plc_8k.htm

0000355429-07-000309.txt : 20070803 0000355429-07-000309.hdr.sgml : 20070803 20070802200649 ACCESSION NUMBER: 0000355429-07-000309 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070802 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070803 DATE AS OF CHANGE: 20070802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROTECTIVE LIFE CORP CENTRAL INDEX KEY: 0000355429 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 952492236 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11339 FILM NUMBER: 071021974 BUSINESS ADDRESS: STREET 1: 2801 HGWY 280 S CITY: BIRMINGHAM STATE: AL ZIP: 35223 BUSINESS PHONE: 2052683596 MAIL ADDRESS: STREET 1: PO BOX 2606 CITY: BIRMINGHAM STATE: AL ZIP: 35202 8-K 1 plc_8k.htm PLC FORM 8-K 8-2-2007 plc_8k.htm

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

August 2, 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 August 2, 2007, Registrant issued a press release and made available supplemental financial information with respect to its financial results for the quarter ended June 30, 2007. 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 August 2, 2007

99.2 - Supplemental Financial Information Dated August 2, 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: August 2, 2007

EX-99.1 2 exhibit99_1.htm PRESS RELEASE exhibit99_1.htm

Protective Life Corporation Exhibit 99.1

Post Office Box 2606

Birmingham, AL 35202

Phone 205-268-1000

FOR IMMEDIATE RELEASE

PROTECTIVE ANNOUNCES SECOND QUARTER 2007 EARNINGS

BIRMINGHAM, Alabama (August 2, 2007) Protective Life Corporation (NYSE: PL) today reported results for the second quarter of 2007. Highlights include:

Net income for the second quarter was $0.91 per diluted share, compared to $0.94 per share in the second quarter of 2006. Included in the current quarter’s net income were net realized investment gains of $0.03 per share, compared to net realized investment losses of $0.01 per share in the second quarter of 2006.

Operating income for the second quarter was $0.88 per diluted share, compared to $0.95 per share in the second quarter of 2006. 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.

Operating earnings in the second quarter were negatively impacted by approximately $0.02 per share of unfavorable mortality in the Life Marketing segment and approximately $0.03 per share of non-recurring expenses relating to the integration of Chase Insurance Group. Participating mortgage income was approximately $0.02 per share lower in the second quarter of 2007 than in the second quarter of 2006. With the exception of Life Marketing, pretax operating income in this quarter was higher than in the second quarter of 2006 in every operating segment. Life Marketing pretax operating income, adjusted for the effect in the second quarter of 2006 of an unlocking of deferred acquisition costs (“DAC”), was also higher in the quarter.

John D. Johns, Protective’s Chairman, President and Chief Executive Officer stated, “The Company made solid progress on many fronts during the quarter. Operating earnings, adjusted for mortality and some one-time expenses, were in line with our expectations for the quarter. Positive developments in the quarter included: an encouraging rebound in our life insurance sales; very strong annuity sales; substantial progress on the integration of the Chase Insurance Group acquisition; widening spreads in our Stable Value segment; a solid earnings contribution from the Asset Protection segment; and the completion of our AXXX securitization. While participating mortgage income, prepayment fees and other investment income items were down in the quarter, the quality of our investment portfolio is very high and we see opportunities to widen spreads and grow investment income as a result of the recent volatility in the fixed income markets. As we look to the remainder of 2007, we are encouraged by our progress in expanding life insurance and annuity distribution; the solid earnings contributions from our Acquisitions and Asset Protection segments; and the opportunities that our growing capital base will give us to restart growth in the Stable Value segment, pursue new acquisitions and take advantage of widening spreads in the fixed income markets.”

FINANCIAL HIGHLIGHTS

Life Marketing pretax operating income was $37.8 million, a decrease of 26.1% compared to the same period last year. The second quarter of 2006 included $14.1 million of positive unlocking of DAC related to universal life products. Life Insurance sales were $64.7 million as compared to $53.5 million in the second quarter of 2006.

Pretax operating income in the Acquisitions segment was $30.8 million in the current quarter, including $13.2 million from the Chase Insurance Group acquisition, closed in July 2006, an increase of 62.5% compared to $19.0 million in the same period last year. During the quarter, the Company also completed significant conversions related to the integration of the Chase Insurance Group.

The Annuities segment reported pretax operating income of $6.7 million compared to $6.2 million in the second quarter of 2006. The segment produced record sales during the quarter of $428.8 million, up 96.9 % as compared to the second quarter of 2006. In addition, all annuity product lines produced net positive cash flows for the current quarter and year to date 2007. The Company has also launched a new living benefit guaranteed minimum withdrawal benefit rider in its variable annuity product during May 2007.

Pretax operating income in the Stable Value Products segment was $12.4 million in the current quarter compared to $11.8 million in the same period last year. Operating spreads increased in the segment by 22 basis points to 104 basis points as compared to the second quarter of 2006. Also during the quarter, the company re-entered the institutional funding agreement market.

The Asset Protection segment reported pretax operating income of $11.5 million, an increase of 29.4% over the same period last year. The segment generated strong operating earnings for the current quarter at $11.5 million, due to additional earnings provided by the Western General acquisition and record earnings in its Service Contracts line of business.

·	As of June 30, 2007, the Company’s assets were $40.3 billion, compared to $29.1 billion at June 30, 2006, an increase of 38.5%.

·	As of June 30, 2007, share-owners’ equity per share, excluding accumulated other comprehensive income, was $34.68 compared with $31.37 a year ago. Share-owners’ equity per share, including accumulated other comprehensive income, was $32.70 compared with $29.23 a year ago.

·	Operating income return on average equity for the twelve months ended June 30, 2007 was 11.3%.

·	Net income return on average equity for the twelve months ended June 30, 2007 was 12.9%.

·	At June 30, 2007, below investment grade securities were 2.0% percent of invested assets, and problem mortgage loans and foreclosed properties remained less than one percent of the commercial mortgage loan portfolio.

·	As of June 30, 2007, the Company had $124.2 million in securities that are supported by collateral classified as sub-prime, of which, approximately 98% are AAA rated.

