
 
Subordinated debt securities
    
324,743
   
324,743
   
324,743
   
324,743
   
524,743
 
Minority interest - subsidiaries
    
12,933
   
13,687
   
12,682
   
13,238
   
13,194
 
Liabilities related to separate accounts
                            
Variable annuity
    
2,352,287
   
2,377,124
   
2,447,968
   
2,391,285
   
2,604,488
 
Variable universal life
    
240,944
   
251,329
   
269,532
   
275,261
   
285,954
 
Other
    
0
   
0
   
0
   
0
   
0
 
Total Liabilities
    
26,391,662
   
26,783,333
   
26,847,754
   
27,027,199
   
36,534,084
 
                             
SHARE-OWNERS' EQUITY
                            
Common stock
    
36,626
   
36,626
   
36,626
   
36,626
   
36,626
 
Additional paid-in capital
    
433,363
   
440,475
   
441,964
   
443,462
   
441,589
 
Treasury stock
    
(12,768
)
  
(12,765
)
  
(12,079
)
  
(11,968
)
  
(11,906
)
Unallocated ESOP shares
    
(1,610
)
  
(1,610
)
  
(1,231
)
  
(1,231
)
  
(1,231
)
Retained earnings
    
1,560,744
   
1,615,714
   
1,674,232
   
1,726,146
   
1,768,416
 
Accumulated other comprehensive income
    
184,511
   
105,220
   
(35,242
)
  
(149,324
)
  
38,395
 
                             
Total Share-owners' Equity
    
2,200,866
   
2,183,660
   
2,104,270
   
2,043,711
   
2,271,889
 
                             
TOTAL LIABILITIES AND EQUITY
 
$
28,592,528
  
$
28,966,993
  
$
28,952,024
  
$
29,070,910
  
$
38,805,973
  
 
 
SHARE-OWNERS' EQUITY PER SHARE
                            
Total Share-owners' Equity
  
$
31.58
  
$
31.33
  
$
30.11
  
$
29.23
  
$
32.49
  
Accumulated other comprehensive income
    
2.65
   
1.51
   
(0.50
)
  
(2.14
)
  
0.55
 
Excluding accumulated other comprehensive income *
 
$
28.93
  
$
29.82
  
$
30.61
  
$
31.37
  
$
31.94
  
                             
Total Share-owners' Equity
  
$
2,200,866
  
$
2,183,660
  
$
2,104,270
  
$
2,043,711
  
$
2,271,889
  
Accumulated other comprehensive income
    
184,511
   
105,220
   
(35,242
)
  
(149,324
)
  
38,395
 
Share-owners' Equity (excluding accumulated other comprehensive income) *
  
$
2,016,355
  
$
2,078,440
  
$
2,139,512
  
$
2,193,035
  
$
2,233,494
  
                             
Common shares outstanding
    
69,692,925
   
69,694,049
   
69,885,344
   
69,916,577
   
69,934,277
 
Treasury Stock shares
    
3,559,035
   
3,557,911
   
3,366,616
   
3,335,383
   
3,317,683
 
 
* "Share-owners' equity excluding accumulated other comprehensive income" is a non-GAAP financial measure. "Share-owners' equity" is a GAAP financial measure to which "Share-owners' equity excluding accumulated other comprehensive income" may be compared.
 
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Calculation of Operating Earnings Per Share
                            
11/7/2006
  
(Dollars in thousands)
                            
Page 5
  
(Unaudited)
                                
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
9 MOS
  
9 MOS
  
   
2005
  
2005
  
2006
  
2006
  
2006
    
2005
  
2006
  
               
 
  
 
            
CALCULATION OF NET INCOME PER SHARE
              
 
  
 
            
               
 
  
 
