EX-99.2 3 exhibit99_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
 
  SUPPLEMENTAL FINANCIAL INFORMATION


The following document contains supplemental quarterly statistical financial information for the quarter ended March 31, 2007. This document is dated May 8, 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)
                  
   
1ST QTR
2ND QTR
3RD QTR
4TH QTR
1ST QTR
 
3 MOS
3 MOS
 
 
2006
2006
2006
2006
2007
 
2006
2007
Pretax Operating Income *
                  
                   
Life Marketing
 
$40,781
$51,225
$40,270
$41,913
$65,280
 
$40,781
$65,280
Acquisitions
 
19,906
18,958
32,060
33,610
32,249
 
19,906
32,249
Annuities
  
4,741
6,150
5,351
8,403
5,606
 
4,741
5,606
Stable Value Contracts
  
12,344
11,800
10,429
12,500
12,186
 
12,344
12,186
Asset Protection
  
8,738
8,904
(14,401)
6,570
10,084
 
8,738
10,084
Corporate & Other
  
11,663
6,848
(3,928)
(2,807)
1,777
 
11,663
1,777
Total Pretax Operating Income
  
$98,173
$103,885
$69,781
$100,189
$127,182
 
$98,173
$127,182
                   
Balance Sheet Data
                  
                   
Total GAAP Assets
 
$28,952,024
$29,070,910
$38,805,973
$39,795,294
$39,791,832
      
Share Owners' Equity
 
$2,104,270
$2,043,711
$2,271,889
$2,313,075
$2,419,317
     
Share Owners' Equity (excluding accumulated other comprehensive income) **
 
$2,139,512
$2,193,035
$2,233,494
$2,300,644
$2,381,363
     
                   
Stock Data
                  
                   
Closing Price
  
$49.74
$46.62
$45.75
$47.50
$44.04
 
$49.74
$44.04
Average Shares Outstanding
                  
Basic
  
70,752,202
70,805,802
70,811,292
70,811,686
71,017,662
  
70,752,202
71,017,662
Diluted
  
71,559,255
71,381,677
71,355,221
71,269,472
71,487,063
  
71,559,255
71,487,063
* "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)                                  
   
1ST QTR
 
2ND QTR
 
3RD QTR
 
4TH QTR
 
1ST QTR
 
 
3 MOS
 
3 MOS
  
     
2006
    
2006
    
2006
    
2006
    
2007
      
2006
    
2007
  
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
507,694
  
$
506,211
  
$
637,457
  
$
665,975
  
$
660,824
  
 
 $
507,694
  
$
660,824
  
Reinsurance Ceded
    
(280,670
)
  
(307,769
)
  
(371,688
)
  
(411,088
)
  
(370,997
)
    
(280,670
)
  
(370,997
)
Net Premiums and Policy Fees
    
227,024
   
198,442
   
265,769
   
254,887
   
289,827
     
227,024
   
289,827
 
Net investment income
    
299,065
   
300,734
   
410,746
   
409,233
   
415,682
     
299,065
   
415,682
 
RIGL - Derivatives
    
13,337
   
(4,799
)
  
(55,302
)
  
25,248
   
(2,291
)
    
13,337
   
(2,291
)
RIGL - All Other Investments
    
5,153
   
14,663
   
78,645
   
5,623
   
13,294
     
5,153
   
13,294
 
Other income
    
48,536
   
53,599
   
62,355
   
66,175
   
76,263
     
48,536
   
76,263
 
Total Revenues
    
593,115
   
562,639
   
762,213
   
761,166
   
792,775
     
593,115
   
792,775
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
349,608
   
335,937
   
488,948
   
462,722
   
472,770
     
349,608
   
472,770
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
50,031
   
34,153
   
67,199
   
74,421
   
69,753
     
50,031
   
69,753
 
Other operating expenses
    
67,188
   
74,807
   
97,711
   
71,720
   
93,058
     
67,188
   
93,058
 
Interest on indebtedness - subsidiaries
    
4,320
   
3,926
   
5,898
   
6,489
   
8,728
     
4,320
   
8,728
 
Interest on indebtedness - holding company - other debt
    
5,565
   
5,383
   
5,198
   
5,746
   
5,737
     
5,565
   
5,737
 
Interest on indebtedness - holding company - hybrid securities
    
5,746
   
5,746
   
9,361
   
9,402
   
9,401
     
5,746
   
9,401
 
Total Benefits and Expenses
    
482,458
   
459,953
   
674,315
   
630,499
   
659,447
     
482,458
   
659,447
 
                                               
INCOME BEFORE INCOME TAX
    
110,657
   
102,686
   
87,898
   
130,667
   
133,328
     
110,657
   
133,328
 
Income tax expense
    
38,520
   
35,745
   
30,597
   
45,485
   
42,745
     
38,520
   
42,745
 
Discontinued Operations
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
NET INCOME
  
$
72,137
  
$
66,941
  
$
57,301
  
$
85,182
  
$
90,583
  
 
  $
72,137
  
$
90,583
  
                                               
PER SHARE DATA FOR QUARTER
                                              
Operating income-diluted *
  
$
0.90
  
$
0.95
  
$
0.63
  
$
0.91
  
$
1.21
                
RIGL - Derivatives net of gains related to corp debt, investments and annuities
    
0.11
   
(0.05
)
  
(0.49
)
  
0.23
   
(0.03
)
              