·	In early July 2007, the Company completed its securitization to fund statutory reserves required by Actuarial Guideline 38 (commonly known as “AXXX”) for certain Universal Life products sold by the Company.

2007 GUIDANCE

Based on current information, Protective is reaffirming its previous guidance and expects 2007 operating income per diluted share to be between $3.90 and $4.10. 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 actual year to date performance and many assumptions relating to the remaining half of the year, 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 expected to emerge more gradually 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 (including our view and expectations of credit spreads, the yield curve, and the volume of prepayments and income from our participating mortgage loan portfolio). The 2007 guidance range also assumes no further positive or negative unlocking of 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.

SECOND QUARTER CONSOLIDATED RESULTS

($ in thousands; net of income tax)

	2Q2007		2Q2006

Operating income	$	62,799	$	67,719
Realized investment gains (losses) and
related amortization, net of certain
derivative gains (losses)		2,306		(778	)
Net Income	$	65,105	$	66,941

($ per share; net of income tax)

	2Q2007			2Q2006

Operating income	$	0.88		$	0.95
Realized investment gains (losses) and
related amortization
Investments		(0.65	)		0.04
Derivatives		0.68			(0.05	)
Net Income	$	0.91		$	0.94

BUSINESS SEGMENT OPERATING INCOME BEFORE INCOME TAX

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

OPERATING INCOME BEFORE INCOME TAX

($ in thousands)

	2Q2007			2Q2006

LIFE MARKETING	$	37,834		$	51,225
ACQUISITIONS		30,814			18,958
ANNUITIES		6,669			6,150
STABLE VALUE PRODUCTS		12,355			11,800
ASSET PROTECTION		11,522			8,904
CORPORATE AND OTHER		(1,300	)		6,848
	$	97,894		$	103,885

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

($ in thousands)	2Q2007			2Q2006

Operating income before
income tax	$	97,894		$	103,885
Realized investment gains (losses)
Stable Value Contracts		(583	)		710
Annuities		53			1,598
Acquisitions		2,566			---
Corporate and Other		2,578			(1,284	)
Less: periodic settlements on derivatives
Corporate and Other		237			674
Related amortization of deferred policy
acquisition costs and value of businesses acquired
Acquisitions		777			---
Annuities		53			1,549
Income before income tax	$	101,441		$	102,686

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 $32.6 million for the second quarter of 2007 and $19.0 million for the second quarter of 2006. Income before income tax for the Annuities segment was $6.7 million for the second quarter of 2007 and $6.2 million for the second quarter of 2006. Income before income tax for the Stable Value segment was $11.8 million for the second quarter of 2007 and $12.5 million for the second quarter of 2006. Income before income tax for the Corporate and Other segment was $1.0 million for the second quarter of 2007 and $4.9 million for the second quarter of 2006.

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)	2Q2007		2Q2006

LIFE MARKETING	$	64.7	$	53.5
ANNUITIES		428.8		217.8
STABLE VALUE PRODUCTS		135.0		124.5
ASSET PROTECTION		153.9		136.2

BUSINESS SEGMENT HIGHLIGHTS

LIFE MARKETING: Pretax operating income for the Life Marketing segment was $37.8 million in the quarter, a decrease of 26.1% as compared to the prior year’s quarter. The second quarter of 2006 included positive unlocking of deferred policy acquisition costs (“DAC”) related to universal life products, the effect of which increased earnings approximately $14.1 million in the second quarter of 2006. In addition, unfavorable mortality reduced earnings for the current quarter by $1.6 million.

Life insurance sales were $64.7 million for the quarter compared to $53.5 million in the second quarter of 2006. Term insurance sales in the current quarter were $44.0 million compared to $35.8 million in the prior year’s quarter. Universal and variable universal life insurance sales in the second quarter of 2007 were $20.7 million compared to $17.7 million in the second quarter of 2006.

ACQUISITIONS: Pretax operating income was $30.8 million for the second quarter of 2007 compared to $19.0 million in the second quarter of 2006. The increase for the quarter is attributable to the acquisition of the Chase Insurance Group block of business in the second half of 2006. The division’s earnings were affected by higher non-recurring expenses of $3.0 million related to Chase Insurance Group integration costs as compared to first quarter 2007.

ANNUITIES: Pretax operating income in the Annuities segment was $6.7 million in the second quarter of 2007 as compared to $6.2 million in the second quarter of 2006. Average annuity account balances were $7.0 billion for the quarter ended June 30, 2007, an increase of 19.5% over the same period last year.

Total annuity sales increased 96.9% to $428.8 million in the second quarter of 2007 as compared to the prior year’s quarter. Variable annuity sales were $123.3 million in the second quarter of 2007 compared to $81.2 million in the second quarter of 2006. Fixed annuity sales increased 123.7% to $305.6 million in the second quarter of 2007 as compared to the same period last year.

STABLE VALUE PRODUCTS: Pretax operating income in the Stable Value Products segment was $12.4 million in the second quarter of 2007 compared to $11.8 million in the second quarter of 2006. Decreases in operating earnings resulting from declines in average account values were more than offset by a 22 basis point increase in spreads to 104 basis points as compared to 82 basis points in the second quarter of 2006.

ASSET PROTECTION: The Asset Protection segment had pretax operating income of $11.5 million for the second quarter of 2007 compared to $8.9 million in the prior year’s quarter. The increase in earnings was primarily attributable to improvement in service contract lines.

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 pretax operating loss of $1.3 million in the second quarter of 2007 compared to pretax operating income of $6.8 million in the second quarter of 2006. The decrease in pretax operating income is attributable to an increase in interest expense, lower participating mortgage income and higher corporate overhead, offset by higher investment income. The increase in interest expense for the quarter as compared to the same period in the prior year is primarily due 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 to support the Company’s Regulation XXX transactions.

CONFERENCE CALL

There will be a conference call for management to discuss the quarterly results with analysts and professional investors on August 3, 2007 at 9:00 a.m. Eastern. Analysts and professional investors may access this call by calling 1-800-896-8445 (international callers 1-785-830-1916 and giving the conference ID: Protective. A recording of the call will be available from 12:00 p.m. Eastern August 3, 2007 until midnight August 10, 2007. The recording may be accessed by calling 1-800-934-3033 (international callers 1-402-220-1144).