            
Net income
  
$
69,891
  
$
68,562
  
$
72,137
  
$
66,941
  
$
57,301
    
$
178,005
  
$
196,379
  
                                           
Average shares outstanding-basic
    
70,582,016
   
70,672,518
   
70,752,202
   
70,805,802
   
70,811,292
     
70,525,004
   
70,789,982
 
Average shares outstanding-diluted
    
71,350,044
   
71,496,555
   
71,559,255
   
71,381,677
   
71,355,221
     
71,301,335
   
71,431,304
 
                                           
Net income per share-basic
  
$
0.99
  
$
0.97
  
$
1.02
  
$
0.94
  
$
0.81
    
$
2.52
  
$
2.77
  
Net income per share-diluted
  
$
0.98
  
$
0.96
  
$
1.01
  
$
0.94
  
$
0.80
    
$
2.50
  
$
2.75
  
                                           
Income from continuing operations
  
$
69,891
  
$
68,562
  
$
72,137
  
$
66,941
  
$
57,301
    
$
178,005
  
$
196,379
  
                                           
EPS (basic)
  
$
0.99
  
$
0.97
  
$
1.02
  
$
0.94
  
$
0.81
    
$
2.52
  
$
2.77
  
EPS (diluted)
  
$
0.98
  
$
0.96
  
$
1.01
  
$
0.94
  
$
0.80
    
$
2.50
  
$
2.75
  
                                           
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
                                          
                                           
RIGL - Derivatives
  
$
7,662
  
$
(6,154
)
$
13,337
  
$
(4,799
)
$
(55,302
)
  
$
(24,727
)
$
(46,764
)
Derivative Gains related to Corporate Debt and Investments
    
(2,777
)
  
(1,972
)
  
(1,331
)
  
(674
)
  
(654
)
    
(9,421
)
  
(2,659
)
Derivative Gains related to Annuities
    
0
   
351
   
651
   
(672
)
  
1,808
     
0
   
1,787
 
RIGL - All Other Investments, net of participating income
    
3,612
   
2,622
   
(173
)
  
6,495
   
78,645
     
38,087
   
84,967
 
Related amortization of DAC & VOBA
    
(162
)
  
(1,052
)
  
0
   
(1,549
)
  
(6,379
)
    
(23,854
)
  
(7,928
)
     
8,335
   
(6,205
)
  
12,484
   
(1,199
)
  
18,118
     
(19,915
)
  
29,403
 
Tax effect
   
(2,918
)
  
2,172
   
(4,369
)
  
419
   
(6,341
)
    
6,970
   
(10,291
)
   
$
5,417
  
$
(4,033
)
$
8,115
  
$
(780
)
$
11,777
    
$
(12,945
)
$
19,112
  
                                           
RIGL - Derivatives per share-diluted
 
$
0.05
  
$
(0.07
)
$
0.11
  
$
(0.05
)
$
(0.49
)
  
$
(0.31
)
$
(0.43
)
RIGL - All Other Investments per share-diluted
 
$
0.05
  
$
0.03
  
$
-
  
$
0.04
  
$
0.66
    
$
0.18
  
$
0.70
  
                                           
OPERATING INCOME PER SHARE *
                                          
                                           
Net income per share-diluted
  
$
0.98
  
$
0.96
  
$
1.01
  
$
0.94
  
$
0.80
    
$
2.50
  
$
2.75
  
RIGL - Derivatives per share-diluted
    
0.05
   
(0.07
)
  
0.11
   
(0.05
)
  
(0.49
)
    
(0.31
)
  
(0.43
)
RIGL - All Other Investments, net of participating income per share-diluted
    
0.03
   
0.01
   
0.00
   
0.04
   
0.66
     
0.13
   
0.70
 
Change in accounting principle
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
     
0.00
   
0.00
 
Operating income per share-diluted
  
$
0.90
  
$
1.02
  
$
0.90
  
$
0.95
  
$
0.63
    
$
2.68
  
$
2.48
  
 
 
                                           
NET OPERATING INCOME *
                                          
                                           
Net income
  
$
69,891
  
$
68,562
  
$
72,137
  
$
66,941
  
$
57,301
    
$
178,005
  
$
196,379
  
RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities
    
3,175
   
(5,054
)
  
8,227
   
(3,994
)
  
(35,197
)
    
(22,196
)
  
(30,964
)
RIGL - All Other Investments net of tax, amortization, and participating income
    
2,242
   
1,021
   
(113
)
  
3,216
   
46,972
     
9,251
   
50,075
 
Change in accounting principle
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net operating income
  
