EX-99.2 3 a09-31093_2ex99d2.htm EX-99.2

Exhibit 99.2

 

Draft       11/4/2009

 

 

Supplemental Schedules

 

Third Quarter 2009

 


GRAPHIC

 

Draft

11/4/2009

 

 

Page 1

 

Quarterly Financial Highlights

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax Operating Income *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life Marketing

 

$

 52,222

 

$

 51,737

 

$

 42,510

 

$

 37,179

 

$

 26,544

 

$

 136,798

 

$

 106,233

 

Acquisitions

 

33,021

 

35,368

 

33,621

 

35,041

 

33,061

 

101,111

 

101,723

 

Annuities

 

556

 

6,175

 

(575

)

21,495

 

16,075

 

12,532

 

36,995

 

Stable Value Products

 

28,184

 

27,866

 

20,207

 

16,976

 

14,339

 

61,945

 

51,522

 

Asset Protection

 

8,186

 

6,087

 

6,280

 

4,656

 

5,731

 

24,702

 

16,667

 

Corporate & Other

 

(32,173

)

(41,747

)

(9,247

)

9,648

 

(22,826

)

(64,239

)

(22,425

)

Total Pre-tax Operating Income

 

$

 89,996

 

$

 85,486

 

$

 92,796

 

$

 124,995

 

$

 72,924

 

$

 272,849

 

$

 290,715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total GAAP Assets

 

$

 41,152,791

 

$

 39,572,449

 

$

 38,760,243

 

$

 40,392,169

 

$

 41,787,606

 

 

 

 

 

Shareowners’ Equity

 

$

 1,524,655

 

$

 761,095

 

$

 783,178

 

$

 1,628,375

 

$

 2,302,799

 

 

 

 

 

Shareowners’ Equity (excluding accumulated other comprehensive income (loss)) **

 

$

 2,452,860

 

$

 2,428,151

 

$

 2,443,382

 

$

 2,660,094

 

$

 2,678,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Closing Price

 

$

 28.51

 

$

 14.35

 

$

 5.25

 

$

 11.44

 

$

 21.42

 

 

 

 

 

Average Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

71,115,365

 

71,122,593

 

70,850,571

 

77,893,480

 

86,481,240

 

71,104,383

 

78,465,685

 

Diluted

 

71,115,365

 

71,122,593

 

71,392,134

 

78,528,511

 

87,372,659

 

71,104,383

 

79,156,305

 

 

* “Pre-tax Operating Income” is a non-GAAP financial measure.  “Income (loss) Before Income Tax” is a GAAP financial measure to which “Pre-tax Operating Income” may be compared.

See Page 5 for a reconciliation of “Pre-tax Operating Income” to “Income (loss) Before Income Tax”.

 

** “Shareowners’ equity excluding accumulated other comprehensive income (loss)” is a non-GAAP financial measure.  “Shareowners’ equity” is a GAAP financial measure to which “Shareowners’ equity excluding accumulated other comprehensive income (loss)” may be compared.

See Page 4 for a reconciliation of “Shareowners’ equity excluding accumulated other comprehensive income (loss)” to “Shareowners’ equity”.

 


Draft       11/4/2009
Page 2

 

Financial Strength Ratings as of September 30, 2009

 

 

 

A.M. Best

 

Fitch

 

Standard & Poor’s

 

Moody’s

 

Legal Entity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance companies:

 

 

 

 

 

 

 

 

 

Protective Life Insurance Company

 

A+

 

A

 

AA-

 

A2

 

West Coast Life Insurance Company

 

A+

 

A

 

AA-

 

A2

 

Protective Life and Annuity Insurance Company

 

A+

 

A

 

AA-

 

—

 

Lyndon Property Insurance Company

 

A-

 

—

 

—

 

—

 

 

Credit Ratings as of September 30, 2009

 

 

 

A.M. Best

 

Fitch

 

Standard & Poor’s

 

Moody’s

 

Legal Entity

 

 

 

 

 

 

 

 

 

Protective Life Corporation

 

a-

 

BBB+/BBB

(1)

A-

 

Baa2

 

Protective Life Insurance Company

 

aa-

 

—

 

AA-

 

—

 

 

(1)  The default rating is BBB+.  The BBB rating is related to our senior notes.