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 August 3, 2007 until midnight August 10, 2007.

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 June 30, 2007)

Total share-owners’ equity per share	$	32.70
Less: Accumulated other comprehensive income per share		(1.98	)

Total share-owners’ equity per share
excluding accumulated other comprehensive income	$	34.68

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 June 30, 2007 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 June 30, 2007, 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

ROLLING TWELVE MONTHS ENDED JUNE 30, 2007

($ in thousands)

Numerator:

	Three Months Ended
	Sept. 30, 2006			Dec. 31, 2006			March 31, 2007			June 30, 2007			Rolling Twelve Months Ended June 30, 2007

Net income	$	57,301		$	85,182		$	90,583		$	65,105		$	298,171
Net of:
Realized investment gains
(losses), net of income tax
Investments		51,119			3,655			6,592			(45,705	)		15,661
Derivatives		(34,772	)		17,035			(1,654	)		48,705			29,314
Related amortization of
deferred policy
acquisition costs,
net of income tax benefit		(4,147	)		(829	)		(777	)		(540	)		(6,293	)
Add back:
Derivative gains related
to Corp. debt and investments
net of income tax		425			50			167			154			796
Operating Income	$	45,526		$	65,371		$	86,589		$	62,799		$	260,285

Denominator:

	Share-Owners’ Equity		Accumulated Other Comprehensive Income			Share-Owners’ Equity Excluding Accumulated Other Comprehensive Income

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		2,313,075		12,431			2,300,644
March 31, 2007		2,419,317		37,954			2,381,363
June 30, 2007		2,293,542		(139,132	)		2,432,674
Total						$	11,541,210
Average						$	2,308,242
Operating Income Return on Average Equity							11.3	%

CALCULATION OF NET INCOME RETURN ON AVERAGE EQUITY

ROLLING TWELVE MONTHS ENDED JUNE 30, 2007

($ in thousands)

Numerator:

Net income – three months ended September 30, 2006	$	57,301
Net income – three months ended December 31, 2006		85,182
Net income – three months ended March 31, 2007		90,583
Net income – three months ended June 30, 2007		65,105
Net income – rolling twelve months ended June 30, 2007	$	298,171

Denominator:	Share-Owners’ Equity		Accumulated Other Comprehensive Income			Share-Owners’ Equity Excluding Accumulated Other Comprehensive Income

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		2,313,075		12,431			2,300,644
March 31, 2007		2,419,317		37,954			2,381,363
June 30, 2007		2,293,542		(139,132	)		2,432,674
Total						$	11,541,210
Average						$	2,308,242
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’s ability to compete; the Company’s policy claims fluctuate from period to period resulting in earnings volatility, 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 or reduce the demand for certain 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. The Company’s risk management policies and procedures may leave it exposed to unidentified or unanticipated risk, which could negatively affect our business or result in losses. 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:

Rich Bielen

Vice Chairman and Chief Financial Officer

(205) 268-3617

Rob Shirley

Vice President, Investor Relations

(205) 268-6259

EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL FINANCIAL INFORMATION exhibit99_2.htm

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 June 30, 2007. This document is dated August 2, 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)

	2ND QTR		3RD QTR			4TH QTR			1ST QTR		2ND QTR			6 MOS		6 MOS
	2006		2006			2006			2007		2007			2006		2007
Pretax Operating Income *


Life Marketing	$	51,225	$	40,270		$	41,913		$	65,280	$	37,834		$	92,006	$	103,114
Acquisitions		18,958		32,060			33,610			32,249		30,814			38,864		63,063
Annuities		6,150		5,351			8,403			5,606		6,669			10,891		12,275
Stable Value Contracts		11,800		10,429			12,500			12,186		12,355			24,144		24,541
Asset Protection		8,904		(14,401	)		6,570			10,084		11,522			17,642		21,606
Corporate & Other		6,848		(3,928	)		(2,807	)		1,777		(1,300	)		18,511		477
Total Pretax Operating Income	$	103,885	$	69,781		$	100,189		$	127,182	$	97,894		$	202,058	$	225,076


Balance Sheet Data

Total GAAP Assets	$	29,070,910	$	38,805,973		$	39,795,294		$	39,791,832	$	40,275,879
Share Owners' Equity	$	2,043,711	$	2,271,889		$	2,313,075		$	2,419,317	$	2,293,542
Share Owners' Equity (excluding accumulated	$	2,193,035	$	2,233,494		$	2,300,644		$	2,381,363	$	2,432,674
other comprehensive income) **


Stock Data

Closing Price	$	46.62	$	45.75		$	47.50		$	44.04	$	47.81		$	46.62	$	47.81
Average Shares Outstanding
Basic		70,805,802		70,811,292			70,811,686			71,017,662		71,074,976			70,779,151		71,046,489
Diluted		71,381,677		71,355,221			71,269,472			71,487,063		71,490,467			71,469,976		71,488,786


* "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)

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS			6 MOS
	2006			2006			2006			2007			2007			2006			2007
REVENUES
Gross Premiums and Policy Fees	$	506,211		$	637,457		$	665,975		$	657,017		$	691,165		$	1,013,905		$	1,348,182
Reinsurance Ceded		(307,769	)		(371,688	)		(411,088	)		(370,997	)		(422,766	)		(588,439	)		(793,763	)
Net Premiums and Policy Fees		198,442			265,769			254,887			286,020			268,399			425,466			554,419
Net investment income		300,734			410,746			409,233			415,682			410,436			599,799			826,118
RIGL - Derivatives		(4,799	)		(55,302	)		25,248			(2,291	)		76,281			8,538			73,990
RIGL - All Other Investments		14,663			78,645			5,623			13,294			(66,609	)		19,816			(53,315	)
Other income		53,599			62,355			66,175			73,792			57,452			102,135			131,244
Total Revenues		562,639			762,213			761,166			786,497			745,959			1,155,754			1,532,456