$
64,474
  
$
72,595
  
$
64,023
  
$
67,719
  
$
45,526
    
$
190,950
  
$
177,268
  
                                           
PRETAX OPERATING INCOME **
                                          
                                           
Income before income tax
  
$
106,867
  
$
104,834
  
$
110,657
  
$
102,686
  
$
87,898
    
$
272,179
  
$
301,241
  
RIGL - Derivatives
    
7,662
   
(6,154
)
  
13,337
   
(4,799
)
  
(55,302
)
    
(24,727
)
  
(46,764
)
Derivative gains related to corporate debt, investments & annuities
    
(2,777
)
  
(1,621
)
  
(680
)
  
(1,346
)
  
1,154
     
(9,421
)
  
(872
)
RIGL - All Other Investments, net of participating income
    
3,612
   
2,622
   
(173
)
  
6,495
   
78,645
     
38,087
   
84,967
 
Related amortization of DAC & VOBA
    
(162
)
  
(1,052
)
  
0
   
(1,549
)
  
(6,379
)
    
(23,854
)
  
(7,928
)
Pretax operating income
  
$
98,532
  
$
111,039
  
$
98,173
  
$
103,885
  
$
69,780
    
$
292,094
  
$
271,838
  
 
* "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
          
Draft
Invested Asset Summary
          
11/7/2006
(Dollars in millions)
          
Page 6
(Unaudited)
            
   
3RD QTR
4TH QTR
1ST QTR
2ND QTR
3RD QTR
   
2005
2005
2006
2006
2006
Total Portfolio
            
             
Fixed Income
  
$15,824.4
$15,472.4
$14,965.9
$14,901.3
$21,146.3
Mortgage Loans
  
3,101.8
3,287.7
3,411.3
3,537.8
3,650.4
Real Estate
  
92.3
72.9
63.9
57.1
52.3
Equities
  
115.6
121.0
123.5
121.2
124.5
Policy Loans
  
463.5
458.8
456.1
454.2
835.8
Short Term Investments
  
606.2
776.1
833.6
734.0
1,377.2
Other Long Term Investments
  
286.5
279.7
269.3
290.4
290.3
Total Invested Assets
  
$20,490.3
$20,468.7
$20,123.7
$20,096.1
$27,476.8
             
Fixed Income
            
             
Corporate Bonds
  
$7,489.8
$6,821.4
$7,054.1
$6,571.3
$10,247.2
Mortgage Backed Securities
  
6,348.2
6,050.8
6,050.9
5,900.0
8,299.4
US Govt Bonds
  
88.3
843.0
199.7
908.4
654.4
Public Utilities
  
1,844.4
1,704.3
1,615.9
1,477.2
1,821.0
States, Municipals and Political Subdivisions
  
50.9
50.2
45.0
44.1
124.0
Preferred Securities
  
2.6
2.5
0.1
0.1
0.1
Convertibles and Bonds with Warrants
  
0.2
0.2
0.2
0.2
0.2
Total Fixed Income Portfolio
  
$15,824.4
$15,472.4
$14,965.9
$14,901.3
$21,146.3
             
Fixed Income - Quality
            
             
AAA
 
40.9%
44.7%
41.9%
46.0%
44.8%
AA
  
4.4%
3.6%
3.6%
3.4%
6.6%
A
  
17.0%
15.0%
16.7%
16.2%
18.5%
BBB
  
30.5%
29.6%
30.3%
29.6%
28.1%
BB or Less
  
7.2%
7.1%
7.5%
4.8%
2.0%
Redeemable Preferred Stock
  
0.0%
0.0%
0.0%
0.0%
0.0%
   
100.0%
100.0%
100.0%
100.0%
100.0%
Mortgage Loans - Type
            
             
Retail
  
68.6%
68.3%
68.2%
68.1%
68.1%
Apartments
  
12.3%
11.9%
10.9%
10.6%
10.6%
Office Buildings
  
9.8%
10.3%
10.7%
11.2%
11.7%
Warehouses
  
8.2%
8.1%
8.0%
7.8%
7.2%
Miscellaneous
  
1.1%
1.4%
2.2%
2.3%
2.4%
   
100.0%
100.0%
100.0%
100.0%
100.0%
Problem Mortgage Loans
            
             
60 Days Past Due
  
$1.9
$3.1
$0.0
$0.0
$0.0
90 Days Past Due
  
5.4
5.1
5.4
3.1
6.6
Renegotiated Loans
  
5.5
5.6
5.6
0.2
0.2
Foreclosed Real Estate
  
5.0
8.4
1.6
5.1
5.1
 
  
$17.8
$22.2
$12.6
$8.3
$11.8
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Life Marketing and Acquisitions - Quarterly Earnings Trends
                            
