8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 8, 2007 (February 7, 2007)
Date of Report (Date of earliest event reported)

Protective Life Corporation

(Exact name of registrant as specified in its charter)

Delaware	001-11339	95-2492236
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

2801 Highway 280 South

Birmingham, Alabama 35223

(Address of principal executive offices and zip code)

(205) 268-1000

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CF 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 7, 2007, Registrant issued a press release and made available supplemental financial information with respect to its financial results for the quarter ended December 31, 2006. This information is included as Exhibit 99.1 and 99.2 to this Current Report and incorporated by reference herein.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this report, including Exhibits 99.1 and 99.2 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information and exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

    (c)  Exhibits:

99.1 - Press Release Dated Februay 7, 2007

99.2 - Supplemental Financial Information Dated February 7, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PROTECTIVE LIFE CORPORATION

/s/Steven G. Walker

Steven G. Walker

Senior Vice President, Controller

and Chief Accounting Officer

Dated:February 8, 2007
 

EX-99.1

  Protective Life Corporation Post Office Box 2606 Birmingham, AL 35202 Phone 205-268-1000 Exhibit 99.1

FOR IMMEDIATE RELEASE

PROTECTIVE ANNOUNCES FOURTH QUARTER 2006 EARNINGS

BIRMINGHAM, Alabama (February 7, 2007) Protective Life Corporation (NYSE: PL) today reported results for the fourth quarter of 2006. Highlights include:

·   Net income increased 13.9% to $3.94 per diluted share, compared to $3.46 per share in 2005. Net income for the fourth quarter was $1.19 per diluted share compared to $0.96 per share in the fourth quarter of 2005. Included in the current quarter’s net income were net realized investment gains of $0.28 per share, compared to net realized investment losses of $0.06 per share in the same period last year. For the year, net income included realized investment gains of $0.55 per share compared to realized investment losses of $0.24 per share in 2005.

·   Operating income in 2006 was $3.39 per diluted share, compared to $3.70 per share in 2005. Operating income for the fourth quarter was $0.91 per diluted share compared to $1.02 per share in the fourth quarter of 2005. Included in the current year’s operating income per diluted share are charges of $0.32 related to two discontinued product lines. Operating income differs from the GAAP measure, net income, in that it excludes realized investment gains (losses) and related amortization. The tables below reconcile operating income to net income for the Company and its business segments.

·   Life Marketing pretax operating income was $174.2 million in 2006 compared to $163.7 million in 2005. Pretax operating income in the fourth quarter of 2006 was $41.9 million compared to $48.2 million in the prior year’s quarter. Life Marketing sales were $227.6 million for 2006 compared to $294.7 million in 2005. Life Marketing sales were $49.6 million in the fourth quarter of 2006 compared to $76.6 million in the prior year’s quarter.

·   Pretax operating income in 2006 for the Acquisitions segment was $104.5 million compared to $80.6 million in 2005. Pretax operating income in the fourth quarter of 2006 was $33.6 million compared to $18.6 million in the fourth quarter of 2005.

·   Annuity sales were a record $1.2 billion in 2006, an increase of 104.5% over the prior year. Pretax operating income in 2006 for the Annuities segment was $24.6 million compared to $31.9 million in 2005. Pretax operating income was $8.4 million in the current quarter compared to $14.8 million in the fourth quarter of 2005.

·   The Stable Value Products segment reported pretax operating income of $12.5 million in the fourth quarter of 2006 compared to $13.2 million in the same period last year. Pretax operating income in 2006 was $47.1 million compared to $54.8 million in 2005.

·   The Asset Protection segment reported pretax operating income of $6.6 million in the fourth quarter of 2006 compared to $6.3 million in the same period last year. Pretax operating income in 2006 was $9.8 million compared to $24.9 million in 2005. The current year included a charge of $26.0 million related to the discontinued Lender’s Indemnity product line.

·   As of December 31, 2006, the Company’s assets were $39.7 billion, compared to $29.0 billion at year-end 2005, an increase of 37.0%.

·   As of December 31, 2006, share-owners’ equity per share, excluding accumulated other comprehensive income, was $32.93 compared with $29.82 a year ago. Share-owners’ equity per share, including accumulated other comprehensive income, was $33.11 compared with $31.33 a year ago.

·   Operating income return on average equity for the twelve months ended December 31, 2006 was 11.1%

·   Net income return on average equity for the twelve months ended December 31, 2006 was 12.9%.

·   At December 31, 2006, below investment gradesecurities were less than two percent of invested assets, and problem mortgage loans and foreclosed properties remained less than one percent of the commercial mortgage loan portfolio.

John D. Johns, Protective’s Chairman, President and Chief Executive Officer commented:

“We reported operating income of $0.91 per share for the fourth quarter of 2006, which was below our expectations.

Profit growth in our life insurance lines continues to be adversely affected by the pattern of earnings emergence under our capital markets securitization model and competitive forces. In addition, investment income was adversely affected by the interest rate and credit spread environment. We expect to see these effects continue into 2007, without favorable offsetting effects from prepayment fees, make-whole payments and participating commercial loan income at the levels experienced in recent quarters.

There were, however, some positive developments in the quarter. The Chase acquisition performed better than projected. We also are seeing improved term application counts in our BGA distribution system, and we launched a new, more competitive Universal Life product at Protective and completed work on a new UL product at West Coast Life. In addition, we continue to see strong sales in our annuity line, led by sales in the bank channel.

In 2007 we expect continued sales momentum in our retail franchises in both life insurance and annuities, continued good performance from our acquired business, the capacity to recommence the growth of our stable value account balance, growth in earnings in our service contract lines and solid credit performance from our investment accounts.”

2007 GUIDANCE

Based on current information, Protective expects 2007 operating income per diluted share to be between $3.60 and $3.80. Protective’s 2007 guidance excludes any reserve adjustments or unusual or unpredictable benefits or charges that might occur during the year. The 2007 guidance range is based upon many assumptions, including but not limited to: the expected pattern of financial results in the life insurance business written under our capital markets securitization structure in which profitability is not expected to emerge until approximately two years after business is written, while results continue to be affected on an ongoing basis by the ordinary course run-off of older, profitable policies; competitive pressure on pricing in our term life insurance business; and our view and expectations as to the likely effect of the interest rate environment on our business, which includes tight credit spreads, and the inversion of the yield curve and lower real estate related income due to a lower volume of prepayments and potential for reduced income from the participating mortgage loan portfolio as compared to recent years. The 2007 guidance range also assumes no positive or negative unlocking of deferred acquisition costs (DAC) or adjustments to value of businesses acquired (VOBA), and diluted weighted average shares outstanding of 71.5 million.

The Company’s actual experience in 2007 will almost certainly differ from many of the assumptions described above, due to a number of factors including, but not limited to, the risk factors set forth under “Forward Looking Statements” below and in the Company’s Form 10-K and Form 10-Q, significant changes in estimated future earnings on investment products caused by changes in the equity markets, DAC and VOBA amortization and our effective tax rate, up and down, that are difficult to anticipate or forecast.

For information relating to non-GAAP measures (operating income, share-owners’ equity per share excluding other comprehensive income, operating return on average equity, and net income return on average equity) in this press release, please refer to the disclosure at the end of this press release. All per share results used throughout this press release are presented on a diluted basis, unless otherwise noted.