RIGL - All Other Investments, net of participating income
    
0.00
   
0.04
   
0.66
   
0.05
   
0.09
               
Discontinued Operations
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
               
Net income-diluted
  
$
1.01
  
$
0.94
  
$
0.80
  
$
1.19
  
$
1.27
                
Average shares outstanding-diluted
    
71,559,255
   
71,381,677
   
71,355,221
   
71,269,472
   
71,487,063
                
Dividends paid
  
$
0.195
  
$
0.215
  
$
0.215
  
$
0.215
  
$
0.215
                
                                               
PER SHARE DATA FOR YTD
                                              
Operating income-diluted *
  
$
0.90
  
$
1.85
  
$
2.48
  
$
3.39
  
$
1.21
  
 
 $
0.90
  
$
1.21
  
RIGL - Derivatives net of gains related to corp debt, investments and annuities
    
0.11
   
0.06
   
(0.43
)
  
(0.20
)
  
(0.03
)
  
0.11
   
(0.03
)
RIGL - All Other Investments, net of participating income
    
0.00
   
0.04
   
0.70
   
0.75
   
0.09
     
0.00
   
0.09
 
Discontinued Operations
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
     
0.00
   
0.00
 
Net income-diluted
  
$
1.01
  
$
1.95
  
$
2.75
  
$
3.94
  
$
1.27
  
 
 $
1.01
  
$
1.27
  
Average shares outstanding-diluted
    
71,559,255
   
71,469,976
   
71,431,304
   
71,390,513
   
71,487,063
      
71,559,255
   
71,487,063
  
Dividends paid
  
$
0.195
  
$
0.410
  
$
0.625
  
$
0.840
  
$
0.215
  
 
$
0.195
  
$
0.215
  
 
* "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)
                      
   
1ST QTR 
  
2ND QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
  
   
2006
  
2006
  
2006
  
2006
  
2007
  
ASSETS
              
 
  
 
  
Fixed maturities
  
$
14,965,927
  
$
14,901,325
  
$
21,146,307
  
$
21,367,263
  
$
21,570,487
  
Equity securities
    
123,536
    
121,215
    
124,495
    
128,695
    
69,211
  
Mortgage loans
    
3,411,337
    
3,537,842
    
3,650,356
    
3,880,028
    
4,025,025
  
Investment real estate
    
63,858
    
57,059
    
52,263
    
38,918
    
38,828
  
Policy loans
    
456,147
    
454,225
    
835,817
    
839,502
    
822,930
  
Other long-term investments
    
269,345
    
290,427
    
290,304
    
310,255
    
167,571
  
Long-term investments
    
19,290,150
    
19,362,093
    
26,099,542
    
26,564,631
    
26,694,052
  
Short-term investments
    
833,567
    
734,021
    
1,377,210
    
1,381,073
    
1,064,768
  
Total investments
    
20,123,717
    
20,096,114
    
27,476,752
    
27,945,704
    
27,758,820
  
Cash
    
37,118
    
35,718
    
39,285
    
69,516
    
120,190
  
Accrued investment income
    
198,708
    
204,572
    
266,688
    
284,529
    
265,772
  
Accounts and premiums receivable
    
59,236
    
114,514
    
130,427
    
194,447
    
121,051
  
Reinsurance receivable
    
3,146,444
    
3,212,207
    
4,541,415
    
4,618,122
    
4,780,956
  
Deferred policy acquisition costs and value of businesses acquired
    
2,332,639
    
2,475,843
    
3,099,726
    
3,198,735
    
3,212,048
  
Goodwill
    
49,423
    
49,423
    
68,472
    
100,479
    
100,318
  
Property and equipment, net
    
45,941
    
44,897
    
44,569
    
43,796
    
42,245
  
Other assets
    
144,855
    
151,499
    
248,197
    
165,656
    
163,543
  
Income Tax Receivable
    
96,443
    
19,577
    
0
  
116,318
    
116,684
  
Assets Related to Separate Accounts
                      
   
 
Variable Annuity
    
2,447,968
    
2,391,285
    
2,604,488
    
2,750,129
    
2,790,233
  
Variable Universal Life
    
269,532
    
275,261
    
285,954
    
307,863
    
319,972
  
                       
   
 
TOTAL ASSETS
  
$
28,952,024
  
$
29,070,910
  
$
38,805,973
  
$
39,795,294
  
$
39,791,832
  
 
 
PROTECTIVE LIFE CORPORATION
                      
GAAP Consolidated Balance Sheets
                      
(Dollars in thousands)
                      
(Unaudited)
                      
 
  
 1ST QTR   
  
2ND QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
  
 
  
 2006    
  
2006
  
2006
  
2006
  
2007
  
 LIABILITIES AND SHARE-OWNERS' EQUITY                      
                                 
LIABILITIES
                        
Policy liabilities and accruals
                                
Future policy benefits and claims
  
$
11,447,516
  
$
11,681,465
  
$
14,761,428
  
$
15,120,996
  
$
15,285,420
  
Unearned premiums
    
767,074
   
814,739
   
906,542
   
938,934
   
1,020,401
 
Stable value product deposits
    
5,873,092
   
5,764,856
   
5,515,633
   
5,513,464
   
5,055,382
 
Annuity deposits
    
3,330,897
   
3,328,479
   
8,943,078
   
8,958,089
   
8,966,309
 
Other policyholders' funds
    
147,470
   
144,951
   
340,756
   
328,664
   
323,898
 
Securities sold under repurchase agreements
    
0
   
0
   
0
   
16,949
   
2,844
 
Other liabilities
    
881,146
   
923,900
   
1,110,058
   
1,310,145
   
1,227,373
  
Accrued income taxes
    
0
   
(2,004
)
  