BENEFITS & EXPENSES
Benefits and settlement expenses		335,937			488,948			462,722			467,785			458,949			685,545			926,734
Amortization of deferred policy acquisition costs and value of businesses acquired		34,153			67,199			74,421			76,380			78,036			84,184			154,416
Other operating expenses		74,807			97,711			71,720			85,138			80,130			141,995			165,268
Interest on indebtedness - subsidiaries		3,926			5,898			6,489			8,728			12,441			8,246			21,169
Interest on indebtedness - holding company - other debt		5,383			5,198			5,746			5,737			5,561			10,948			11,298
Interest on indebtedness - holding company - hybrid securities		5,747			9,361			9,402			9,401			9,401			11,493			18,802
Total Benefits and Expenses		459,953			674,315			630,499			653,169			644,518			942,411			1,297,687

INCOME BEFORE INCOME TAX		102,686			87,898			130,667			133,328			101,441			213,343			234,769
Income tax expense		35,745			30,597			45,485			42,745			36,336			74,265			79,081
Discontinued Operations		0			0			0			0			0			0			0
NET INCOME	$	66,941		$	57,301		$	85,182		$	90,583		$	65,105		$	139,078		$	155,688

PER SHARE DATA FOR QUARTER
Operating income-diluted *	$	0.95		$	0.63		$	0.91		$	1.21		$	0.88
RIGL - Derivatives net of gains related to corp debt, investments and annuities		(0.05	)		(0.49	)		0.23			(0.03	)		0.68
RIGL - All Other Investments, net of participating income		0.04			0.66			0.05			0.09			(0.65	)
Discontinued Operations		0.00			0.00			0.00			0.00			0.00
Net income-diluted	$	0.94		$	0.80		$	1.19		$	1.27		$	0.91
Average shares outstanding-diluted		71,381,677			71,355,221			71,269,472			71,487,063			71,490,467
Dividends paid	$	0.215		$	0.215		$	0.215		$	0.215		$	0.225
PER SHARE DATA FOR YTD
Operating income-diluted *	$	1.85		$	2.48		$	3.39		$	1.21		$	2.09		$	1.85		$	2.09
RIGL - Derivatives net of gains related to corp debt, investments and annuities		0.06			(0.43	)		(0.20	)		(0.03	)		0.65			0.06			0.65
RIGL - All Other Investments, net of participating income		0.04			0.70			0.75			0.09			(0.56	)		0.04			(0.56	)
Discontinued Operations		0.00			0.00			0.00			0.00			0.00			0.00			0.00
Net income-diluted	$	1.95		$	2.75		$	3.94		$	1.27		$	2.18		$	1.95		$	2.18
Average shares outstanding-diluted		71,469,976			71,431,304			71,390,513			71,487,063			71,488,786			71,469,976			71,488,786
Dividends paid	$	0.410		$	0.625		$	0.840		$	0.215		$	0.440		$	0.410		$	0.440



* "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)

	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR
	2006		2006		2006		2007		2007
ASSETS
Fixed maturities	$	14,901,325	$	21,146,307	$	21,367,263	$	21,570,487	$	21,459,631
Equity securities		121,215		124,495		128,695		69,211		68,540
Mortgage loans		3,537,842		3,650,356		3,880,028		4,025,025		4,119,350
Investment real estate		57,059		52,263		38,918		38,828		12,067
Policy loans		454,225		835,817		839,502		822,930		819,387
Other long-term investments		290,427		290,304		310,225		167,571		185,958
Long-term investments		19,362,093		26,099,542		26,564,631		26,694,052		26,664,933
Short-term investments		734,021		1,377,210		1,381,073		1,064,768		809,957
Total investments		20,096,114		27,476,752		27,945,704		27,758,820		27,474,890
Cash		35,718		39,285		69,516		120,190		361,129
Accrued investment income		204,572		266,688		284,529		265,772		284,181
Accounts and premiums receivable		114,514		130,427		194,447		121,051		206,857
Reinsurance receivable		3,212,207		4,541,415		4,618,122		4,780,956		4,881,638
Deferred policy acquisition costs and value of businesses acquired		2,475,843		3,099,726		3,198,735		3,212,048		3,391,650
Goodwill		49,423		68,472		100,479		100,318		100,318
Property and equipment, net		44,897		44,569		43,796		42,245		43,328
Other assets		151,499		248,197		165,656		163,543		155,102
Income Tax Receivable		19,577		0		116,318		116,684		103,097
Assets Related to Separate Accounts
Variable Annuity		2,391,285		2,604,488		2,750,129		2,790,233		2,929,160
Variable Universal Life		275,261		285,954		307,863		319,972		344,529

TOTAL ASSETS	$	29,070,910	$	38,805,973	$	39,795,294	$	39,791,832	$	40,275,879

PROTECTIVE LIFE CORPORATION
GAAP Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)


LIABILITIES AND SHARE-OWNERS' EQUITY

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR
LIABILITIES	2006			2006			2006			2007			2007
Policy liabilities and accruals
Future policy benefits and claims	$	11,681,465		$	14,761,428		$	15,120,996		$	15,285,420		$	15,644,544
Unearned premiums		814,739			906,542			938,934			1,020,401			1,093,468
Stable value product deposits		5,764,856			5,515,633			5,513,464			5,055,382			4,806,721
Annuity deposits		3,328,479			8,943,078			8,958,089			8,966,309			8,786,272
Other policyholders' funds		144,951			340,756			328,664			323,898			372,299
Securities sold under repurchase agreements		0			0			16,949			2,844			312,000
Other liabilities		923,900			1,110,058			1,310,145			1,227,373			1,345,474
Accrued income taxes		(2,004	)		99,428			0			0			0
Deferred income taxes		240,774			271,894			374,486			429,481			363,153
Non-recourse funding obligations		200,000			250,000			425,000			525,000			600,000
Debt		489,532			471,132			479,132			466,532			444,852
Liabilities related to variable interest entities		435,980			435,756			420,395			421,684			400,000
Subordinated debt securities		324,743			524,743			524,743			524,743			524,743
Minority interest - subsidiaries		13,238			13,194			13,230			13,243			15,122
Liabilities related to separate accounts
Variable annuity		2,391,285			2,604,488			2,750,129			2,790,233			2,929,160
Variable universal life		275,261			285,954			307,863			319,972			344,529
TOTAL LIABILITIES		27,027,199			36,534,084			37,482,219			37,372,515			37,982,337