THIRD QUARTER CONSOLIDATED RESULTS

($ in thousands; net of income tax)

	4Q2006	4Q2005	2006	2005
Operating income	$65,371	$72,595	$242,639	$263,545
Realized investment gains (losses) and related amortization,
net of certain derivative gains (losses)	19,811	(4,033)	38,922	(16,978)
Net Income	$85,182	$68,562	$281,561	$246,567

($ per share; net of income tax)

	4Q2006	4Q2005	2006	2005
Operating income	$0.91	$1.02	$3.39	$3.70
Realized investment gains (losses) and related amortization
Investments	0.05	0.01	0.75	0.14
Derivatives	0.23	(0.07)	(0.20)	(0.38)
Net Income	$1.19	$0.96	$3.94	$3.46

BUSINESS SEGMENT OPERATING INCOME (LOSS) BEFORE INCOME TAX

The table below sets forth business segment operating income (loss) before income tax for the periods shown:

OPERATING INCOME (LOSS) BEFORE INCOME TAX

($ in thousands)

	4Q2006	4Q2005	2005	2006
LIFE MARKETING	$41,913	$48,174	$174,189	$163,661
ACQUISITIONS	33,610	18,593	104,534	80,611
ANNUITIES	8,403	14,797	24,645	31,933
STABLE VALUE PRODUCTS	12,500	13,172	47,073	54,798
ASSET PROTECTION	6,570	6,335	9,811	24,901
CORPORATE AND OTHER	(2,807)	9,968	11,776	47,229
	$100,189	$111,039	$372,028	$403,133

In the Life Marketing and Asset Protection segments, pretax operating income equals segment income before income tax for all periods. In the Acquisitions, Annuities, Stable Value Products, and Corporate and Other segments, operating income excludes realized investment gains (losses) and related amortization as set forth in the table below.

($ in thousands)	4Q2006	4Q2005	2006	2005
Operating income before
income tax	$100,189	$111,039	$372,028	$403,133
Realized investment gains (losses)
Stable Value Contracts	784	(20,069)	1,161	(16,065)
Acquisitions	12,632	----	28,716	---
Annuities	(223)	1,811	4,697	30,980
Corporate and Other	18,638	15,077	37,247	(4,736)
Less: periodic settlements on derivatives
Corporate and Other	77	1,972	2,737	11,393
Related amortization of deferred policy
acquisition costs and value of businesses acquired
Annuities	(314)	1,052	2,428	24,906
Acquisitions	1,590	----	6,776	---
Income before income tax	$130,667	$104,834	$431,908	$377,013

Income before income tax (which, unlike operating income before income tax, does not exclude realized gains (losses) net of the related amortization of deferred policy acquisition costs (“DAC”) and value of businesses acquired (“VOBA”) and participating income from real estate ventures) for the Acquisitions segment was $126.5 million for 2006 and $80.6 million for 2005 and $44.7 million for the fourth quarter of 2006 and $18.6 million for the fourth quarter of 2005. Income before income tax for the Annuities segment was $26.9 million for 2006 and $38.0 million for 2005 and $8.5 million for the fourth quarter of 2006 and $15.6 million in the fourth quarter of 2005. Income before income tax for the Stable Value segment was $48.2 million for 2006 and $38.7 million for 2005 and $13.3 million for the fourth quarter of 2006 and a loss of $6.9 million for the fourth quarter of 2005. Income before income tax for the Corporate and Other segment was $46.3 million for 2006 and $31.1 million for 2005 and $15.8 million for the fourth quarter of 2006 and $23.1 million for the fourth quarter of 2005.

The sales statistics given in this press release are used by the Company to measure the relative progress of its marketing efforts. These statistics 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.

SALES

The table below sets forth business segment sales for the periods shown:

($ in millions)

	4Q2006	4Q2005	2006	2005
LIFE MARKETING	$49.6	$76.6	$227.6	$ 294.7
ANNUITIES	401.1	155.0	1,200.9	587.2
STABLE VALUE PRODUCTS	60.2	213.3	433.9	1,412.3
ASSET PROTECTION	140.5	118.2	535.6	488.8

BUSINESS SEGMENT HIGHLIGHTS

LIFE MARKETING: Fourth quarter pretax operating income for the Life Marketing segment was $41.9 million compared to $48.2 million for the fourth quarter of 2005. The decrease is primarily attributable to unfavorable unlocking of DAC, less favorable mortality, and one-time costs, partially offset by increased investment income. For the full year, pretax operating income for the segment was $174.2 million, an increase of 6.4% over the prior year.

Life insurance sales in the fourth quarter of 2006 and for the full year of 2006 were $49.6 million and $227.6 million, respectively. Term insurance sales in the current quarter were $32.6 million compared to $34.5 million in the prior year’s quarter. Universal life insurance sales in the fourth quarter of 2006 were $17.0 million compared to $42.1 million in the prior year’s quarter.

ACQUISITIONS: Pretax operating income in the Acquisitions segment was $33.6 million for the fourth quarter of 2006 compared to $18.6 million in the fourth quarter of 2005. Pretax operating income for the full year was $104.5 million compared to $80.6 million for 2005. The increase for the quarter and for the year is attributable to the acquisition of the Chase block of business.

ANNUITIES: Pretax operating income in the Annuities segment was $8.4 million in the fourth quarter of 2006 compared to $14.8 million in the fourth quarter of 2005. For the full year, pretax operating income was $24.6 million compared to $31.9 million in 2005. Included in the fourth quarter of 2005 and for the full year of 2005 was favorable unlocking of DAC of approximately $10.9 million and $15.9 million, respectively. Excluding the favorable unlocking of DAC, the increase is primarily attributable to growth in account balances from record sales and increased fees from equity market and fund performance.

Total annuity sales in the fourth quarter of 2006 were $401.1 million compared to $155.0 million in the prior year’s quarter. For the full year, total annuity sales were a record $1.2 billion compared to $587.2 million in the prior year. Fixed annuity sales were $309.6 million in the fourth quarter of 2006 compared to $84.8 million in the prior year’s quarter. Fixed annuity sales attributable to the Chase retail distribution system for the fourth quarter of 2006 and for the full year were $124.7 million and $275.9 million, respectively. Variable annuity sales were $91.5 million in the fourth quarter of 2006, up 30.3% compared to $70.2 million in the fourth quarter of 2005. Variable annuity sales were $322.8 million in 2006 compared to $312.2 million in 2005. Year end account balances were $6.5 billion, an increase of 14.0% over the prior year.

STABLE VALUE PRODUCTS: Pretax operating income in the Stable Value Products segment was $47.1 million for 2006 compared to $54.8 million in 2005. For the quarter, pretax operating income was $12.5 million compared to $13.2 million in the fourth quarter of 2005. Spreads in the fourth quarter of 2006 were 93 basis points as compared to 90 basis points in the fourth quarter of 2005. For the full year, spreads were 84 basis points compared to 96 basis points in 2005. The increase in spreads for the quarter is primarily attributable to higher yields. The decrease in spreads for the year is attributable to higher interest expense. Account balances ended the year at $5.5 billion.

ASSET PROTECTION: The Asset Protection segment had pretax operating income of $9.8 million for 2006 compared to $24.9 million in 2005. For the current quarter, pretax operating income was $6.6 million compared to $6.3 million for the fourth quarter of 2005. The current year included a reserve charge of $26.0 million related to the discontinued Lender’s Indemnity product line. Excluding the charge, the segment’s pretax operating income was $35.8 million for 2006 and the resulting increase for the year is primarily attributable to an increase in earnings from the service contract lines, the acquisition of Western General and an improvement in other products earnings.