99,428
   
0
   
0
 
Deferred income taxes
    
280,219
   
240,774
   
271,894
   
374,486
   
429,481
 
Non-recourse funding obligations
    
150,000
   
200,000
   
250,000
   
425,000
   
525,000
 
Debt
    
473,032
   
489,532
   
471,132
   
479,132
   
466,532
 
Liabilities related to variable interest entities
    
442,383
   
435,980
   
435,756
   
420,395
   
421,684
 
Subordinated debt securities
    
324,743
   
324,743
   
524,743
   
524,743
   
524,743
 
Minority interest - subsidiaries
    
12,682
   
13,238
   
13,194
   
13,230
   
13,243
 
Liabilities related to separate accounts
                                
Variable annuity
    
2,447,968
   
2,391,285
   
2,604,488
   
2,750,129
   
2,790,233
 
Variable universal life
    
269,532
   
275,261
   
285,954
   
307,863
   
319,972
 
Total Liabilities
    
26,847,754
   
27,027,199
   
36,534,084
   
37,482,219
   
37,372,515
  
                                 
SHARE-OWNERS' EQUITY
                                
Common stock
    
36,626
   
36,626
   
36,626
   
36,626
   
36,626
 
Additional paid-in capital
    
441,964
   
443,462
   
441,589
   
438,485
   
440,813
 
Treasury stock
    
(12,079
)
  
(11,968
)
  
(11,906
)
  
(11,796
)
  
(11,468
)
Cumulative Effect Adjustments - FAS 155 & FIN 48
    
0
   
0
   
0
   
0
   
2,146
 
Unallocated ESOP shares
    
(1,231
)
  
(1,231
)
  
(1,231
)
  
(1,231
)
  
(853
)
Retained earnings
    
1,674,232
   
1,726,146
   
1,768,416
   
1,838,560
   
1,914,099
 
Accumulated other comprehensive income
    
(35,242
)
  
(149,324
)
  
38,395
 
  
12,431
   
37,954
 
                                 
Total Share-owners' Equity
    
2,104,270
   
2,043,711
   
2,271,889
   
2,313,075
   
2,419,317
 
                                 
TOTAL LIABILITIES AND EQUITY
 
$
28,952,024
  
$
29,070,910
  
$
38,805,973
  
$
39,795,294
  
$
39,791,832
  
                                 
SHARE-OWNERS' EQUITY PER SHARE
                                
Total Share-owners' Equity
  
$
30.11
  
$
29.23
  
$
32.49
  
$
33.06
  
$
34.53
  
Accumulated other comprehensive income
    
(0.50
)
  
(2.14
)
   0.55
 
  
0.18
   
0.54
 
Excluding accumulated other comprehensive income *
 
$
30.61
  
$
31.37
  
$
31.94
  
$
32.88
  
$
33.99
  
                                 
Total Share-owners' Equity
  
$
2,104,270
  
$
2,043,711
  
$
2,271,889
  
$
2,313,075
  
$
2,419,317
  
Accumulated other comprehensive income
    
(35,242
)
  
(149,324
)
  
38,395
 
  
12,431
   
37,954
 
Share-owners' Equity (excluding accumulated other comprehensive income) *
  
$
2,139,512
  
$
2,193,035
  
$
2,233,494
  
$
2,300,644
  
$
2,381,363
  
                                 
Common shares outstanding
    
69,885,344
   
69,916,577
   
69,934,277
   
69,964,648
   
70,056,891
 
Treasury Stock shares
    
3,366,616
   
3,335,383
   
3,317,683
   
3,287,312
   
3,195,069
 
 
* "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)
                                              
 
     1ST QTR    
2ND QTR
    
3RD QTR
    
4TH QTR
    
1ST QTR
      
3 MOS
    
3 MOS
  
     
2006
    
2006
    
2006
    
2006
    
2007
      
2006
    
2007
  
                                               
CALCULATION OF NET INCOME PER SHARE
                                              
Net income
  
$
72,137
  
$
66,941
  
$
57,301
  
$
85,182
  
$
90,583
    
$
72,137
  
$
90,583
  
                                               
Average shares outstanding-basic
    
70,752,202
   
70,805,802
   
70,811,292
   
70,811,686
   
71,017,662
      
70,752,202
   
71,017,662
  
Average shares outstanding-diluted
    
71,559,255
   
71,381,677
   
71,355,221
   
71,269,472
   
71,487,063
      
71,559,255
   
71,487,063
  
                                               
Net income per share-basic
  
$
1.02
  
$
0.94
  
$
0.81
  
$
1.21
  
$
1.28
    
$
1.02
  
$
1.28
  
Net income per share-diluted
  
$
1.01
  
$
0.94
  
$
0.80
  
$
1.19
  
$
1.27
    
$
1.01
  
$
1.27
  
                                               
Income from continuing operations
  
$
72,137
  
$
66,941
  
$
57,301
  
$
85,182
  
$
90,583
    
$
72,137
  
$
90,583
  
EPS (basic)
  
$
1.02
  
$
0.94
  
$
0.81
  
$
1.21
  
$
1.28
    
$
1.02
  
$
1.28
  
EPS (diluted)
  
$
1.01
  
$
0.94
  
$
0.80
  
$
1.19
  
$
1.27
    
$
1.01
  
$
1.27
  
                                               
CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE
                                              
RIGL - Derivatives
  
$
13,337
  
$
(4,799
)
$
(55,302
)
$
25,248
  
$
(2,291
)
  
$
13,337
  
$
(2,291
)
Derivative Gains related to Corporate Debt and Investments
    
(1,331
)
  
(674
)
  
(654
)
  
(77
)
  
(257
)
    
(1,331
)
  
(257
)
Derivative Gains related to Annuities
    
651
   
(672
)
  
1,808
   
960
   
(254
)
    
651
   
(254
)
RIGL - All Other Investments, net of participating income
    
(173
)
  