11/7/2006
  
(Dollars in thousands)
                            
Page 7
 
(Unaudited)
                                
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
9 MOS
  
9 MOS
  
   
2005
  
2005
  
2006
  
2006
  
2006
    
2005
  
2006
  
LIFE MARKETING
                                
                                 
REVENUES
                                
Gross Premiums and Policy Fees
  
$
297,098
  
$
329,423
  
$
325,364
  
$
325,496
  
$
327,355
    
$
861,200
  
$
978,215
  
Reinsurance Ceded
    
(204,572
)
  
(261,769
)
  
(208,631
)
  
(237,148
)
  
(206,269
)
    
(640,286
)
  
(652,048
)
Net Premiums and Policy Fees
    
92,526
   
67,654
   
116,733
   
88,348
   
121,086
     
220,914
   
326,167
 
Net investment income
    
66,847
   
71,318
   
72,853
   
75,474
   
80,444
     
190,541
   
228,771
 
Realized investment gains (losses)
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Other income
    
27,577
   
27,962
   
29,339
   
32,735
   
32,278
     
83,240
   
94,352
 
Total Revenues
    
186,950
   
166,934
   
218,925
   
196,557
   
233,808
     
494,695
   
649,290
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
112,119
   
117,552
   
135,899
   
122,432
   
147,213
     
274,896
   
405,544
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
23,831
   
(7,383
)
  
19,466
   
1,636
   
21,689
     
63,071
   
42,791
 
Other operating expenses
    
12,986
   
8,591
   
22,779
   
21,264
   
24,636
     
41,241
   
68,679
 
Total Benefits and Expenses
    
148,936
   
118,760
   
178,144
   
145,332
   
193,538
     
379,208
   
517,014
 
                                               
INCOME BEFORE INCOME TAX
 
$
38,014
  
$
48,174
  
$
40,781
  
$
51,225
  
$
40,270
    
$
115,487
  
$
132,276
  
                                               
ACQUISITIONS
                                              
                                               
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
64,265
  
$
65,134
  
$
62,986
  
$
63,203
  
$
188,491
    
$
195,869
  
$
314,680
  
Reinsurance Ceded
    
(17,668
)
  
(19,245
)
  
(16,642
)
  
(16,617
)
  
(112,636
)
    
(54,954
)
  
(145,895
)
Net Premiums and Policy Fees
    
46,597
   
45,889
   
46,344
   
46,586
   
75,855
     
140,915
   
168,785
 
Net investment income
    
55,366
   
55,022
   
54,490
   
53,626
   
152,834
     
168,179
   
260,950
 
RIGL - Derivatives
    
0
   
0
   
0
   
0
   
(58,544
)
    
0
   
(58,544
)
RIGL - All Other Investments
    
0
   
0
   
0
   
0
   
74,628
     
0
   
74,628
 
Other income
    
251
   
540
   
617
   
293
   
4,774
     
1,065
   
5,684
 
Total Revenues
    
102,214
   
101,451
   
101,451
   
100,505
   
249,547
     
310,159
   
451,503
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
69,312
   
69,131
   
67,454
   
66,984
   
178,946
     
204,495
   
313,384
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
6,197
   
6,619
   
6,335
   
6,809
   
15,142
     
20,453
   
28,286
 
Other operating expenses
    
7,195
   
7,108
   
7,756
   
7,754
   
12,501
     
23,193
   
28,011
 
Total Benefits and Expenses
    
82,704
   
82,858
   
81,545
   
81,547
   
206,589
     
248,141
   
369,681
 
                                               
INCOME BEFORE INCOME TAX
   
19,510
   
18,593
   
19,906
   
18,958
   
42,958
     
62,018
   
81,822
 
 
 