CORPORATE & OTHER: This segment consists primarily of net investment income on unallocated capital, interest expense on all debt, various other items not associated with the other segments and ancillary run-off lines of business. The segment reported a pretax operating loss of $2.8 million in the fourth quarter of 2006 compared to pretax operating income of $10.0 million in the fourth quarter of 2005. The decrease is primarily attributable to lower participating mortgage income, lower investment income on unallocated capital and an increase in interest expense. For the full year, pretax operating income was $11.8 million compared to $47.2 million in 2005. The decrease is primarily attributable to lower participating mortgage income, lower investment income on unallocated capital, higher interest expense and reserve strengthening in the discontinued Residual Value line. The increase in interest expense for the quarter and for the year is primarily attributable to the issuance of $200 million of Subordinated Debt Securities to finance the Chase Insurance Group transaction in the third quarter of 2006 and the issuance of non-recourse funding obligations throughout the year to support the Company’s Regulation XXX transaction. Reserves were strengthened in the discontinued Residual Value line $9.0 million in 2006 compared to reserve strengthening of $5.0 million in 2005.

CONFERENCE CALL

There will be a conference call for management to discuss the quarterly results with analysts and professional investors on February 8, 2007 at 10:00 a.m. Eastern. A recording of the call will be available from 12:00 p.m. Eastern February 8 until midnight February 15. The recording may be accessed by calling 1-800-283-4216 (international callers 1-402-220-9033).

The public may listen to a simultaneous webcast of the call on the homepage of the Company's web site at www.protective.com. A recording of the webcast will also be available from 12:00 p.m. Eastern February 8 until midnight February 15.

Supplemental financial information is available on the Company’s web site at www.protective.com in the Analyst/Investor section under the financial report library titled Supplemental Financial Information.

INFORMATION RELATING TO NON-GAAP MEASURES

Throughout this press release, GAAP refers to accounting principles generally accepted in the United States of America. Consolidated and segment operating income are defined as income before income tax excluding net realized investment gains (losses) net of the related amortization of deferred policy acquisition costs (“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 consolidated and segment operating income because the derivatives are used to mitigate risk in items affecting consolidated and segment operating income. Management believes that consolidated and segment operating income 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) attributable to the normal, recurring operations of the Company’s business. 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 share-owners’ equity. The market values of fixed maturities increase or decrease as interest rates change. The Company believes that an insurance company’s share-owners’ equity per share may be difficult to analyze without disclosing the effects of recording accumulated other comprehensive income, including unrealized gains (losses) on investments.

The 2007 earnings guidance presented in this release is based on the financial measure operating income per diluted share. Net income per diluted share is the most directly comparable GAAP measure. A quantitative reconciliation of Protective’s net income per diluted share to operating income per diluted share is not calculable on a forward-looking basis because it is not possible to provide a reliable forecast of realized investment gains and losses, which typically vary substantially from period to period.

RECONCILIATION OF SHARE-OWNERS’ EQUITY PER SHARE EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME PER SHARE

($ per common share outstanding as of December 31, 2006)

Total share-owners’ equity per share	$33.11
Less: Accumulated other comprehensive income per share	(0.18)
Total share-owners’ equity per share
excluding accumulated other comprehensive income	$32.93

Operating income return on average equity and net income return on average equity are measures used by management to evaluate the Company’s performance. Operating income return on average equity for the twelve months ended December 31, 2006 is calculated by dividing operating income for this period by the average ending balance of share-owners’ equity (excluding accumulated other comprehensive income) for the five most recent quarters. Net income return on average equity for the twelve months ended December 31, 2006, is calculated by dividing net income for this period by the average ending balance of share-owners’ equity (excluding accumulated other comprehensive income) for the five most recent quarters.

CALCULATION OF OPERATING INCOME RETURN ON AVERAGE EQUITY

LAST TWELVE MONTHS ENDED DECEMBER 31, 2006

($ in thousands)

Numerator:

	Three Months Ended
	March 31,  2006		June 30, 2006			Sept. 30, 2006			Dec. 31, 2006			Last Twelve Months Ended Sept. 30, 2006
Net income	$	72,137	$	66,941		$	57,301		$	85,182		$	281,561
Net of:
Realized investment gains (losses), net of income tax
Investments		(113)		4,222			51,119			3,655			58,883
Derivatives		9,092		(3,556	)		(34,772	)		17,035			(12,201	)
Related amortization of deferred policy acquisition costs and value
of businesses acquired, net of income tax benefit		---		(1,007	)		(4,147	)		(829	)		(5,983	)
Add back:
Derivative gains related to Corp. debt and investments
net of income tax		865		437			425			50			1,777
Operating Income	$	64,023	$	67,719		$	45,526		$	65,371		$	242,639

Denominator:

	Share-Owners’ Equity		Accumulated Other Comprehensive Income			Share-Owners’ Equity Excluding Accumulated Other Comprehensive Income
December 31, 2005	$	2,183,660	$	105,220		$	2,078,440
March 31, 2006		2,104,270		(35,242	)		2,139,512
June 30, 2006		2,043,711		(149,324	)		2,193,035
September 30, 2006		2,271,889		38,395			2,233,494
December 31, 2006		2,316,255		12,431			2,303,824
Total						$	10,948,305
Average						$	2,189,661
Operating Income Return on Average Equity							11.1	%

CALCULATION OF NET INCOME RETURN ON AVERAGE EQUITY

LAST TWELVE MONTHS ENDED DECEMBER 31, 2006

($ in thousands)

Numerator:

Net income - three months ended March 31, 2006	$  72,137
Net income - three months ended June 30, 2006	66,941
Net income - three months ended September 30, 2006	57,301
Net income - three months ended December 31, 2006	85,182
Net income - last twelve months ended December 31, 2006	$281,561

 

Denominator:

	Share-Owners’ Equity		Accumulated Other Comprehensive Income			Share-Owners’ Equity Excluding Accumulated Other Comprehensive Income
December 31, 2005		2,183,660		105,220			2,078,440
March 31, 2006		2,104,270		(35,242	)		2,139,512
June 30, 2006		2,043,711		(149,324	)		2,193,035
September 30, 2006		2,271,889		38,395			2,233,494
December 31, 2006		2,316,255		12,431			2,303,824
Total						$	10,948,305
Average						$	2,189,661
Net Income Return on Average Equity							12.9	%