6,495
   
78,645
   
5,623
   
10,144
     
(173
)
  
10,144
 
Related amortization of DAC & VOBA
    
0
   
(1,549
)
  
(6,379
)
  
(1,276
)
  
(1,196
)
    
0
   
(1,196
)
     
12,484
   
(1,199
)
  
18,118
   
30,478
   
6,146
     
12,484
   
6,146
 
Tax effect
   
(4,369
)
  
419
   
(6,341
)
  
(10,667
)
  
(2,151
)
    
(4,369
)
  
(2,151
)
   
$
8,115
  
$
(780
)
$
11,777
  
$
19,811
  
$
3,995
    
$
8,115
  
$
3,995
  
                                               
RIGL - Derivatives per share-diluted
 
$
0.11
  
$
(0.05
)
$
(0.49
)
$
0.23
  
$
(0.03
)
  
$
0.11
  
$
(0.03
)
RIGL - All Other Investments per share-diluted
 
$
-
  
$
0.04
  
$
0.66
  
$
0.05
  
$
0.09
    
$
-
  
$
0.09
  
                                               
OPERATING INCOME PER SHARE *
                                              
Net income per share-diluted
  
$
1.01
  
$
0.94
  
$
0.80
  
$
1.19
  
$
1.27
    
$
1.01
  
$
1.27
  
Discontinued operations
    
-
   
-
   
-
   
-
   
-
     
-
   
-
 
RIGL - Derivatives per share-diluted
    
0.11
   
(0.05
)
  
(0.49
)
  
0.23
   
(0.03
)
    
0.11
   
(0.03
)
RIGL - All Other Investments, net of participating income per share-diluted
    
0.00
   
0.04
   
0.66
   
0.05
   
0.09
     
0.00
   
0.09
 
Change in accounting principle
    
0.00
   
0.00
   
0.00
   
0.00
   
0.00
     
0.00
   
0.00
 
Operating income per share-diluted
  
$
0.90
  
$
0.95
  
$
0.63
  
$
0.91
  
$
1.21
    
$
0.90
  
$
1.21
  
                                               
NET OPERATING INCOME *
                                              
Net income
  
$
72,137
  
$
66,941
  
$
57,301
  
$
85,182
  
$
90,583
    
$
72,137
  
$
90,583
  
RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities
    
8,227
   
(3,994
)
  
(35,197
)
  
16,985
   
(1,822
)
    
8,227
   
(1,822
)
RIGL - All Other Investments net of tax, amortization, and participating income
    
(113
)
  
3,216
   
46,972
   
2,826
   
5,816
     
(113
)
  
5,816
 
Discontinued operations
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Change in accounting principle
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net operating income
  
$
64,023
  
$
67,719
  
$
45,526
  
$
65,371
  
$
86,589
    
$
64,023
  
$
86,589
  
                                               
PRETAX OPERATING INCOME **
                                              
Income before income tax and discontinued operations
  
$
110,657
  
$
102,686
  
$
87,898
  
$
130,667
  
$
133,328
    
$
110,657
  
$
133,328
  
RIGL - Derivatives
    
13,337
   
(4,799
)
  
(55,302
)
  
25,248
   
(2,291
)
    
13,337
   
(2,291
)
Derivative gains related to corporate debt, investments & annuities
    
(680
)
  
(1,346
)
  
1,153
   
883
   
(511
)
    
(680
)
  
(511
)
RIGL - All Other Investments, net of participating income
    
(173
)
  
6,495
   
78,645
   
5,623
   
10,144
     
(173
)
  
10,144
 
Related amortization of DAC & VOBA
    
0
   
(1,549
)
  
(6,379
)
  
(1,276
)
  
(1,196
)
    
0
   
(1,196
)
Pretax operating income
  
$
98,173
  
$
103,885
  
$
69,781
  
$
100,189
  
$
127,182
    
$
98,173
  
$
127,182
  
 
* "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)
            
   
1ST QTR
2ND QTR
3RD QTR
4TH QTR
1ST QTR
 
 
2006
2006
2006
2006
2007
Total Portfolio
            
Fixed Income
  
$14,965.9
$14,901.3
$21,146.3
$21,367.3
$21,570.5
Mortgage Loans
  
3,411.3
3,537.8
3,650.4
3,880.0
4,025.0
Real Estate
  
63.9
57.1
52.3
38.9
38.8
Equities
  
123.5
121.2
124.5
128.7
69.2
Policy Loans
  
456.1
454.2
835.8
839.5
822.9
Short Term Investments
  
833.6
734.0
1,377.2
1,381.1
1,064.8
Other Long Term Investments
  
269.3
290.4
290.3
310.2
167.6
Total Invested Assets
  
$20,123.7
$20,096.1
$27,476.8
$27,945.7
$27,758.8
             
Fixed Income
            
Corporate Bonds
  
$7,054.1
$6,571.3
$10,247.2
$10,223.1
$10,796.0
Mortgage Backed Securities
  
6,050.9
5,900.0
8,299.4
7,870.3
8,331.8
US Govt Bonds
  
199.7
908.4
654.4
1,373.8
529.4
Public Utilities
  
1,615.9
1,477.2
1,821.0
1,784.5
1,794.4
States, Municipals and Political Subdivisions
  