SHARE-OWNERS' EQUITY
Common stock		36,626			36,626			36,626			36,626			36,626
Additional paid-in capital		443,462			441,589			438,485			440,813			442,504
Treasury stock		(11,968	)		(11,906	)		(11,796	)		(11,468	)		(11,181	)
Cumulative Effect Adjustments - FAS 155 & FIN 48		0			0			0			2,146			2,146
Unallocated ESOP shares		(1,231	)		(1,231	)		(1,231	)		(853	)		(852	)
Retained earnings		1,726,146			1,768,416			1,838,560			1,914,099			1,963,431
Accumulated other comprehensive income		(149,324	)		38,395			12,431			37,954			(139,132	)

Total Share-owners' Equity		2,043,711			2,271,889			2,313,075			2,419,317			2,293,542

TOTAL LIABILITIES AND EQUITY	$	29,070,910		$	38,805,973		$	39,795,294		$	39,791,832		$	40,275,879

SHARE-OWNERS' EQUITY PER SHARE
Total Share-owners' Equity	$	29.23		$	32.49		$	33.06		$	34.53		$	32.70
Accumulated other comprehensive income		(2.14	)		0.55			0.18			0.54			(1.98	)
Excluding accumulated other comprehensive income *	$	31.37		$	31.94		$	32.88		$	33.99		$	34.68

Total Share-owners' Equity	$	2,043,711		$	2,271,889		$	2,313,075		$	2,419,317		$	2,293,542
Accumulated other comprehensive income		(149,324	)		38,395			12,431			37,954			(139,132	)
Share-owners' Equity (excluding accumulated other comprehensive income) *	$	2,193,035		$	2,233,494		$	2,300,644		$	2,381,363		$	2,432,674

Common shares outstanding		69,916,577			69,934,277			69,964,648			70,056,891			70,140,728
Treasury Stock shares		3,335,383			3,317,683			3,287,312			3,195,069			3,111,232

* "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)

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS			6 MOS
	2006			2006			2006			2007			2007			2006			2007

CALCULATION OF NET INCOME PER SHARE

Net income	$	66,941		$	57,301		$	85,182		$	90,583		$	65,105		$	139,078		$	155,688

Average shares outstanding-basic		70,805,802			70,811,292			70,811,686			71,017,662			71,074,976			70,779,151			71,046,489
Average shares outstanding-diluted		71,381,677			71,355,221			71,269,472			71,487,063			71,490,467			71,469,976			71,488,786

Net income per share-basic	$	0.94		$	0.81		$	1.21		$	1.28		$	0.92		$	1.96		$	2.19
Net income per share-diluted	$	0.94		$	0.80		$	1.19		$	1.27		$	0.91		$	1.95		$	2.18

Income from continuing operations	$	66,941		$	57,301		$	85,182		$	90,583		$	65,105		$	139,078		$	155,688
EPS (basic)	$	0.94		$	0.81		$	1.21		$	1.28		$	0.92		$	1.96		$	2.19
EPS (diluted)	$	0.94		$	0.80		$	1.19		$	1.27		$	0.91		$	1.95		$	2.18

CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE

RIGL - Derivatives	$	(4,799	)	$	(55,302	)	$	25,248		$	(2,291	)	$	76,281		$	8,538		$	73,990
Derivative Gains related to Corporate Debt and Investments		(674	)		(654	)		(77	)		(257	)		(237	)		(2,005	)		(494	)
Derivative Gains related to Annuities		(672	)		1,808			960			(254	)		(1,351	)		(21	)		(1,605	)
RIGL - All Other Investments, net of participating income		6,495			78,645			5,623			10,144			(70,316	)		6,322			(60,172	)
Related amortization of DAC & VOBA		(1,549	)		(6,379	)		(1,276	)		(1,196	)		(830	)		(1,549	)		(2,026	)
		(1,199	)		18,118			30,478			6,146			3,547			11,285			9,693
Tax effect		419			(6,341	)		(10,667	)		(2,151	)		(1,242	)		(3,950	)		(3,393	)
	$	(780	)	$	11,777		$	19,811		$	3,995		$	2,305		$	7,335		$	6,300

RIGL - Derivatives per share-diluted	$	(0.05	)	$	(0.49	)	$	0.23		$	(0.03	)	$	0.68		$	0.06		$	0.65
RIGL - All Other Investments per share-diluted	$	0.04		$	0.66		$	0.05		$	0.09		$	(0.65	)	$	0.04		$	(0.56	)



OPERATING INCOME PER SHARE *

Net income per share-diluted	$	0.94		$	0.80		$	1.19		$	1.27		$	0.91		$	1.95		$	2.18
Discontinued operations		0			0			0			0			0			0			0
RIGL - Derivatives per share-diluted		(0.05	)		(0.49	)		0.23			(0.03	)		0.68			0.06			0.65
RIGL - All Other Investments, net of participating income per share-diluted		0.04			0.66			0.05			0.09			(0.65	)		0.04			(0.56	)
Change in accounting principle		0.00			0.00			0.00			0.00			0.00			0.00			0.00
Operating income per share-diluted	$	0.95		$	0.63		$	0.91		$	1.21		$	0.88		$	1.85		$	2.09


NET OPERATING INCOME *

Net income	$	66,941		$	57,301		$	85,182		$	90,583		$	65,105		$	139,078		$	155,688
RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities		(3,994	)		(35,197	)		16,985			(1,822	)		48,551			4,233			46,729
RIGL - All Other Investments net of tax, amortization, and participating income		3,216			46,972			2,826			5,816			(46,245	)		3,103			(40,429	)
Discontinued operations		0			0			0			0			0			0			0
Change in accounting principle		0			0			0			0			0			0			0
Net operating income	$	67,719		$	45,526		$	65,371		$	86,589		$	62,799		$	131,742		$	149,388