FORWARD-LOOKING STATEMENTS

This release and the supplemental financial information provided includes “forward-looking statements” which express expectations of future events and/or results. All statements based on future expectations rather than on historical facts are forward-looking statements that involve a number of risks and uncertainties, and the Company cannot give assurance that such statements will prove to be correct. The factors which could affect the Company’s future results include, but are not limited to, general economic conditions and the following known trends and uncertainties: the Company is exposed to the risks of natural disasters, pandemics, malicious and terrorist acts that could adversely affect the Company’s operations; the Company operates in a mature, highly competitive industry, which could limit its ability to gain or maintain its position in the industry; a ratings downgrade could adversely affect the Company; the Company’s policy claims fluctuate from period to period, and actual results could differ from its expectations, including, but not limited to, expectations of mortality, morbidity, casualty losses, persistency, lapses, customer mix and behavior and projected level of used vehicle values; the Company’s results may be negatively affected should actual experience differ from management’s assumptions and estimates which by their nature are imprecise and subject to changes and revision over time; the use of reinsurance, and any change in the magnitude of reinsurance, introduces variability in the Company’s statements of income; the Company could be forced to sell investments at a loss to cover policyholder withdrawals; interest rate fluctuations could negatively affect the Company’s spread income or otherwise impact its business, including, but not limited to, the volume of sales, the profitability of products, investment performance, and asset liability management; equity market volatility could negatively impact the Company’s business, particularly with respect to the Company’s variable products; insurance companies are highly regulated and subject to numerous legal restrictions and regulations, including, but not limited to, restrictions relating to premium rates, reserve requirements, marketing practices, advertising, privacy, policy forms, reinsurance reserve requirements, acquisitions, and capital adequacy, and the Company cannot predict whether or when regulatory actions may be taken that could adversely affect the Company or its operations; changes to tax law or interpretations of existing tax law could adversely affect the Company, including, but not limited to, the demand for and profitability of its insurance products and the Company’s ability to compete with non-insurance products; financial services companies are frequently the targets of litigation, including, but not limited to, class action litigation, which could result in substantial judgments, and the Company, like other financial services companies, in the ordinary course of business is involved in litigation and arbitration; publicly held companies in general and the financial services industry in particular are sometimes the target of law enforcement investigations and the focus of increased regulatory scrutiny; the Company’s ability to maintain low unit costs is dependent upon the level of new sales and persistency of existing business, and a change in persistency may result in higher claims and/or higher or more rapid amortization of deferred policy acquisition costs and thus higher unit costs and lower reported earnings; the Company’s investments, including, but not limited to, the Company’s invested assets, derivative financial instruments and commercial mortgage loan portfolio, are subject to market and credit risks; the Company may not realize its anticipated financial results from its acquisitions strategy, which is dependent on factors such as the availability of suitable acquisitions, the availability of capital to fund acquisitions and the realization of assumptions relating to the acquisition; the Company may not be able to achieve the expected results from its recent acquisition; the Company is dependent on the performance of others, including, but not limited to, distributors, third-party administrators, fund managers, reinsurers and other service providers, and, as with all financial services companies, its ability to conduct business is dependent upon consumer confidence in the industry and its products; the Company’s reinsurers could fail to meet assumed obligations, increase rates, or be subject to adverse developments that could affect the Company, and the Company’s ability to compete is dependent on the availability of reinsurance, which has become more costly and less available in recent years, or other substitute capital market solutions; the success of the Company’s captive reinsurance program and related marketing efforts is dependent on a number of factors outside the control of the Company, including, but not limited to, continued access to capital markets and the overall tax position of the Company; computer viruses or network security breaches could affect the data processing systems of the Company or its business partners, destroying valuable data or making it difficult to conduct business; the Company’s ability to grow depends in large part upon the continued availability of capital, which has been negatively impacted by recent regulatory action, and future marketing plans are dependent on access to the capital markets through securitization; and new accounting or statutory rules or changes to existing accounting or statutory rules could negatively impact the Company. Please refer to Exhibit 99 of the Company’s most recent Form 10-K/10-Q for more information about these factors which could affect future results.

CONTACTS:

Gary Corsi

Executive Vice President and Chief Financial Officer

(205) 268-2226

Chip Wann

Vice President, Corporate Finance/Investor Relations

(205) 268-6461

EX-99.2

  Protective Life Corporation Post Office Box 2606 Birmingham, AL 35202 Phone 205-268-1000 Exhibit 99.2

SUPPLEMENTAL FINANCIAL INFORMATION

The following document contains supplemental quarterly statistical financial information for the quarter ended December 31, 2006. This document is dated February 7, 2007. 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
Quarterly Financial Highlights
(Dollars in Thousands)
(Unaudited)
	4TH QTR	1ST QTR	2ND QTR	3RD QTR	4TH QTR	12 MOS	12 MOS
Pretax Operating Income *	2005	2006	2006	2006	2006	2005	2006
Life Marketing	$48,174	$40,781	$51,225	$40,270	$41,913	$163,661	$174,189
Acquisitions	18,593	19,906	18,958	32,060	33,610	80,611	104,534
Annuities	14,797	4,741	6,150	5,351	8,403	31,933	24,645
Stable Value Contracts	13,172	12,344	11,800	10,429	12,500	54,798	47,073
Asset Protection	6,335	8,738	8,904	(14,401)	6,570	24,901	9,811
Corporate & Other	9,968	11,663	6,848	(3,928)	(2,807)	47,229	11,776
Total Pretax Operating Income	$111,039	$98,173	$103,885	$69,781	$100,189	$403,133	$372,028
Balance Sheet Data
Total GAAP Assets	$28,966,993	$28,952,024	$29,070,910	$38,805,973	$39,679,869
Share Owners' Equity	$2,183,660	$2,104,270	$2,043,711	$2,271,889	$2,316,255
Share Owners' Equity (excluding accumulated other comprehensive income) **	$2,078,440	$2,139,512	$2,193,035	$2,233,494	$2,303,824
Stock Data
Closing Price	$43.77	$49.74	$46.62	$45.75	$47.50	$39.30	$47.50
Average Shares Outstanding
Basic	70,672,518	70,752,202	70,805,802	70,811,292	70,811,686	70,562,186	70,795,453
Diluted	71,496,555	71,559,255	71,381,677	71,355,221	71,204,210	71,350,541	71,374,064

* "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating Income" may be Compared. See Page 5 for a reconciliation of "Pretax Operating Income" to "Income Before Income Tax".

** "Share-owners' equity excluding accumulated other comprehensive income" is a non-GAAP financial measure.  "Share-owners' equity" is a GAAP financial measure to which "Share-owners' equity excluding accumulated other comprehensive income" may be compared. See Page 4 for a reconciliation of "Share-owners' equity excluding accumulated other comprehensive income" to "Share-owners' equity".

PROTECTIVE LIFE CORPORATION
GAAP Consolidated Statements Of Income
(Dollars in thousands)
(Unaudited)
		4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS			12 MOS
		2005			2006			2006			2006			2006			2005			2006
REVENUES
Gross Premiums and Policy Fees	$	515,963		$	507,694		$	506,211		$	637,457		$	665,974		$	1,955,780		$	2,317,336
Reinsurance Ceded		(349,275	)		(280,670	)		(307,769	)		(371,688	)		(411,088	)		(1,226,857	)		(1,371,215	)
Net Premiums and Policy Fees		166,688			227,024			198,442			265,769			254,886			728,923			946,121
Net investment income		303,290			299,065			300,734			410,746			409,233			1,180,502			1,419,778
RIGL - Derivatives		(6,154	)		13,337			(4,799	)		(55,302	)		25,248			(30,881	)		(21,516	)
RIGL - All Other Investments		5,423			5,153			14,663			78,645			5,623			49,393			104,084
Other income		44,101			48,536			53,599			62,355			66,180			181,267			230,670
Total Revenues		513,348			593,115			562,639			762,213			761,170			2,109,204			2,679,137
BENEFITS & EXPENSES
Benefits and settlement expenses		327,932			349,608			335,937			488,948			466,276			1,253,367			1,640,769
Amortization of deferred policy acquisition costs and value of businesses acquired		14,435			50,031			34,153			67,199			55,040			198,503			206,423
Other operating expenses		51,805			67,188			74,807			97,711			87,551			223,685			327,257
Interest on indebtedness		14,342			15,631			15,056			20,457			21,636			56,636			72,780
Total Benefits and Expenses		408,514			482,458			459,953			674,315			630,503			1,732,191			2,247,229
INCOME BEFORE INCOME TAX		104,834			110,657			102,686			87,898			130,667			377,013			431,908
Income tax expense		36,272			38,520			35,745			30,597			45,485			130,446			150,347
Discontinued Operations		0			0			0			0			0			0			0
NET INCOME	$	68,562		$	72,137		$	66,941		$	57,301		$	85,182		$	246,567		$	281,561
PER SHARE DATA FOR QUARTER
Operating income-diluted *		$ 1.02			$ 0.90			$ 0.95			$ 0.63			$ 0.91
RIGL - Derivatives net of gains related to corp debt, investments and annuities		(0.07	)		0.11			(0.05	)		(0.49	)		0.23
RIGL - All Other Investments, net of participating income		0.01			0.00			0.04			0.66			0.05
Discontinued Operations		0.00			0.00			0.00			0.00			0.00
Net income-diluted		$ 0.96			$ 1.01			$ 0.94			$ 0.80			$ 1.19
Average shares outstanding-diluted		71,496,555			71,559,255			71,381,677			71,355,221			71,204,210
Dividends paid		$ 0.195			$ 0.195			$ 0.215			$ 0.215			$ 0.215
PER SHARE DATA FOR YTD
Operating income-diluted *		$ 3.70			$ 0.90			$ 1.85			$ 2.48			$ 3.39			$ 3.70			$ 3.39
RIGL - Derivatives net of gains related to corp debt, investments and annuities		(0.38	)		0.11			0.06			(0.43	)		(0.20	)		(0.38	)		(0.20	)
RIGL - All Other Investments, net of participating income		0.14			0.00			0.04			0.70			0.75			0.14			0.75
Discontinued Operations		0.00			0.00			0.00			0.00			0.00			0.00			0.00
Net income-diluted		$ 3.46			$ 1.01			$ 1.95			$ 2.75			$ 3.94		$	3.46		$	3.94
Average shares outstanding-diluted		71,350,541			71,559,255			71,469,976			71,431,304			71,374,064			71,350,541			71,374,064
Dividends paid		$ 0.760			$ 0.195			$ 0.410			$ 0.625			$ 0.840			$ 0.760			$ 0.840