45.0
44.1
124.0
115.3
118.6
Preferred Securities
  
0.1
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
  
$14,965.9
$14,901.3
$21,146.3
$21,367.3
$21,570.5
             
Fixed Income - Quality
            
AAA
 
41.9%
46.0%
44.8%
46.2%
44.1%
AA
  
3.6%
3.4%
6.6%
6.8%
8.4%
A
  
16.7%
16.2%
18.5%
18.4%
19.1%
BBB
  
30.3%
29.6%
28.1%
27.0%
26.7%
BB or Less
  
7.5%
4.8%
2.0%
1.6%
1.7%
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
  
68.2%
68.1%
68.1%
68.3%
66.9%
Apartments
  
10.9%
10.6%
10.6%
10.0%
11.2%
Office Buildings
  
10.7%
11.2%
11.7%
11.9%
12.2%
Warehouses
  
8.0%
7.8%
7.2%
7.1%
7.0%
Miscellaneous
  
2.2%
2.3%
2.4%
2.7%
2.7%
   
100.0%
100.0%
100.0%
100.0%
100.0%
             
Problem Mortgage Loans
            
60 Days Past Due
  
$0.0
$0.0
$0.0
$0.0
$2.0
90 Days Past Due
  
5.4
3.1
6.6
0.0
0.0
Renegotiated Loans
  
5.6
0.2
0.2
0.1
0.1
Foreclosed Real Estate
  
1.6
5.1
5.1
15.7
0.0
   
$12.6
$8.3
$11.8
$15.8
$2.1
 
 
PROTECTIVE LIFE CORPORATION
                                          
 
  
Life Marketing and Acquisitions - Quarterly Earnings Trends
                                          
 
  
(Dollars in thousands)
                                            
(Unaudited)
                                              
 
     1ST QTR    
2ND QTR
    
3RD QTR
    
4TH QTR
    
1ST QTR
      
3 MOS
    
3 MOS
  
     
2006
    
2006
    
2006
    
2006
    
2007
      
2006
    
2007
  
LIFE MARKETING
                                              
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
325,364
  
$
325,496
  
$
327,355
  
$
349,650
  
$
345,685
    
$
325,364
  
$
345,685
  
Reinsurance Ceded
    
(208,631
)
  
(237,148
)
  
(206,269
)
  
(254,542
)
  
(207,614
)
    
(208,631
)
  
(207,614
)
Net Premiums and Policy Fees
    
116,733
   
88,348
   
121,086
   
95,108
   
138,071
     
116,733
   
138,071
 
Net investment income
    
72,853
   
75,474
   
80,444
   
79,726
   
81,103
     
72,853
   
81,103
 
Realized investment gains (losses)
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Other income
    
29,339
   
32,735
   
32,278
   
43,539
   
51,365
     
29,339
   
51,365
 
Total Revenues
    
218,925
   
196,557
   
233,808
   
218,373
   
270,539
     
218,925
   
270,539
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
135,899
   
122,432
   
147,213
   
130,396
   
149,329
     
135,899
   
149,329
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
19,466
   
1,636
   
21,689
   
17,436
   
28,698
     
19,466
   
28,698
 
Other operating expenses
    
22,779
   
21,264
   
24,636
   
28,628
   
27,232
     
22,779
   
27,232
 
Total Benefits and Expenses
    
178,144
   
145,332
   
193,538
   
176,460
   
205,259
     
178,144
   
205,259
 
                                               
INCOME BEFORE INCOME TAX
 
$
40,781
  
$
51,225
  
$
40,270
  
$
41,913
  
$
65,280
    
$
40,781
  
$
65,280
  
                                               
ACQUISITIONS
                                              
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
62,986
  
$
63,203
  
$
188,491
  
$
199,891
  
$
198,288
    
$
62,986
  
$
198,288
  
Reinsurance Ceded
    
(16,642
)
  
(16,617
)
  
(112,636
)
  
(110,416
)
  
(118,241
)
    
(16,642
)
  
(118,241
)
Net Premiums and Policy Fees
    
46,344
   
46,586
   
75,855
   
89,475
   
80,047
     
46,344
   
80,047
 
Net investment income
    
54,490
   
53,626
   
152,834
   
152,686
   
148,986
     
54,490
   
148,986
 
RIGL - Derivatives
    
0
   
0
   
(58,544
)
  
13,379
   
(3,703
)
    
0
   
(3,703
)
RIGL - All Other Investments
    
0
   
0
   
74,628
   
(747
)
  
7,933
     
0
   
7,933
 
Other income
    
617
   
293
   
4,774
   
354
   
4,719
     
617
   
4,719
 
Total Revenues
    
101,451
   
100,505
   
249,547
   
255,147
   
237,982
     
101,451
   
237,982
 
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
67,454
   
66,984
   
178,946
   
181,149
   
166,889
     
67,454
   
166,889
 
Amortization of deferred policy acquisition costs and value of businesses acquired
    
6,335
   
6,809
   
15,142
   
30,528
   
13,927
     
6,335
   
13,927
 
Other operating expenses
    
7,756
   
7,754
   
12,501
   
(1,182
)
  
21,293
     
7,756
   
21,293
 
Total Benefits and Expenses
    
81,545
   
81,547
   
206,589
   
210,495
   
202,109
     
81,545
   
202,109
 
                                               
INCOME BEFORE INCOME TAX
   
19,906
   
18,958
   
42,958
   
44,652
   
35,873
     
19,906
   
35,873
 
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL - Derivatives
    
0
   
0
   
(58,544
)
  
13,379
   
(3,703
)
    
0
   
(3,703
)
Less: RIGL - All Other Investments
    
0
   
0
   
74,628
   
(747
)
  
7,933
     
0
   
7,933
 
Add back: Related amortization of deferred policy acquisition costs
    
0
   
0
   
5,186
   
1,590
   
606
     
0
   
606
 
                                               
PRETAX OPERATING INCOME
  
$
19,906
  
$
18,958
  
$
32,060
  
$
33,610
  
$
32,249
    
$
19,906
  
$
32,249
  
 
 