PRETAX OPERATING INCOME **

Income before income tax and discontinued operations	$	102,686		$	87,898		$	130,667		$	133,328		$	101,441		$	213,343		$	234,769
RIGL - Derivatives		(4,799	)		(55,302	)		25,248			(2,291	)		76,281			8,538			73,990
Derivative gains related to corporate debt, investments & annuities		(1,346	)		1,153			883			(511	)		(1,588	)		(2,026	)		(2,099	)
RIGL - All Other Investments, net of participating income		6,495			78,645			5,623			10,144			(70,316	)		6,322			(60,172	)
Related amortization of DAC & VOBA		(1,549	)		(6,379	)		(1,276	)		(1,196	)		(830	)		(1,549	)		(2,026	)
Pretax operating income	$	103,885		$	69,781		$	100,189		$	127,182		$	97,894		$	202,058		$	225,076


* "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)

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR
	2006			2006			2006			2007			2007
Total Portfolio

Fixed Income	$	14,901.3		$	21,146.3		$	21,367.3		$	21,570.5		$	21,459.6
Mortgage Loans		3,537.8			3,650.4			3,880.0			4,025.0			4,119.4
Real Estate		57.1			52.3			38.9			38.8			12.1
Equities		121.2			124.5			128.7			69.2			68.5
Policy Loans		454.2			835.8			839.5			822.9			819.4
Short Term Investments		734.0			1,377.2			1,381.1			1,064.8			810.0
Other Long Term Investments		290.4			290.3			310.2			167.6			186.0
Total Invested Assets	$	20,096.1		$	27,476.8		$	27,945.7		$	27,758.8		$	27,474.9

Fixed Income

Corporate Bonds	$	6,571.3		$	10,247.2		$	10,223.1		$	10,796.0		$	10,972.0
Mortgage Backed Securities		5,900.0			8,299.4			7,870.3			8,331.8			8,004.5
US Govt Bonds		908.4			654.4			1,373.8			529.4			570.8
Public Utilities		1,477.2			1,821.0			1,784.5			1,794.4			1,820.3
States, Municipals and Political Subdivisions		44.1			124.0			115.3			118.6			91.7
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	$	14,901.3		$	21,146.3		$	21,367.3		$	21,570.5		$	21,459.6

Fixed Income - Quality

AAA		46.0	%		44.8	%		46.2	%		44.1	%		42.5	%
AA		3.4	%		6.6	%		6.8	%		8.4	%		8.5	%
A		16.2	%		18.5	%		18.4	%		19.1	%		19.8	%
BBB		29.6	%		28.1	%		27.0	%		26.7	%		26.7	%
BB or Less		4.8	%		2.0	%		1.6	%		1.7	%		2.5	%
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		68.1	%		68.1	%		68.3	%		66.9	%		65.9	%
Apartments		10.6	%		10.6	%		10.0	%		11.2	%		11.6	%
Office Buildings		11.2	%		11.7	%		11.9	%		12.2	%		12.8	%
Warehouses		7.8	%		7.2	%		7.1	%		7.0	%		7.6	%
Miscellaneous		2.3	%		2.4	%		2.7	%		2.7	%		2.1	%
		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Problem Mortgage Loans

60 Days Past Due	$	0.0		$	0.0		$	0.0		$	2.0		$	0.0
90 Days Past Due		3.1			6.6			0.0			0.0			0.0
Renegotiated Loans		0.2			0.2			0.1			0.1			2.1
Foreclosed Real Estate		5.1			5.1			15.7			0.0			0.0
	$	8.3		$	11.8		$	15.8		$	2.1		$	2.1

PROTECTIVE LIFE CORPORATION
Life Marketing and Acquisitions - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)
	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS			6 MOS
	2006			2006			2006			2007			2007			2006			2007
LIFE MARKETING

REVENUES
Gross Premiums and Policy Fees	$	325,496		$	327,355		$	349,650		$	345,685		$	361,624		$	650,860		$	707,309
Reinsurance Ceded		(237,148	)		(206,269	)		(254,542	)		(207,614	)		(239,702	)		(445,779	)		(447,316	)
Net Premiums and Policy Fees		88,348			121,086			95,108			138,071			121,922			205,081			259,993
Net investment income		75,474			80,444			79,726			81,103			82,291			148,327			163,394
Realized investment gains (losses)		0			0			0			0			0			0			0
Other income		32,735			32,278			43,539			51,365			30,992			62,074			82,357
Total Revenues		196,557			233,808			218,373			270,539			235,205			415,482			505,744

BENEFITS & EXPENSES
Benefits and settlement expenses		122,432			147,213			130,396			149,329			152,147			258,331			301,476
Amortization of deferred policy acquisition costs and value of businesses acquired		1,636			21,689			17,436			28,698			25,564			21,102			54,262
Other operating expenses		21,264			24,636			28,628			27,232			19,660			44,043			46,892
Total Benefits and Expenses		145,332			193,538			176,460			205,259			197,371			323,476			402,630

INCOME BEFORE INCOME TAX	$	51,225		$	40,270		$	41,913		$	65,280		$	37,834		$	92,006		$	103,114


ACQUISITIONS

REVENUES
Gross Premiums and Policy Fees	$	63,203		$	188,491		$	199,891		$	194,482		$	214,464		$	126,189		$	408,946
Reinsurance Ceded		(16,617	)		(112,636	)		(110,416	)		(118,242	)		(137,370	)		(33,259	)		(256,612	)
Net Premiums and Policy Fees		46,586			75,855			89,475			76,240			77,094			92,930			153,334
Net investment income		53,626			152,834			152,686			148,986			145,263			108,116			294,249
RIGL - Derivatives		0			(58,544	)		13,379			(3,703	)		71,782			0			68,079
RIGL - All Other Investments		0			74,628			(747	)		7,933			(69,216	)		0			(61,283	)
Other income		293			4,774			354			2,248			2.525			910			4,773
Total Revenues		100,505			249,547			255,147			231,704			227,448			201,956			459,152

BENEFITS & EXPENSES
Benefits and settlement expenses		66,984			178,946			181,149			161,904			158,284			134,438			320,188
Amortization of deferred policy acquisition costs and value of businesses acquired		6,809			15,142			30,528			20,554			19,977			13,144			40,531
Other operating expenses		7,754			12,501			(1,182	)		13,373			16,584			15,510			29,957
Total Benefits and Expenses		81,547			206,589			210,495			195,831			194,845			163,092			390,676