* "Operating Income" is a non-GAAP financial measure. "Net Income" is a GAAP financial measure to which "Operating Income" may be compared.

PROTECTIVE LIFE CORPORATION
GAAP Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
	2005		2006		2006		2006		2006
ASSETS
Fixed maturities	$	15,472,386	$	14,965,927	$	14,901,325	$	21,146,307	$	21,367,263
Equity securities		121,012		123,536		121,215		124,495		128,695
Mortgage loans		3,287,745		3,411,337		3,537,842		3,650,356		3,880,028
Investment real estate		72,932		63,858		57,059		52,263		38,918
Policy loans		458,825		456,147		454,225		835,817		839,502
Other long-term investments		279,676		269,345		290,427		290,304		310,225
Long-term investments		19,692,576		19,290,150		19,362,093		26,099,542		26,564,631
Short-term investments		776,139		833,567		734,021		1,377,210		1,381,073
Total investments		20,468,715		20,123,717		20,096,114		27,476,752		27,945,704
Cash		83,670		37,118		35,718		39,285		69,516
Accrued investment income		189,038		198,708		204,572		266,688		284,529
Accounts and premiums receivable		82,080		59,236		114,514		130,427		157,098
Reinsurance receivable		3,020,685		3,146,444		3,212,207		4,541,415		4,607,626
Deferred policy acquisition costs and value of businesses acquired		2,171,988		2,332,639		2,475,843		3,099,726		3,203,147
Goodwill		49,423		49,423		49,423		68,472		94,805
Property and equipment, net		47,010		45,941		44,897		44,569		43,796
Other assets		140,124		144,855		151,499		248,197		215,656
Income Tax Receivable		85,807		96,443		19,577		0		0
Assets Related to Separate Accounts
Variable Annuity		2,377,124		2,447,968		2,391,285		2,604,488		2,750,129
Variable Universal Life		251,329		269,532		275,261		285,954		307,863
Other		0		0		0		0		0
TOTAL ASSETS	$	28,966,993	$	28,952,024	$	29,070,910	$	38,805,973	$	39,679,869

PROTECTIVE LIFE CORPORATION
GAAP Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
		4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR
		2005			2006			2006			2006			2006
LIABILITIES AND SHARE-OWNERS' EQUITY
LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims	$	11,155,074		$	11,447,516		$	11,681,465		$	14,761,428		$	15,117,200
Unearned premiums		740,071			767,074			814,739			906,542			936,647
Stable value product deposits		6,057,721			5,873,092			5,764,856			5,515,633			5,513,464
Annuity deposits		3,388,005			3,330,897			3,328,479			8,943,078			8,958,089
Other policyholders' funds		147,921			147,470			144,951			340,756			328,664
Securities sold under repurchase agreements		0			0			0			0			16,949
Other liabilities		954,716			881,146			923,900			1,110,058			1,306,140
Accrued income taxes		0			0			(2,004	)		99,428			16,712
Deferred income taxes		317,317			280,219			240,774			271,894			249,257
Non-recourse funding obligations		125,000			150,000			200,000			250,000			425,000
Debt		482,532			473,032			489,532			471,132			479,132
Liabilities related to variable interest entities		448,093			442,383			435,980			435,756			420,395
Subordinated debt securities		324,743			324,743			324,743			524,743			524,743
Minority interest - subsidiaries		13,687			12,682			13,238			13,194			13,230
Liabilities related to separate accounts
Variable annuity		2,377,124			2,447,968			2,391,285			2,604,488			2,750,129
Variable universal life		251,329			269,532			275,261			285,954			307,863
Other		0			0			0			0			0
Total Liabilities		26,783,333			26,847,754			27,027,199			36,534,084			37,363,614
SHARE-OWNERS' EQUITY
Common stock		36,626			36,626			36,626			36,626			36,626
Additional paid-in capital		440,475			441,964			443,462			441,589			441,665
Treasury stock		(12,765	)		(12,079	)		(11,968	)		(11,906	)		(11,796	)
Unallocated ESOP shares		(1,610	)		(1,231	)		(1,231	)		(1,231	)		(1,231	)
Retained earnings		1,615,714			1,674,232			1,726,146			1,768,416			1,838,560
Accumulated other comprehensive income		105,220			(35,242	)		(149,324	)		38,395			12,431
Total Share-owners' Equity		2,183,660			2,104,270			2,043,711			2,271,889			2,316,255
TOTAL LIABILITIES AND EQUITY	$	28,966,993		$	28,952,024		$	29,070,910		$	38,805,973		$	39,679,869
SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity	$	31.33		$	30.11		$	29.23		$	32.49		$	33.11
Accumulated other comprehensive income		1.51			(0.50	)		(2.14	)		0.55			0.18
Excluding accumulated other comprehensive income *	$	29.82		$	30.61		$	31.37		$	31.94		$	32.93
Total Share-owners' Equity	$	2,183,660		$	2,104,270		$	2,043,711		$	2,271,889		$	2,316,255
Accumulated other comprehensive income		105,220			(35,242	)		(149,324	)		38,395			12,431
Share-owners' Equity (excluding accumulated other comprehensive income) *	$	2,078,440		$	2,139,512		$	2,193,035		$	2,233,494		$	2,303,824
Common shares outstanding		69,694,049			69,885,344			69,916,577			69,934,277			69,964,648
Treasury Stock shares		3,557,911			3,366,616			3,335,383			3,317,683			3,287,312

*"Share-owners' equity excluding accumulated other comprehensive income" is a non-GAAP financial measure.  "Share-owners' equity" is a GAAP financial measure to which "Share-owners' equity excluding accumulated other comprehensive income" may be compared.