 


Draft       11/4/2009
Page 3

 

GAAP Consolidated Statements of Income (Loss)

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

664,464

 

$

686,812

 

$

659,152

 

$

679,989

 

$

652,497

 

$

2,005,741

 

$

1,991,638

 

Reinsurance Ceded

 

(366,734

)

(421,230

)

(358,299

)

(394,225

)

(351,664

)

(1,161,580

)

(1,104,188

)

Net Premiums and Policy Fees

 

297,730

 

265,582

 

300,853

 

285,764

 

300,833

 

844,161

 

887,450

 

Net investment income

 

423,522

 

404,236

 

421,685

 

431,144

 

409,956

 

1,270,928

 

1,262,785

 

RIGL - Derivatives

 

91,991

 

(38,764

)

92,433

 

(97,991

)

(195,540

)

155,421

 

(201,098

)

RIGL - All Other Investments

 

(148,458

)

(63,766

)

(41,843

)

167,799

 

165,576

 

(208,928

)

291,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTTI losses

 

(202,644

)

(29,168

)

(117,314

)

(48,877

)

(14,873

)

(282,630

)

(181,064

)

OTTI losses/(gains) recognized in OCI (before taxes)

 

—

 

—

 

27,488

 

7,906

 

(16,095

)

—

 

19,299

 

Net OTTI losses recognized in earnings

 

(202,644

)

(29,168

)

(89,826

)

(40,971

)

(30,968

)

(282,630

)

(161,765

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

47,943

 

47,057

 

38,663

 

39,586

 

41,222

 

141,435

 

119,471

 

Total Revenues

 

510,084

 

585,177

 

721,965

 

785,331

 

691,079

 

1,920,387

 

2,198,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

535,839

 

475,682

 

504,359

 

478,148

 

521,218

 

1,500,859

 

1,503,725

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

39,331

 

54,591

 

113,648

 

89,949

 

47,240

 

179,151

 

250,837

 

Other operating expenses

 

60,788

 

47,120

 

46,671

 

49,647

 

54,459

 

186,060

 

150,777

 

Interest on indebtedness - subsidiaries

 

16,990

 

14,698

 

7,991

 

10,782

 

9,615

 

52,777

 

28,388

 

Interest on indebtedness - holding company - other debt

 

7,677

 

9,942

 

7,740

 

7,186

 

7,510

 

22,211

 

22,436

 

Interest on indebtedness - holding company - hybrid securities

 

9,401

 

9,401

 

9,400

 

9,401

 

9,401

 

28,203

 

28,202

 

Total Benefits and Expenses

 

670,026

 

611,434

 

689,809

 

645,113

 

649,443

 

1,969,261

 

1,984,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAX

 

(159,942

)

(26,257

)

32,156

 

140,218

 

41,636

 

(48,874

)

214,010

 

Income tax expense (benefit)

 

(59,934

)

(10,344

)

10,021

 

49,461

 

14,051

 

(22,932

)

73,533

 

NET INCOME (LOSS)

 

$

(100,008

)

$

(15,913

)

$

22,135

 

$

90,757

 

$

27,585

 

$

(25,942

)

$

140,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA FOR QUARTER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income-diluted *

 

$

0.88

 

$

0.80

 

$

0.86

 

$

1.03

 

$

0.55

 

 

 

 

 

RIGL - Derivatives net of gains related to corp debt, investments and annuities

 

0.91

 

(0.15

)

0.65

 

(0.93

)

(1.24

)

 

 

 

 

RIGL - All Other Investments, net of participating income

 

(3.20

)

(0.87

)