INCOME BEFORE INCOME TAX		18,958			42,958			44,652			35,873			32,603			38,864			68,476


Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives		0			(58,544	)		13,379			(3,703	)		71,782			0			68,079
Less: RIGL - All Other Investments		0			74,628			(747	)		7,933			(69,216	)		0			(61,283	)
Add back: Related amortization of deferred policy acquisition costs and value of businesses acquired		0			5,186			1,590			606			777			0			1,383

PRETAX OPERATING INCOME	$	18,958		$	32,060		$	33,610		$	32,249		$	30,814		$	38,864		$	63,063

PROTECTIVE LIFE CORPORATION
Life Marketing and Annuities Data
(Dollars in thousands)
(Unaudited)


	2006		2006		2006		2007		2007		6 MOS		6 MOS
	2ND QTR		3RD QTR		4TH QTR		1ST QTR		2ND QTR		2006		2007
LIFE MARKETING


SALES BY PRODUCT
Term	$	35,733	$	39,552	$	32,618	$	33,492	$	43,955	$	73,210	$	77,447
U/L		16,109		13,028		15,090		14,197		18,515		47,597		32,712
VUL		1,628		1,697		1,914		1,828		2,181		2,913		4,009
Total	$	53,470	$	54,277	$	49,622	$	49,517	$	64,651	$	123,720	$	114,168

SALES BY DISTRIBUTION
Brokerage general agents	$	32,644	$	33,733	$	29,438	$	29,879	$	41,210	$	70,824	$	71,089
Independent agents		9,216		7,814		9,932		8,328		10,629		23,016		18,957
Stockbrokers/banks		8,082		7,116		6,983		8,493		9,452		21,649		17,945
Direct Response & BOLI		3,528		5,614		3,269		2,817		3,360		8,231		6,177
Total	$	53,470	$	54,277	$	49,622	$	49,517	$	64,651	$	123,720	$	114,168



ANNUITIES


SALES
Variable Annuity	$	81,206	$	76,299	$	91,526	$	79,671	$	123,263	$	154,937	$	202,934
Immediate Annuity		49,113		59,292		73,057		55,201		61,517		94,158		116,718
Single Premium Deferred Annuity		0		151,172		124,688		75,838		114,326		0		190,164
Market Value Adjusted Annuity		58,464		112,511		99,166		105,195		121,839		86,837		227,034
Equity Indexed Annuity		29,002		16,975		12,648		7,628		7,872		47,674		15,500
Total	$	217,785	$	416,249	$	401,085	$	323,533	$	428,817	$	383,606	$	752,350

PRETAX OPERATING INCOME
Variable Annuity	$	5,425	$	3,484	$	5,701	$	4,673	$	5,114	$	10,705	$	9,787
Fixed Annuity		725		1,867		2,702		933		1,555		186		2,488
Total	$	6,150	$	5,351	$	8,403	$	5,606	$	6,669	$	10,891	$	12,275

DEPOSIT BALANCE
VA Fixed Annuity	$	218,951	$	209,135	$	206,237	$	194,479	$	214,966
VA Separate Account Annuity		2,331,932		2,424,837		2,559,452		2,594,554		2,725,302
Sub-total		2,550,883		2,633,972		2,765,689		2,789,033		2,940,268
Fixed Annuity		3,256,655		3,521,346		3,780,062		3,929,194		4,164,402
Total	$	5,807,538	$	6,155,318	$	6,545,751	$	6,718,227	$	7,104,670

PROTECTIVE LIFE CORPORATION
Annuities, Stable Value Contracts, and Asset Protection
Quarterly Earnings Trends (Dollars in thousands)
(Unaudited)
	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS			6 MOS
	2006			2006			2006			2007			2007			2006			2007
ANNUITIES
REVENUES
Gross Premiums and Policy Fees	$	8,000		$	7,794		$	8,136		$	8,262		$	8,633		$	16,144		$	16,895
Reinsurance Ceded		0			0			0			0			0			0			0
Net Premiums and Policy Fees		8,000			7,794			8,136			8,262			8,633			16,144			16,895
Net investment income		54,865			56,475			60,326			60,861			64,890			108,359			125,751
RIGL - Derivatives		672			(1,808	)		(960	)		254			1,351			21			1,605
RIGL - All Other Investments		1,598			3,412			(223	)		1,664			53			1,508			1,717
Other income		2,343			2,469			2,725			2,713			2,797			5,242			5,510
Total Revenues		67,478			68,342			70,004			73,754			77,724			131,274			151,478

BENEFITS & EXPENSES
Benefits and settlement expenses		46,883			48,233			48,809			55,949			56,101			94,196			112,050
Amortization of deferred policy acquisition costs and value of businesses acquired		7,383			7,778			7,585			5,128			9,909			12,509			15,037
Other operating expenses		7,013			4,761			5,116			5,997			5,045			13,719			11,042
Total Benefits and Expenses		61,279			60,772			61,510			67,074			71,055			120,424			138,129

INCOME BEFORE INCOME TAX		6,199			7,570			8,494			6,680			6,669			10,850			13,349

Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives		672			(1,808	)		(960	)		254			1,351			21			1,605
Add back: Derivative gains related to equity indexed annuities		672			(1,808	)		(960	)		254			1,351			21			1,605
Less: RIGL - All Other Investments		1,598			3,412			(223	)		1,664			53			1,508			1,717
Add back: Related amortization of deferred policy acquisition costs		1,549			1,193			(314	)		590			53			1,549			643

PRETAX OPERATING INCOME	$	6,150		$	5,351		$	8,403		$	5,606		$	6,669		$	10,891		$	12,275

STABLE VALUE CONTRACTS
REVENUES
Gross Premiums and Policy Fees	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Reinsurance Ceded		0			0			0			0			0			0			0
Net Premiums and Policy Fees		0			0			0			0			0			0			0
Net investment income		82,350			80,734			80,336			79,101			71,478			164,583			150,579
RIGL - Derivatives		98			(13	)		210			4,270			(104	)		410			4,166
RIGL - All Other Investments		612			4,534			574			(2,845	)		(479	)		(4,554	)		(3,324	)
Other income		0			0			0			0			0			0			0
Total Revenues		83,060			85,255			81,120			80,526			70,895			160,439			151,421