PROTECTIVE LIFE CORPORATION
Calculation of Operating Earnings Per Share
(Dollars in thousands)
(Unaudited)
		4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS			12 MOS
		2005			2006			2006			2006			2006			2005			2006
CALCULATION OF NET INCOME PER SHARE
Net income	$	68,562		$	72,137		$	66,941		$	57,301		$	85,182		$	246,567		$	281,561
Average shares outstanding-basic		70,672,518			70,752,202			70,805,802			70,811,292			70,811,686			70,562,186			70,795,453
Average shares outstanding-diluted		71,496,555			71,559,255			71,381,677			71,355,221			71,204,210			71,350,541			71,374,064
Net income per share-basic	$	0.97		$	1.02		$	0.94		$	0.81		$	1.21		$	3.49		$	3.98
Net income per share-diluted	$	0.96		$	1.01		$	0.94		$	0.80		$	1.19		$	3.46		$	3.94
Income from continuing operations	$	68,562		$	72,137		$	66,941		$	57,301		$	85,182		$	246,567		$	281,561
EPS (basic)	$	0.97		$	1.02		$	0.94		$	0.81		$	1.21		$	3.49		$	3.98
EPS (diluted)	$	0.96		$	1.01		$	0.94		$	0.80		$	1.19		$	3.46		$	3.94
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
RIGL - Derivatives	$	(6,154	)	$	13,337		$	(4,799	)	$	(55,302	)	$	25,248		$	(30,881	)	$	(21,516	)
Derivative Gains related to Corporate Debt and Investments		(1,972	)		(1,331	)		(674	)		(654	)		(77	)		(11,393	)		(2,737	)
Derivative Gains related to Annuities		351			651			(672	)		1,808			960			351			2,747
RIGL - All Other Investments, net of participating income		2,622			(173	)		6,495			78,645			5,623			40,709			90,590
Related amortization of DAC & VOBA		(1,052	)		0			(1,549	)		(6,379	)		(1,276	)		(24,906	)		(9,204	)
		(6,205	)		12,484			(1,199	)		18,118			30,478			(26,120	)		59,880
Tax effect		2,172			(4,369	)		419			(6,341	)		(10,667	)		9,142			(20,958	)
	$	(4,033	)	$	8,115		$	(780	)	$	11,777		$	19,811		$	(16,978	)	$	38,922
RIGL - Derivatives per share-diluted	$	(0.07	)	$	0.11		$	(0.05	)	$	(0.49	)	$	0.23		$	(0.38	)	$	(0.20	)
RIGL - All Other Investments per share-diluted	$	0.03		$	-		$	0.04		$	0.66		$	0.05		$	0.22		$	0.75
OPERATING INCOME PER SHARE *
Net income per share-diluted	$	0.96		$	1.01		$	0.94		$	0.80		$	1.19		$	3.46		$	3.94
Discontinued operations		-			-			-			-			-			-			-
RIGL - Derivatives per share-diluted		(0.07	)		0.11			(0.05	)		(0.49	)		0.23			(0.38	)		(0.20	)
RIGL - All Other Investments, net of participating income per share-diluted		0.01			0.00			0.04			0.66			0.05			0.14			0.75
Change in accounting principle		0.00			0.00			0.00			0.00			0.00			0.00			0.00
Operating income per share-diluted	$	1.02		$	0.90		$	0.95		$	0.63		$	0.91		$	3.70		$	3.39
NET OPERATING INCOME *
Net income	$	68,562		$	72,137		$	66,941		$	57,301		$	85,182		$	246,567		$	281,561
RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities		(5,054	)		8,227			(3,994	)		(35,197	)		16,985			(27,250	)		(13,979	)
RIGL - All Other Investments net of tax, amortization, and participating income		1,021			(113	)		3,216			46,972			2,826			10,272			52,901
Discontinued operations		0			0			0			0			0			0			0
Change in accounting principle		0			0			0			0			0			0			0
Net operating income	$	72,595		$	64,023		$	67,719		$	45,526		$	65,371		$	263,545		$	242,639
PRETAX OPERATING INCOME **
Income before income tax and discontinued operations	$	104,834		$	110,657		$	102,686		$	87,898		$	130,667		$	377,013		$	431,908
RIGL - Derivatives		(6,154	)		13,337			(4,799	)		(55,302	)		25,248			(30,881	)		(21,516	)
Derivative gains related to corporate debt, investments & annuities		(1,621	)		(680	)		(1,346	)		1,153			883			(11,042	)		10
RIGL - All Other Investments, net of participating income		2,622			(173	)		6,495			78,645			5,623			40,709			90,590
Related amortization of DAC & VOBA		(1,052	)		0			(1,549	)		(6,379	)		(1,276	)		(24,906	)		(9,204	)
Pretax operating income	$	111,039		$	98,173		$	103,885		$	69,781		$	100,189		$	403,133		$	372,028

* "Net Operating Income" and "Operating Income Per Share" are non-GAAP financial measures. "Net Income" and "Net Income Per Share" are GAAP financial measures to which "Net Operating Income" and "Operating Income Per Share" may be compared.

** "Pretax Operating Income" is a non-GAAP financial measure. "Income Before Income Tax" is a GAAP financial measure to which "Pretax Operating Income" may be compared.

PROTECTIVE LIFE CORPORATION
Invested Asset Summary
(Dollars in millions)
(Unaudited)
	4TH QTR	1ST QTR	2ND QTR	3RD QTR	4TH QTR
	2005	2006	2006	2006	2006
Total Portfolio
Fixed Income	$15,472.4	$14,965.9	$14,901.3	$21,146.3	$21,367.3
Mortgage Loans	3,287.7	3,411.3	3,537.8	3,650.4	3,880.0
Real Estate	72.9	63.9	57.1	52.3	38.9
Equities	121.0	123.5	121.2	124.5	128.7
Policy Loans	458.8	456.1	454.2	835.8	839.5
Short Term Investments	776.1	833.6	734.0	1,377.2	1,381.1
Other Long Term Investments	279.7	269.3	290.4	290.3	310.2
Total Invested Assets	$20,468.7	$20,123.7	$20,096.1	$27,476.8	$27,945.7
Fixed Income
Corporate Bonds	$6,821.4	$7,054.1	$6,571.3	$10,247.2	$10,223.1
Mortgage Backed Securities	6,050.8	6,050.9	5,900.0	8,299.4	7,870.3
US Govt Bonds	843.0	199.7	908.4	654.4	1,373.8
Public Utilities	1,704.3	1,615.9	1,477.2	1,821.0	1,784.5
States, Municipals and Political Subdivisions	50.2	45.0	44.1	124.0	115.3
Preferred Securities	2.5	0.1	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	$15,472.4	$14,965.9	$14,901.3	$21,146.3	$21,367.3
Fixed Income - Quality
AAA	44.7%	41.9%	46.0%	44.8%	46.2%
AA	3.6%	3.6%	3.4%	6.6%	6.8%
A	15.0%	16.7%	16.2%	18.5%	18.4%
BBB	29.6%	30.3%	29.6%	28.1%	27.0%
BB or Less	7.1%	7.5%	4.8%	2.0%	1.6%
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	68.3%	68.2%	68.1%	68.1%	68.3%
Apartments	11.9%	10.9%	10.6%	10.6%	10.0%
Office Buildings	10.3%	10.7%	11.2%	11.7%	11.9%
Warehouses	8.1%	8.0%	7.8%	7.2%	7.1%
Miscellaneous	1.4%	2.2%	2.3%	2.4%	2.7%
	100.0%	100.0%	100.0%	100.0%	100.0%
Problem Mortgage Loans
60 Days Past Due	$3.1	$0.0	$0.0	$0.0	$0.0
90 Days Past Due	5.1	5.4	3.1	6.6	0.0
Renegotiated Loans	5.6	5.6	0.2	0.2	0.1
Foreclosed Real Estate	8.4	1.6	5.1	5.1	15.7
	$22.2	$12.6	$8.3	$11.8	$15.8