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL - Derivatives
    
0
   
0
   
0
   
0
   
(58,544
)
    
0
   
(58,544
)
Less: RIGL - All Other Investments
    
0
   
0
   
0
   
0
   
74,628
     
0
   
74,628
 
Add back: Related amortization of deferred policy acquisition costs
    
0
   
0
   
0
   
0
   
5,186
     
0
   
5,186
 
                                               
PRETAX OPERATING INCOME
  
$
19,510
  
$
18,593
  
$
19,906
  
$
18,958
  
$
32,060
    
$
62,018
  
$
70,924
  
 
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Life Marketing and Annuities Data
                            
11/7/2006
  
(Dollars in thousands)
                            
Page 8
  
(Unaudited)
                                
   
2005
  
2005
  
2006
  
2006
  
2006
    
9 MOS
  
9 MOS
  
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
2005
  
2006
  
LIFE MARKETING
                                
                                 
                                 
SALES BY PRODUCT
                                
Term
  
$
27,975
  
$
34,538
  
$
37,476
  
$
35,733
  
$
39,552
    
$
89,344
  
$
112,761
  
U/L
    
50,308
   
40,674
   
31,488
   
16,109
   
13,028
     
124,694
   
60,625
 
VUL
    
1,698
   
1,432
   
1,285
   
1,628
   
1,697
     
4,033
   
4,610
 
Total
  
$
79,981
  
$
76,644
  
$
70,249
  
$
53,470
  
$
54,277
    
$
218,071
  
$
177,996
  
                                               
SALES BY DISTRIBUTION
                                             
Brokerage general agents
  
$
36,072
  
$
38,836
  
$
38,179
  
$
32,644
  
$
33,733
    
$
101,739
  
$
104,556
  
Independent agents
    
21,788
   
17,652
   
13,800
   
9,216
   
7,814
     
57,912
   
30,830
 
Stockbrokers/banks
    
19,741
   
15,663
   
13,567
   
8,082
   
7,116
     
50,304
   
28,765
 
Direct Response & BOLI
    
2,380
   
4,493
   
4,703
   
3,528
   
5,614
     
8,116
   
13,845
 
Total
  
$
79,981
  
$
76,644
  
$
70,249
  
$
53,470
  
$
54,277
    
$
218,071
  
$
177,996
  
                                               
ANNUITIES
                                              
                                               
SALES
                                              
Variable Annuity
 
$
74,659
  
$
70,220
  
$
73,731
  
$
81,206
  
$
76,299
    
$
241,991
  
$
231,236
  
Immediate Annuity
   
25,606
   
32,653
   
45,045
   
49,113
   
59,292
     
79,276
   
153,450
 
Single Premium Deferred Annuity
                            
151,172
     
0
   
151,172
 
Market Value Adjusted Annuity
   
23,032
   
31,644
   
28,373
   
58,464
   
112,511
     
82,580
   
199,348
 
Equity Indexed Annuity
    
21,188
   
20,506
   
18,672
   
29,002
   
16,975
     
28,379
   
64,649
 
Total
  
$
144,485
  
$
155,023
  
$
165,821
  
$
217,785
  
$
416,249
    
$
432,226
  
$
799,855
  
                                               
PRETAX OPERATING INCOME
                                              
Variable Annuity
 
$
3,555
  
$
14,440
  
$
5,280
  
$
5,425
  
$
3,484
    
$
11,564
  
$
14,189
  
Fixed Annuity
   
1,372
   
357
   
(539
)
  
725
   
1,867
     
5,572
   
2,054
 
Total
  
$
4,927
  
$
14,797
  
$
4,741
  
$
6,150
  
$
5,351
    
$
17,136
  
$
16,243
  
                                               
DEPOSIT BALANCE
                                              
VA Fixed Annuity
 
$
232,578
  
$
226,437
  
$
223,265
  
$
218,951
  
$
209,135
                
VA Separate Account Annuity
   
2,280,264
   
2,310,117
   
2,382,736
   
2,331,932
   
2,424,837
               
Sub-total
    
2,512,842
   
2,536,554
   
2,606,001
   
2,550,883
   
2,633,972
               
Fixed Annuity
   
3,217,052
   
3,207,784
   
3,201,516
   
3,256,655
   
3,521,417
               
Total
  
$
5,729,894
  
$
5,744,338
  
$
5,807,517
  
$
5,807,538
  
$
6,155,389
                
 
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Annuities, Stable Value Contracts, and Asset Protection
                            