PROTECTIVE LIFE CORPORATION
                                          
 
  
Life Marketing and Annuities Data
                                          
 
  
(Dollars in thousands)
                                          
 
  
(Unaudited)
                                              
     
2006
    
2006
    
2006
    
2006
    
2007
      
3 MOS
    
3 MOS
  
    1ST QTR    
2ND QTR
    
3RD QTR
    
4TH QTR
    
1ST QTR
      
2006
    
2007
  
LIFE MARKETING
                                              
                                               
SALES BY PRODUCT
                                              
Term
  
$
37,477
  
$
35,733
  
$
39,552
  
$
32,618
  
$
33,492
    
$
37,477
  
$
33,492
  
U/L
    
31,488
   
16,109
   
13,028
   
15,090
   
14,197
     
31,488
   
14,197
 
VUL
    
1,285
   
1,628
   
1,697
   
1,914
   
1,828
     
1,285
   
1,828
 
Total
  
$
70,250
  
$
53,470
  
$
54,277
  
$
49,622
  
$
49,517
    
$
70,250
  
$
49,517
  
                                               
SALES BY DISTRIBUTION
                                             
Brokerage general agents
  
$
38,180
  
$
32,644
  
$
33,733
  
$
29,438
  
$
29,879
    
$
38,180
  
$
29,879
  
Independent agents
    
13,800
   
9,216
   
7,814
   
9,932
   
8,328
     
13,800
   
8,328
 
Stockbrokers/banks
    
13,567
   
8,082
   
7,116
   
6,983
   
8,493
     
13,567
   
8,493
 
Direct Response & BOLI
    
4,703
   
3,528
   
5,614
   
3,269
   
2,817
     
4,703
   
2,817
 
Total
  
$
70,250
  
$
53,470
  
$
54,277
  
$
49,622
  
$
49,517
    
$
70,250
  
$
49,517
  
                                               
ANNUITIES
                                              
                                               
SALES
                                              
Variable Annuity
 
$
73,731
  
$
81,206
  
$
76,299
  
$
91,526
  
$
79,671
    
$
73,731
  
$
79,671
  
Immediate Annuity
   
45,045
   
49,113
   
59,292
   
73,057
   
55,201
     
45,045
   
55,201
 
Single Premium Deferred Annuity
    
0
   
0
   
151,172
   
124,688
   
75,838
     
-
   
75,838
 
Market Value Adjusted Annuity
   
28,373
   
58,464
   
112,511
   
99,166
   
105,195
     
28,373
   
105,195
 
Equity Indexed Annuity
    
18,672
   
29,002
   
16,975
   
12,648
   
7,628
     
18,672
   
7,628
 
Total
  
$
165,821
  
$
217,785
  
$
416,249
  
$
401,085
  
$
323,533
    
$
165,821
  
$
323,533
  
                                               
PRETAX OPERATING INCOME
                                              
Variable Annuity
 
$
5,280
  
$
5,425
  
$
3,484
  
$
5,701
  
$
4,673
    
$
5,280
  
$
4,673
  
Fixed Annuity
   
(539
)
  
725
   
1,867
   
2,702
   
933
     
(539
)
  
933
 
Total
  
$
4,741
  
$
6,150
  
$
5,351
  
$
8,403
  
$
5,606
    
$
4,741
  
$
5,606
  
                                               
DEPOSIT BALANCE
                                              
VA Fixed Annuity
 
$
223,265
  
$
218,951
  
$
209,135
  
$
206,237
  
$
194,479
                
VA Separate Account Annuity
   
2,382,736
   
2,331,932
   
2,424,837
   
2,559,452
   
2,594,554
               
Sub-total
    
2,606,001
   
2,550,883
   
2,633,972
   
2,765,689
   
2,789,033
               
Fixed Annuity
   
3,201,516
   
3,256,655
   
3,521,346
   
3,780,062
   
3,929,194
               
Total
  
$
5,807,517
  
$
5,807,538
  
$
6,155,318
  
$
6,545,751
  
$
6,718,227
                
 
PROTECTIVE LIFE CORPORATION
                              
Annuities, Stable Value Contracts, and Asset Protection
                              
Quarterly Earnings Trends (Dollars in thousands)
                              
(Unaudited)
  
 
  
 
  
 
  
 
  
 
    
 
  
 
  
   
1ST QTR 
  
2ND QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
    
3 MOS
  
3 MOS
  
   
2006
  
2006
  
2006
  
2006
  
2007
    
2006
  
2007
  
ANNUITIES
                                
REVENUES
                                
Gross Premiums and Policy Fees
  
$
8,144
  
$
8,000
  
$
7,794
  
$
8,136
  
$
8,262
    
$
8,144
  
$
8,262
  
Reinsurance Ceded
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Net Premiums and Policy Fees
    
8,144
    
8,000
    
7,794
    
8,136
    
8,262
      
8,144
    
8,262
  
Net investment income
    
53,494
    
54,865
    
56,475
    
60,326
    
60,861
      
53,494
    
60,861
  
RIGL - Derivatives
    
(651
 )   
672
 
  
(1,808
)
  
(960
 )   
254
 
    
(651
 )   
254
 
RIGL - All Other Investments
    
(90
 )  
1,598
   
3,412
 
  
(223
 )   
1,664
      
(90
 )   
1,664 
  
Other income
    
2,899
    
2,343 
    
2,469
    
2,725
    
2,713
      
2,899
    
2,713 
  
Total Revenues
    
63,796
    
67,478
    
68,342
    
70,004
    
73,754
      
63,796
    
73,754 
  
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
47,313
    
46,883
    
48,233 
    
48,809
    
55,949 
      
47,313 
    
55,949 
  
Amortization of deferred policy acquisition costs and value of businesses acquired
    