PROTECTIVE LIFE CORPORATION
Life Marketing and Acquisitions - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)
	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS			12 MOS
	2005			2006			2006			2006			2006			2005			2006
LIFE MARKETING
REVENUES
Gross Premiums and Policy Fees	$	329,423		$	325,364		$	325,496		$	327,355		$	349,650		$	1,190,623		$	1,327,865
Reinsurance Ceded		(261,769	)		(208,631	)		(237,148	)		(206,269	)		(254,542	)		(902,055	)		(906,590	)
Net Premiums and Policy Fees		67,654			116,733			88,348			121,086			95,108			288,568			421,275
Net investment income		71,318			72,853			75,474			80,444			79,726			261,859			308,497
Realized investment gains (losses)		0			0			0			0			0			0			0
Other income		27,962			29,339			32,735			32,278			43,539			111,202			137,891
Total Revenues		166,934			218,925			196,557			233,808			218,373			661,629			867,663
BENEFITS & EXPENSES
Benefits and settlement expenses		117,552			135,899			122,432			147,213			130,396			392,448			535,940
Amortization of deferred policy acquisition costs and value of businesses acquired		(7,383	)		19,466			1,636			21,689			17,436			55,688			60,227
Other operating expenses		8,591			22,779			21,264			24,636			28,628			49,832			97,307
Total Benefits and Expenses		118,760			178,144			145,332			193,538			176,460			497,968			693,474
INCOME BEFORE INCOME TAX	$	48,174		$	40,781		$	51,225		$	40,270		$	41,913		$	163,661		$	174,189
ACQUISITIONS
REVENUES
Gross Premiums and Policy Fees	$	65,134		$	62,986		$	63,203		$	188,491		$	199,890		$	261,003		$	514,570
Reinsurance Ceded		(19,245	)		(16,642	)		(16,617	)		(112,636	)		(110,416	)		(74,199	)		(256,311	)
Net Premiums and Policy Fees		45,889			46,344			46,586			75,855			89,474			186,804			258,259
Net investment income		55,022			54,490			53,626			152,834			152,686			223,201			413,636
RIGL - Derivatives		0			0			0			(58,544	)		13,379			0			(45,165	)
RIGL - All Other Investments		0			0			0			74,628			(747	)		0			73,881
Other income		540			617			293			4,774			359			1,605			6,043
Total Revenues		101,451			101,451			100,505			249,547			255,151			411,610			706,654
BENEFITS & EXPENSES
Benefits and settlement expenses		69,131			67,454			66,984			178,946			184,703			273,626			498,087
Amortization of deferred policy acquisition costs and value of businesses acquired		6,619			6,335			6,809			15,142			11,147			27,072			39,433
Other operating expenses		7,108			7,756			7,754			12,501			14,649			30,301			42,660
Total Benefits and Expenses		82,858			81,545			81,547			206,589			210,499			330,999			580,180
INCOME BEFORE INCOME TAX		18,593			19,906			18,958			42,958			44,652			80,611			126,474
Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives		0			0			0			(58,544	)		13,379			0			(45,165	)
Less: RIGL - All Other Investments		0			0			0			74,628			(747	)		0			73,881
Add back: Related amortization of deferred policy acquisition costs		0			0			0			5,186			1,590			0			6,776
PRETAX OPERATING INCOME	$	18,593		$	19,906		$	18,958		$	32,060		$	33,610		$	80,611		$	104,534

PROTECTIVE LIFE CORPORATION
Life Marketing and Annuities Data
(Dollars in thousands)
(Unaudited)
	4TH QTR		1ST QTR			2ND QTR		3RD QTR		4TH QTR		12 MOS		12 MOS
	2005		2006			2006		2006		2006		2005		2006
LIFE MARKETING
SALES BY PRODUCT
Term	$	34,538	$	37,477		$	35,733	$	39,552	$	32,618	$	123,882	$	145,380
U/L		40,674		31,488			16,109		13,028		15,090		165,368		75,715
VUL		1,432		1,285			1,628		1,697		1,914		5,465		6,524
Total	$	76,644	$	70,250		$	53,470	$	54,277	$	49,622	$	294,715	$	227,619
SALES BY DISTRIBUTION
Brokerage general agents	$	38,836	$	38,180		$	32,644	$	33,733	$	29,438	$	140,575	$	133,995
Independent agents		17,652		13,800			9,216		7,814		9,932		75,564		40,762
Stockbrokers/banks		15,663		13,567			8,082		7,116		6,983		65,967		35,748
Direct Response & BOLI		4,493		4,703			3,528		5,614		3,269		12,609		17,114
Total	$	76,644	$	70,250		$	53,470	$	54,277	$	49,622	$	294,715	$	227,619
ANNUITIES
SALES
Variable Annuity	$	70,220	$	73,731		$	81,206	$	76,299	$	91,526	$	312,211	$	322,762
Immediate Annuity		32,653		45,045			49,113		59,292		73,057		111,929		226,507
Single Premium Deferred Annuity									151,172		124,688		0		275,860
Market Value Adjusted Annuity		31,644		28,373			58,464		112,511		99,166		114,224		298,514
Equity Indexed Annuity		20,506		18,672			29,002		16,975		12,648		48,885		77,297
Total	$	155,023	$	165,821		$	217,785	$	416,249	$	401,085	$	587,249	$	1,200,940
PRETAX OPERATING INCOME
Variable Annuity	$	14,440	$	5,280		$	5,425	$	3,484	$	5,701	$	26,004	$	19,890
Fixed Annuity		357		(539	)		725		1,867		2,702		5,929		4,755
Total	$	14,797	$	4,741		$	6,150	$	5,351	$	8,403	$	31,933	$	24,645
DEPOSIT BALANCE
VA Fixed Annuity	$	226,437	$	223,265		$	218,951	$	209,135	$	206,237
VA Separate Account Annuity		2,310,117		2,382,736			2,331,932		2,424,837		2,559,452
Sub-total		2,536,554		2,606,001			2,550,883		2,633,972		2,765,689
Fixed Annuity		3,207,784		3,201,516			3,256,655		3,521,346		3,780,062
Total	$	5,744,338	$	5,807,517		$	5,807,538	$	6,155,318	$	6,545,751

PROTECTIVE LIFE CORPORATION
Annuities, Stable Value Contracts, and Asset Protection
Quarterly Earnings Trends (Dollars in thousands)
(Unaudited)
	4TH QTR			1ST QTR			2ND QTR		3RD QTR			4TH QTR				12 MOS			12 MOS
	2005			2006			2006		2006			2006				2005			2006
ANNUITIES
REVENUES
Gross Premiums and Policy Fees	$	8,047		$	8,144		$	8,000	$	7,794		$	8,136		$	31,810		$	32,074
Reinsurance Ceded		0			0			0		0			0			0			0
Net Premiums and Policy Fees		8,047			8,144			8,000		7,794			8,136			31,810			32,074
Net investment income		53,756			53,494			54,865		56,475			60,326			218,700			225,160
RIGL - Derivatives		(352	)		(651	)		672		(1,808	)		(960	)		(351	)		(2,747	)
RIGL - All Other Investments		1,812			(90	)		1,598		3,412			(223	)		30,980			4,697
Other income		1,649			2,899			2,343		2,469			2,725			7,772			10,436
Total Revenues		64,912			63,796			67,478		68,342			70,004			288,911			269,620
BENEFITS & EXPENSES
Benefits and settlement expenses		46,428			47,313			46,883		48,233			48,809			187,791			191,238
Amortization of deferred policy acquisition costs and value of businesses acquired		(3,242	)		5,126			7,383		7,778			7,585			37,512			27,872
Other operating expenses		6,170			6,706			7,013		4,761			5,116			25,601			23,596
Total Benefits and Expenses		49,356			59,145			61,279		60,772			61,510			250,904			242,706
INCOME BEFORE INCOME TAX		15,556			4,651			6,199		7,570			8,494			38,007			26,914
Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives		(352	)		(651	)		672		(1,808	)		(960	)		(351	)		(2,747	)
Add back: Derivative gains related to equity indexed annuities		(351	)		(651	)		672		(1,808	)		(960	)		(351	)		(2,747	)
Less: RIGL - All Other Investments		1,812			(90	)		1,598		3,412			(223	)		30,980			4,697
Add back: Related amortization of deferred policy acquisition costs		1,052			0			1,549		1,193			(314	)		24,906			2,428
PRETAX OPERATING INCOME	$	14,797		$	4,741		$	6,150	$	5,351		$	8,403		$	31,933		$	24,645