11/7/2006
  
Quarterly Earnings Trends (Dollars in thousands)
                            
Page 9
  
(Unaudited)
  
 
  
 
  
 
  
 
  
 
    
 
  
 
  
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
9 MOS
  
9 MOS
  
   
2005
  
2005
  
2006
  
2006
  
2006
    
2005
  
2006
  
ANNUITIES
                                
                                 
REVENUES
                                
Gross Premiums and Policy Fees
  
$
8,057
  
$
8,047
  
$
8,144
  
$
8,000
  
$
7,794
    
$
23,763
  
$
23,938
  
Reinsurance Ceded
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net Premiums and Policy Fees
    
8,057
   
8,047
   
8,144
   
8,000
   
7,794
     
23,763
   
23,938
 
Net investment income
    
54,008
   
53,756
   
53,494
   
54,865
   
56,475
     
164,944
   
164,834
 
RIGL - Derivatives
    
163
   
(352
)
  
(651
)
  
672
   
(1,808
)
    
1
   
(1,787
)
RIGL - All Other Investments
    
70
   
1,812
   
(90
)
  
1,598
   
3,412
     
29,168
   
4,920
 
Other income
    
2,133
   
1,649
   
2,899
   
2,343
   
2,469
     
6,123
   
7,711
 
Total Revenues
    
64,431
   
64,912
   
63,796
   
67,478
   
68,342
     
223,999
   
199,616
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
44,596
   
46,428
   
47,313
   
46,883
   
48,233
     
141,363
   
142,429
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
7,663
   
(3,242
)
  
5,126
   
7,383
   
7,778
     
40,754
   
20,287
 
Other operating expenses
    
7,174
   
6,170
   
6,706
   
7,013
   
4,761
     
19,431
   
18,480
 
Total Benefits and Expenses
    
59,433
   
49,356
   
59,145
   
61,279
   
60,772
     
201,548
   
181,196
 
                                               
INCOME BEFORE INCOME TAX
   
4,998
   
15,556
   
4,651
   
6,199
   
7,570
     
22,451
   
18,420
 
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL - Derivatives
    
163
   
(352
)
  
(651
)
  
672
   
(1,808
)
    
1
   
(1,787
)
Add back: Derivative gains related to equity indexed annuities
    
0
   
(351
)
  
(651
)
  
672
   
(1,808
)
    
0
   
(1,787
)
Less: RIGL - All Other Investments
    
70
   
1,812
   
(90
)
  
1,598
   
3,412
     
29,168
   
4,920
 
Add back: Related amortization of deferred policy acquisition costs
    
162
   
1,052
   
0
   
1,549
   
1,193
     
23,854
   
2,742
 
                                               
PRETAX OPERATING INCOME
  
$
4,927
  
$
14,797
  
$
4,741
  
$
6,150
  
$
5,351
    
$
17,136
  
$
16,242
  
 
 
                                               
STABLE VALUE CONTRACTS
                                              
                                               
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
    
$
-
  
$
-
  
Reinsurance Ceded
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net Premiums and Policy Fees
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net investment income
    
79,118
   
81,641
   
82,233
   
82,350
   
80,734
     
229,074
   
245,317
 
RIGL - Derivatives
    
416
   
(147
)
  
312
   
98
   
(13
)
    
398
   
397
 
RIGL - All Other Investments
    
884
   
(19,922
)
  
(5,166
)
  
612
   
4,534
     
3,606
   
(20
)
Other income
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Total Revenues
    
80,418
   
61,572
   
77,379
   
83,060
   
85,255
     
233,078
   
245,694
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
62,747
   
66,134
   
67,463
   
68,415
   
68,154
     
180,000
   
204,032
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
1,240
   
1,249
   
1,229
   
1,136
   
1,064
     
3,445
   
3,429
 
Other operating expenses
    
1,388
   
1,086
   
1,197
   
999
   
1,087
     
4,003
   
3,283
 
Total Benefits and Expenses
    
65,375
   
68,469
   
69,889
   
70,550
   
70,305
     
187,448
   
210,744
 
                                               
INCOME BEFORE INCOME TAX
    
15,043
   
(6,897
)
  
