EX-99.2 3 exh99-2.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
 
    
 
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