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		81,641			82,233			82,350			80,734			80,336			310,715			325,653
RIGL - Derivatives		(147	)		312			98			(13	)		210			251			607
RIGL - All Other Investments		(19,922	)		(5,166	)		612			4,534			574			(16,316	)		554
Other income		0			0			0			0			0			0			0
Total Revenues		61,572			77,379			83,060			85,255			81,120			294,650			326,814
BENEFITS & EXPENSES
Benefits and settlement expenses		66,134			67,463			68,415			68,154			65,819			246,134			269,851
Amortization of deferred policy acquisition costs and value of businesses acquired		1,249			1,229			1,136			1,064			1,009			4,694			4,438
Other operating expenses		1,086			1,197			999			1,087			1,008			5,089			4,291
Total Benefits and Expenses		68,469			69,889			70,550			70,305			67,836			255,917			278,580
INCOME BEFORE INCOME TAX		(6,897	)		7,490			12,510			14,950			13,284			38,733			48,234
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives		(147	)		312			98			(13	)		210			251			607
Less: RIGL-All Other Investments		(19,922	)		(5,166	)		612			4,534			574			(16,316	)		554
PRETAX OPERATING INCOME	$	13,172		$	12,344		$	11,800		$	10,429		$	12,500		$	54,798		$	47,073
ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees	$	102,997		$	100,690		$	100,203		$	104,564		$	99,067		$	429,903		$	404,524
Reinsurance Ceded		(68,234	)		(55,393	)		(53,997	)		(52,775	)		(46,126	)		(250,430	)		(208,291	)
Net Premiums and Policy Fees		34,763			45,297			46,206			51,789			52,941			179,473			196,233
Net investment income		8,112			7,808			8,076			8,649			8,812			32,389			33,345
Realized investment gains (losses)		0			0			0			0			0			0			0
Other income		10,475			12,044			16,021			20,597			18,087			46,236			66,749
Total Revenues		53,350			65,149			70,303			81,035			79,840			258,098			296,327
BENEFITS & EXPENSES
Benefits and settlement expenses		17,537			22,209			22,870			26,137			27,202			101,477			98,418
Amortization of deferred policy acquisition costs and value of businesses acquired		16,207			16,920			16,321			20,713			17,111			69,474			71,065
Other operating expenses		13,271			17,282			22,208			48,586			28,957			62,246			117,033
Total Benefits and Expenses		47,015			56,411			61,399			95,436			73,270			233,197			286,516
INCOME BEFORE INCOME TAX	$	6,335		$	8,738		$	8,904		$	(14,401	)	$	6,570		$	24,901		$	9,811

PROTECTIVE LIFE CORPORATION
Stable Value Contracts and Asset Protection Data
(Dollars in thousands)
(Unaudited)
	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR				12 MOS			12 MOS
	2005			2006			2006			2006			2006				2005			2006
STABLE VALUE CONTRACTS
SALES
GIC	$	46,800		$	46,200		$	111,400		$	107,500		$	29,000		$	96,350		$	294,100
GFA - Direct Institutional		100,000			0			0			0			0			100,000			0
GFA - Non-Registered		0			0			0			0			0			0			0
GFA - Registered - Institutional		35,000			0			0			0			0			1,035,000			0
GFA - Registered - Retail		31,501			40,841			13,078			54,743			31,164			180,931			139,826
Total	$	213,301		$	87,041		$	124,478		$	162,243		$	60,164		$	1,412,281		$	433,926
DEPOSIT BALANCE
Quarter End Balance	$	6,057,721		$	5,873,092		$	5,764,856		$	5,515,633		$	5,513,464		$	6,057,721		$	5,513,464
Average Daily Balance	$	5,985,502		$	5,976,606		$	5,853,111		$	5,662,236		$	5,520,061		$	5,872,635		$	5,751,796
OPERATING SPREAD		0.90	%		0.84	%		0.82	%		0.75	%		0.93	%		0.96	%		0.84	%
ASSET PROTECTION
SALES
Credit	$	50,602		$	31,847		$	39,952		$	41,488		$	27,482		$	208,878		$	140,769
Service Contracts		53,780			53,717			73,347			79,183			73,534			228,656			279,781
Other		13,776			16,921			22,900			35,792			39,456			51,230			115,069
Total	$	118,158		$	102,485		$	136,199		$	156,463		$	140,472		$	488,764		$	535,619

PROTECTIVE LIFE CORPORATION
Corporate & Other Segment - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)
	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR				12 MOS			12 MOS
	2005			2006			2006			2006			2006				2005			2006
REVENUES
Gross Premiums and Policy Fees	$	10,362		$	10,510		$	9,309		$	9,253		$	9,231		$	42,441		$	38,303
Reinsurance Ceded		(27	)		(4	)		(7	)		(8	)		(4	)		(173	)		(23	)
Net Premiums and Policy Fees		10,335			10,506			9,302			9,245			9,227			42,268			38,280
Net investment income		33,441			28,187			26,343			31,610			27,347			133,638			113,487
RIGL - Derivatives		(5,655	)		13,676			(5,569	)		5,063			12,619			(30,781	)		25,789
RIGL - All Other Investments		23,533			10,409			12,453			(3,929	)		6,019			34,729			24,952
Other income		3,475			3,637			2,207			2,237			1,470			14,452			9,551
Total Revenues		65,129			66,415			44,736			44,226			56,682			194,306			212,059
BENEFITS & EXPENSES
Benefits and settlement expenses		11,150			9,270			8,353			20,265			9,347			51,891			47,235
Amortization of deferred policy acquisition costs and value of businesses acquired		985			955			868			813			752			4,063			3,388
Other operating expenses		29,921			27,099			30,625			26,597			30,829			107,252			115,150
Total Benefits and Expenses		42,056			37,324			39,846			47,675			40,928			163,206			165,773
INCOME BEFORE INCOME TAX		23,073			29,091			4,890			(3,449	)		15,754			31,100			46,286
Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives		(5,655	)		13,676			(5,569	)		5,063			12,619			(30,781	)		25,789
Less: RIGL-All Other Investments, net of participating income		20,732			5,083			4,285			(3,929	)		6,019			26,045			11,458
Add back: Derivative gains related to corporate debt and investments		1,972			1,331			674			654			77			11,393			2,737
PRETAX OPERATING INCOME	$	9,968		$	11,663		$	6,848		$	(3,929	)	$	(2,807	)	$	47,229		$	11,776