7,490
   
12,510
   
14,950
     
45,630
   
34,950
 
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL-Derivatives
    
416
   
(147
)
  
312
   
98
   
(13
)
    
398
   
397
 
Less: RIGL-All Other Investments
    
884
   
(19,922
)
  
(5,166
)
  
612
   
4,534
     
3,606
   
(20
)
                                               
PRETAX OPERATING INCOME
  
$
13,743
  
$
13,172
  
$
12,344
  
$
11,800
  
$
10,429
    
$
41,626
  
$
34,573
  
                                               
ASSET PROTECTION
                                              
                                               
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
106,685
  
$
102,997
  
$
100,690
  
$
100,203
  
$
104,564
    
$
326,906
  
$
305,457
  
Reinsurance Ceded
    
(60,661
)
  
(68,234
)
  
(55,393
)
  
(53,997
)
  
(52,775
)
    
(182,196
)
  
(162,165
)
Net Premiums and Policy Fees
    
46,024
   
34,763
   
45,297
   
46,206
   
51,789
     
144,710
   
143,292
 
Net investment income
    
8,075
   
8,112
   
7,808
   
8,076
   
8,649
     
24,277
   
24,533
 
Realized investment gains (losses)
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Other income
    
13,624
   
10,475
   
12,044
   
16,021
   
20,597
     
35,761
   
48,662
 
Total Revenues
    
67,723
   
53,350
   
65,149
   
70,303
   
81,035
     
204,748
   
216,487
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
27,560
   
17,537
   
22,209
   
22,870
   
26,137
     
83,940
   
71,216
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
18,052
   
16,207
   
16,920
   
16,321
   
20,713
     
53,267
   
53,954
 
Other operating expenses
    
16,009
   
13,271
   
17,282
   
22,208
   
48,586
     
48,975
   
88,076
 
Total Benefits and Expenses
    
61,621
   
47,015
   
56,411
   
61,399
   
95,436
     
186,182
   
213,246
 
                                               
INCOME BEFORE INCOME TAX
 
$
6,102
  
$
6,335
  
$
8,738
  
$
8,904
  
$
(14,401
)
  
$
18,566
  
$
3,241
  
 
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Stable Value Contracts and Asset Protection Data
                    
11/7/2006
  
(Dollars in thousands)
                            
Page 10
  
(Unaudited)
                                
   
2005
  
2005
  
2006
  
2006
  
2006
    
9 MOS
  
9 MOS
  
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
2005
  
2006
  
STABLE VALUE CONTRACTS
              
 
  
 
            
               
 
  
 
            
SALES
              
 
  
 
            
GIC
  
$
20,500
  
$
46,800
  
$
46,200
  
$
111,400
  
$
107,500
    
$
49,550
  
$
265,100
  
GFA - Direct Institutional
    
0
   
100,000
   
0
   
0
   
0
     
0
   
0
 
GFA - Non-Registered
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
GFA - Registered - Institutional
    
300,000
   
35,000
   
0
   
0
   
0
     
1,000,000
   
0
 
GFA - Registered - Retail
    
20,790
   
31,501
   
40,841
   
13,078
   
54,743
     
149,430
   
108,662
 
Total
 
$
341,290
  
$
213,301
  
$
87,041
  
$
124,478
  
$
162,243
    
$
1,198,980
  
$
373,762
  
                                           
DEPOSIT BALANCE
                                            
Quarter End Balance
 
$
5,900,740
  
$
6,057,721
  
$
5,873,092
  
$
5,764,856
  
$
5,515,633
    
$
5,900,740
  
$
5,515,633
  
Average Daily Balance
 
$
5,973,325
  
$
5,985,502
  
$
5,976,606
  
$
5,853,111
  
$
5,662,236
    
$
5,834,429
  
$
5,829,589
  
                                           
OPERATING SPREAD
    
0.94
%
  
0.90
%
  
0.84
%
  
0.82
%
  
0.75
%
    
0.98
%
  
0.81
%
                                           
                                 
   