BENEFITS & EXPENSES
Benefits and settlement expenses		68,415			68,154			65,819			64,719			57,097			135,878			121,816
Amortization of deferred policy acquisition costs and value of businesses acquired		1,136			1,064			1,009			1,168			987			2,365			2,155
Other operating expenses		999			1,087			1,008			1,028			1,039			2,196			2,067
Total Benefits and Expenses		70,550			70,305			67,836			66,915			59,123			140,439			126,038

INCOME BEFORE INCOME TAX		12,510			14,950			13,284			13,611			11,772			20,000			25,383

Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives		98			(13	)		210			4,270			(104	)		410			4,166
Less: RIGL-All Other Investments		612			4,534			574			(2,845	)		(479	)		(4,554	)		(3,324	)

PRETAX OPERATING INCOME	$	11,800		$	10,429		$	12,500		$	12,186		$	12,355		$	24,144		$	24,541

ASSET PROTECTION
REVENUES
Gross Premiums and Policy Fees	$	100,203		$	104,564		$	99,067		$	99,420		$	97,985		$	200,893		$	197,405
Reinsurance Ceded		(53,997	)		(52,775	)		(46,126	)		(45,138	)		(45,689	)		(109,390	)		(90,827	)
Net Premiums and Policy Fees		46,206			51,789			52,941			54,282			52,296			91,503			106,578
Net investment income		8,076			8,649			8,812			9,212			9,467			15,884			18,679
Realized investment gains (losses)		0			0			0			0			0			0			0
Other income		16,021			20,597			18,087			16,529			20,455			28,065			36,984
Total Revenues		70,303			81,035			79,840			80,023			82,218			135,452			162,241

BENEFITS & EXPENSES
Benefits and settlement expenses		22,870			26,137			27,202			25,815			26,113			45,079			51,928
Amortization of deferred policy acquisition costs and value of businesses acquired		16,321			20,713			17,111			20,703			21,464			33,241			42,167
Other operating expenses		22,208			48,586			28,957			23,421			23,119			39,490			46,540
Total Benefits and Expenses		61,399			95,436			73,270			69,939			70,696			117,810			140,635

INCOME BEFORE INCOME TAX	$	8,904		$	(14,401	)	$	6,570		$	10,084		$	11,522		$	17,642		$	21,606

PROTECTIVE LIFE CORPORATION
Stable Value Contracts and Asset Protection Data
(Dollars in thousands)
(Unaudited)


	2006			2006			2006			2007			2007			6 MOS			6 MOS
	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			2006			2007
STABLE VALUE CONTRACTS

SALES
GIC	$	111,400		$	107,500		$	29,000		$	2,500		$	75,000		$	157,600		$	77,500
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			50,000			0			50,000
GFA - Registered - Retail		13,078			54,743			31,164			13,120			10,014			53,919			23,134
Total	$	124,478		$	162,243		$	60,164		$	15,620		$	135,014		$	211,519		$	150,634


DEPOSIT BALANCE
Quarter End Balance	$	5,764,856		$	5,515,633		$	5,513,464		$	5,055,382		$	4,806,721		$	5,764,856		$	4,806,721
Average Daily Balance	$	5,853,111		$	5,662,236		$	5,520,061		$	5,461,832		$	4,780,565		$	5,914,749		$	5,119,688

OPERATING SPREAD		0.82	%		0.75	%		0.93	%		0.92	%		1.04	%		0.83	%		0.97	%


	2006			2006			2006			2007			2007			6 MOS			6 MOS
	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			2006			2007

ASSET PROTECTION

SALES
Credit	$	39,952		$	41,488		$	27,482		$	28,082		$	31,579		$	71,799		$	59,661
Service Contracts		73,347			79,183			73,534			72,937			86,519			127,064			159,456
Other		22,900			35,792			39,456			38,030			35,796			39,821			73,826
Total	$	136,199		$	156,463		$	140,472		$	139,049		$	153,894		$	238,684		$	292,943

PROTECTIVE LIFE CORPORATION
Corporate & Other Segment - Quarterly Earnings Trends
(Dollars in thousands)
(Unaudited)

	2ND QTR			3RD QTR			4TH QTR			1ST QTR			2ND QTR			6 MOS			6 MOS
	2006			2006			2006			2007			2007			2006			2007


REVENUES
Gross Premiums and Policy Fees	$	9,309		$	9,253		$	9,231		$	9,169		$	8,458		$	19,819		$	17,627
Reinsurance Ceded		(7	)		(8	)		(4	)		(4	)		(4	)		(11	)		(8	)
Net Premiums and Policy Fees		9,302			9,245			9,227			9,165			8,454			19,808			17,619
Net investment income		26,343			31,610			27,347			36,419			37,047			54,530			73,466
RIGL - Derivatives		(5,569	)		5,063			12,619			(3,112	)		3,252			8,107			140
RIGL - All Other Investments		12,453			(3,929	)		6,019			6,542			3,033			22,862			9,575
Other income		2,207			2,237			1,470			937			683			5,844			1,620
Total Revenues		44,736			44,226			56,682			49,951			52,469			111,151			102,420

BENEFITS & EXPENSES
Benefits and settlement expenses		8,353			20,265			9,347			10,069			9,207			17,623			19,276
Amortization of deferred policy acquisition costs and value of businesses acquired		868			813			752			129			135			1,823			264
Other operating expenses		30,625			26,597			30,829			37,953			42,086			57,724			80,039
Total Benefits and Expenses		39,846			47,675			40,928			48,151			51,428			77,170			99,579

INCOME BEFORE INCOME TAX		4,890			(3,449	)		15,754			1,800			1,041			33,981			2,841

Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives		(5,569	)		5,063			12,619			(3,112	)		3,252			8,107			140
Less: RIGL-All Other Investments, net of participating income		4,285			(3,929	)		6,019			3,392			(674	)		9,368			2,718
Add back: Derivative gains related to corporate debt and investments		674			654			77			257			237			2,005			494

PRETAX OPERATING INCOME	$	6,848		$	(3,929	)	$	(2,807	)	$	1,777		$	(1,300	)	$	18,511		$	477