5,126
    
7,383
 
  
7,778 
    
7,585
    
5,128 
      
5,126
    
5,128 
  
Other operating expenses
    
6,706
    
7,013
    
4,761 
    
5,116
    
5,997 
      
6,706
    
5,997 
  
Total Benefits and Expenses
    
59,145
    
61,279
    
60,772 
    
61,510 
    
67,074 
      
59,145
    
67,074 
  
                                               
INCOME BEFORE INCOME TAX
   
4,651
    
6,199
    
7,570 
    
8,494 
    
6,680 
      
4,651
    
6,680 
  
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL - Derivatives
    
(651
 )   
672
 
  
(1,808
)
  
(960
 )   
254
 
    
(651
 )   
254
 
Add back: Derivative gains related to equity indexed annuities
    
(651
 )   
672
 
  
(1,808
)
  
(960
 )   
254
 
    
(651
 )   
254
 
Less: RIGL - All Other Investments
    
(90
 )  
1,598
    
3,412
 
  
(223
 )   
1,664
      
(90
 )   
1,664
  
Add back: Related amortization of deferred policy acquisition costs
    
0 
    
1,549
    
1,193
    
(314
 )   
590
      
0
    
590
  
                                               
PRETAX OPERATING INCOME
  
$
4,741
  
$
6,150
  
$
5,351
  
$
8,403
  
$
5,606
    
$
4,741
  
$
5,606
  
 
 
                                               
      1ST QTR     2ND QTR     3RD QTR     4TH QTR     1ST QTR       3 MOS     3 MOS  
      2006      2006      2006      2006      2007        2006      2007   
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
    
82,233
    
82,350
    
80,734
    
80,336
   
79,101
      
82,233
    
79,101
  
RIGL - Derivatives
    
312
    
98
 
  
(13
 )   
210
    
4,270
 
    
312
    
4,270
  
RIGL - All Other Investments
    
(5,166
 )   
612
 
  
4,534
 
  
574 
    
(2,845
 )     
(5,166
 )   
(2,845
)
Other income
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Total Revenues
    
77,379 
    
83,060
    
85,255
    
81,120 
    
80,526
      
77,379
    
80,526
  
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
67,463
   
68,415
    
68,154
    
65,819
   
64,719
      
67,463
    
64,719
  
Amortization of deferred policy acquisition costs and value of businesses acquired
    
1,229
    
1,136
    
1,064
    
1,009
    
1,168
      
1,229
    
1,168
  
Other operating expenses
    
1,197
    
999
    
1,087
    
1,008
    
1,028
     
1,197
    
1,028
  
Total Benefits and Expenses
    
69,889
    
70,550
    
70,305
    
67,836
    
66,915 
      
69,889
    
66,915
  
                                               
INCOME BEFORE INCOME TAX
    
7,490
    
12,510
 
  
14,950
    
13,284
    
13,611 
      
7,490
    
13,611
  
                                               
Adjustments to Reconcile to Operating Income:
                                              
Less: RIGL-Derivatives
    
312
    
98
 
  
(13
 )   
210
    
4,270
 
    
312
    
4,270
  
Less: RIGL-All Other Investments
    
(5,166
 )   
612
 
  
4,534
 
  
574
    
(2,845
 )     
(5,166
 )   
(2,845
)
                                               
PRETAX OPERATING INCOME
  
$
12,344
  
$
11,800
  
$
10,429
  
$
12,500
  
$
12,186
    
$
12,344
  
$
12,186
  
                                               
ASSET PROTECTION
                                              
REVENUES
                                              
Gross Premiums and Policy Fees
  
$
100,690
  
$
100,203
  
$
104,564
  
$
99,067
  
$
99,420
    
$
100,690
  
$
99,420
  
Reinsurance Ceded
    
(55,393
)
  
(53,997
)
  
(52,775
)
  
(46,126
)
  
(45.138
)
    
(55,393
)
  
(45,138
)
Net Premiums and Policy Fees
    
45,297
    
46,206
    
51,789
    
52,941
    
54,282
      
45,297 
    
54,282
  
Net investment income
    
7,808
    
8,076
    
8,649
    
8,812
    
9,212
      
7,808 
    
9,212
  
Realized investment gains (losses)
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
Other income
    
12,044
    
16,021
    
20,597
    
18,087
    
16,529
      
12,044
    
16,529
  
Total Revenues
    
65,149
    
70,303
    
81,035
    
79,840
    
80,023
      
65,149
    
80,023
  
                                               
BENEFITS & EXPENSES
                                              
Benefits and settlement expenses
    
22,209
    
22,870
    
26,137
    
27,202
    
25,815
      
22,209
    
25,815
  
Amortization of deferred policy acquisition costs and value of businesses acquired
    
16,920
    
16,321
    
20,713
    
17,111
    
20,703
      
16, 920
    
20,703
  
Other operating expenses
    
17,282
    
22,208
    
48,586
    
28,957
    
23,421
      
17,282
    
23,421
  
Total Benefits and Expenses
    
56,411
    
61,399
    
95,436
    
73,270
    
69,939
      
56,411
    
69,939
  
                                               
INCOME BEFORE INCOME TAX
 
$
8,738
  
$
8,904
  
$
(14,401
 ) 
$
6,570
  
$
10,084
 
  
$
8,738
  
$
10,084
  
 
 
PROTECTIVE LIFE CORPORATION
                            
 
  
Stable Value Contracts and Asset Protection Data
                    
 
  
(Dollars in thousands)
                            
 
  
(Unaudited)
                                