 2005
  
 2005
  
 2006
  
 2006
  
 2006
    
 9 MOS
  
 9 MOS
  
 
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
2005
  
2006
  
ASSET PROTECTION
                                          
                                           
SALES
                                         
Credit
  
$
56,749
  
$
50,602
  
$
31,847
  
$
39,952
  
$
41,488
    
$
158,276
  
$
113,287
  
Service Contracts
    
65,301
   
53,780
   
53,717
   
73,347
   
79,183
     
174,876
   
206,247
 
Other
    
14,812
   
13,776
   
16,921
   
22,900
   
35,792
     
37,454
   
75,613
 
Total
  
$
136,862
  
$
118,158
  
$
102,485
  
$
136,199
  
$
156,463
    
$
370,606
  
$
395,147
  
 
 
PROTECTIVE LIFE CORPORATION
                            
Draft
  
Corporate & Other Segment - Quarterly Earnings Trends
                            
11/7/2006
  
(Dollars in thousands)
                            
Page 11
  
(Unaudited)
  
 
                    
 
  
 
  
   
3RD QTR
  
4TH QTR
  
1ST QTR
  
2ND QTR
  
3RD QTR
    
9 MOS
  
9 MOS
  
   
2005
  
2005
  
2006
  
2006
  
2006
    
2005
  
2006
  
               
 
  
 
            
REVENUES
              
 
  
 
            
Gross Premiums and Policy Fees
  
$
10,555
  
$
10,362
  
$
10,510
  
$
9,309
  
$
9,253
    
$
32,079
  
$
29,072
  
Reinsurance Ceded
    
(18
)
  
(27
)
  
(4
)
  
(7
)
  
(8
)
    
(146
)
  
(19
)
Net Premiums and Policy Fees
    
10,537
   
10,335
   
10,506
   
9,302
   
9,245
     
31,933
   
29,053
 
Net investment income
    
43,471
   
33,441
   
28,187
   
26,343
   
31,610
     
100,197
   
86,140
 
RIGL - Derivatives
    
7,083
   
(5,655
)
  
13,676
   
(5,569
)
  
5,063
     
(25,126
)
  
13,170
 
RIGL - All Other Investments
    
2,658
   
23,533
   
10,409
   
12,453
   
(3,929
)
    
11,196
   
18,933
 
Other income
    
3,792
   
3,475
   
3,637
   
2,207
   
2,237
     
10,977
   
8,081
 
Total Revenues
    
67,541
   
65,129
   
66,415
   
44,736
   
44,226
     
129,177
   
155,377
 
                                           
BENEFITS & EXPENSES
                                          
Benefits and settlement expenses
    
17,031
   
11,150
   
9,270
   
8,353
   
20,265
     
40,741
   
37,888
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
967
   
985
   
955
   
868
   
813
     
3,078
   
2,636
 
Other operating expenses
    
26,343
   
29,921
   
27,099
   
30,625
   
26,597
     
77,331
   
84,321
 
Total Benefits and Expenses
    
44,341
   
42,056
   
37,324
   
39,846
   
47,675
     
121,150
   
124,845
 
                                               
INCOME BEFORE INCOME TAX
   
23,200
   
23,073
   
29,091
   
4,890
   
(3,449
)
    
8,027
   
30,532
 
                                           
Adjustments to Reconcile to Operating Income:
                                          
Less: RIGL-Derivatives
    
7,083
   
(5,655
)
  
13,676
   
(5,569
)
  
5,063
     
(25,126
)
  
13,170
 
Less: RIGL-All Other Investments, net of participating income
    
2,658
   
20,732
   
5,083
   
4,285
   
(3,929
)
    
5,313
   
5,439
 
Add back: Derivative gains related to corporate debt and investments
    
2,777
   
1,972
   
1,331
   
674
   
654
     
9,421
   
2,659
 
                                           
PRETAX OPERATING INCOME
  
$
16,236
  
$
9,968
  
$
11,663
  
$
6,848
  
$
(3,929
)
  
$
37,261
  
$
14,582