   
2006
  
2006
  
2006
  
2006
  
2007
    
3 MOS
  
3 MOS
  
   
1ST QTR
  
2ND  QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
    
2006
  
2007
  
STABLE VALUE CONTRACTS
              
 
  
 
            
               
 
  
 
            
SALES
              
 
  
 
            
GIC
  
$
46,200
  
$
111,400
  
$
107,500
  
$
29,000
  
$
2,500
    
$
46,200
  
$
2,500
  
GFA - Direct Institutional
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
GFA - Non-Registered
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
GFA - Registered - Institutional
    
0
   
0
   
0
   
0
   
0
     
0
   
0
 
GFA - Registered - Retail
    
40,841
    
13,078
    
54,743
    
31,164
    
13,120
      
40,841
    
13,120
  
Total
 
$
87,041
  
$
124,478
  
$
162,243
  
$
60,164
  
$
15,620
    
$
87,041
  
$
15,620
  
                                           
DEPOSIT BALANCE
                                            
Quarter End Balance
 
$
5,873,092
  
$
5,764,856
  
$
5,515,633
  
$
5,513,464
  
$
5,055,382
    
$
5,873,092
  
$
5,055,382
  
Average Daily Balance
 
$
5,976,606
  
$
5,853,111
  
$
5,662,236
  
$
5,520,061
  
$
5,461,832
    
$
5,976,606
  
$
5,461,832
  
                                           
OPERATING SPREAD
    
0.84
%
  
0.82
%
  
0.75
%
  
0.93
%
  
0.92
%
    
0.84
%
  
0.92
%
                                           
                                 
   
 2006
  
 2006
  
 2006
  
 2006
  
 2007
    
 3 MOS
  
 3 MOS
  
 
1ST QTR
  
2ND QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
    
2006
  
2007
  
ASSET PROTECTION
                                          
                                           
SALES
                                         
Credit
  
$
31,847
  
$
39,952
  
$
41,488
  
$
27,482
  
$
28,082
    
$
31,847
  
$
28,082
  
Service Contracts
    
53,717
    
 73,347
    
79,183
    
73,534
    
72,937
      
53,717
    
72,937
  
Other
    
16,921
    
22,900
    
35,792
    
39,456
    
38,030
      
16,921
    
38,030
  
Total
  
$
102,485
  
$
136,199
  
$
156,463
  
$
140,472
  
$
139,049
    
$
102,485
  
$
139,049
  
 
 
PROTECTIVE LIFE CORPORATION
                              
Corporate & Other Segment - Quarterly Earnings Trends
                            
 
  
(Dollars in thousands)
                            
 
  
(Unaudited)
  
 
                    
 
  
 
  
   
1ST QTR
  
2ND QTR
  
3RD QTR
  
4TH QTR
  
1ST QTR
    
3 MOS
  
3 MOS
  
   
2006
  
2006
  
2006
  
2006
  
2007
    
2006
  
2007
  
               
 
  
 
            
REVENUES
              
 
  
 
            
Gross Premiums and Policy Fees
  
$
10,510
  
$
9,309
  
$
9,253
  
$
9,231
  
$
9,169
    
$
10,510
  
$
9,169
  
Reinsurance Ceded
    
(4
)
  
(7
)
  
(8
)
  
(4
)
  
(4
)
    
(4
)
  
(4
)
Net Premiums and Policy Fees
    
10,506
    
9,302
    
9,245
    
9,227
    
9,165
      
10,506 
    
9,165
  
Net investment income
    
28,187
    
26,343
    
31,610
    
27,347
    
36,419
      
28,187 
    
36,419
  
RIGL - Derivatives
    
13,676
    
(5,569
)
  
5,063
    
12,619
 
  
(3,112
 )     
13,676
 
  
(3,112
 ) 
RIGL - All Other Investments
    
10,409
    
12,453
    
(3,929
 )   
6,019
    
6,542
 
    
10,409
    
6,542
  
Other income
    
3,637
    
2,207
    
2,237
    
1,470
    
937
      
3,637
    
937
  
Total Revenues
    
66,415
    
44,736
    
44,226
    
56,682
    
49,951
      
66,415
    
49,951
  
                                           
BENEFITS & EXPENSES
                                          
Benefits and settlement expenses
    
9,270
    
8,353
    
20,265
    
9,347
    
10,069
      
9,270
    
10,069
  
Amortization of deferred policy acquisition costs and value of businesses acquired
    
955
    
868
    
813
    
752
    
129
      
955
    
129
  
Other operating expenses
    
27,099
    
30,625
    
26,597
    
30,829
    
37,953
      
27,099
    
37,953
  
Total Benefits and Expenses
    
37,324
    
39,846
    
47,675
    
40,928
    
48,151
      
37,324
    
48,151
  
                                               
INCOME BEFORE INCOME TAX
   
29,091
    
4,890
    
(3,449
 )   
15,754
    
1,800
 
    
29,091
    
1,800
  
                                           
Adjustments to Reconcile to Operating Income:
                                          
Less: RIGL-Derivatives
    
13,676
    
(5,569
)
  
5,063
    
12,619
 
  
(3,112
 )     
13,676
 
  
(3,112
 ) 
Less: RIGL-All Other Investments, net of participating income
    
5,083
    
4,285
    
(3,929
 )   
6,019
    
3,392
 
    
5,083
    
3,392 
  
Add back: Derivative gains related to corporate debt and investments
    
1,331
    
674
    
654
    
77
    
257
      
1,331
    
257 
  
                                           
PRETAX OPERATING INCOME
  
$
11,663
  
$
6,848
  
$
(3,929
 ) 
$
(2,807
 ) 
$
1,777
 
  
$
11,663
  
$
1,777