(1.20

)

1.06

 

1.01

 

 

 

 

 

Net income (loss)-diluted

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.16

 

$

0.32

 

 

 

 

 

Average shares outstanding-diluted

 

71,115,365

 

71,122,593

 

71,392,134

 

78,528,511

 

87,372,659

 

 

 

 

 

Dividends paid

 

$

0.235

 

$

0.12

 

$

0.12

 

$

0.12

 

$

0.12

 

 

 

 

 

PER SHARE DATA FOR YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income-diluted *

 

$

2.57

 

$

3.37

 

$

0.86

 

$

1.90

 

$

2.40

 

 

 

 

 

RIGL - Derivatives net of gains related to corp debt, investments and annuities

 

1.54

 

1.39

 

0.65

 

(0.36

)

(1.71

)

 

 

 

 

RIGL - All Other Investments, net of participating income

 

(4.47

)

(5.35

)

(1.20

)

(0.03

)

1.08

 

 

 

 

 

Net income (loss)-diluted

 

$

(0.36

)

$

(0.59

)

$

0.31

 

$

1.51

 

$

1.77

 

 

 

 

 

Average shares outstanding-diluted

 

71,104,383

 

71,108,961

 

71,392,134

 

74,980,036

 

79,156,305

 

 

 

 

 

Dividends paid

 

$

0.695

 

$

0.815

 

$

0.12

 

$

0.24

 

$

0.36

 

 

 

 

 

 

* “Operating Income” is a non-GAAP financial measure.  “Net Income (loss)” is a GAAP financial measure to which “Operating Income” may be compared.

 


Draft       11/4/2009
Page 4

 

GAAP Consolidated Balance Sheets

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities

 

$

22,084,909

 

$

20,098,980

 

$

19,571,798

 

$

20,561,840

 

$

22,560,159

 

Equity securities

 

312,389

 

302,132

 

268,211

 

269,108

 

270,057

 

Mortgage loans

 

3,653,919

 

3,848,288

 

3,858,573

 

3,846,417

 

3,849,349

 

Investment real estate

 

7,793

 

14,810

 

14,769

 

17,427

 

19,651

 

Policy loans

 

811,846

 

810,933

 

800,617

 

792,853

 

788,402

 

Other long-term investments

 

329,259

 

432,137

 

451,847

 

346,037

 

232,927

 

Long-term investments

 

27,200,115

 

25,507,280

 

24,965,815

 

25,833,682

 

27,720,545

 

Short-term investments

 

987,604

 

1,059,506

 

845,558

 

1,841,149

 

1,076,621

 

Total investments

 

28,187,719

 

26,566,786

 

25,811,373

 

27,674,831

 

28,797,166

 

Cash

 

86,587

 

149,358

 

180,648

 

206,540

 

225,302

 

Accrued investment income

 

308,144

 

287,543

 

286,363

 

270,698

 

283,559

 

Accounts and premiums receivable

 

163,258

 

55,017

 

59,867

 

90,237

 

113,847

 

Reinsurance receivable

 

5,227,020

 

5,254,788

 

5,273,817

 

5,309,360

 

5,336,371

 

Deferred policy acquisition costs and value of businesses acquired

 

3,965,955

 

4,200,321

 

4,243,218

 

3,900,088

 

3,660,267

 

Goodwill

 

122,128

 

120,954

 

120,179

 

119,405

 

118,630

 

Property and equipment, net

 

40,274

 

39,707

 

37,795

 

38,401

 

38,031

 

Other assets

 

172,759

 

174,035

 

174,777

 

196,235

 

172,002

 

Current/Deferred income tax

 

154,454

 

453,526

 

440,110

 

69,004

 

47,358

 

Assets related to separate accounts

 

 

 

 

 

 

 

 

 

 

 

Variable annuity

 

2,426,806

 

2,027,470

 

1,907,272

 

2,257,859

 

2,694,715

 

Variable universal life

 

297,687

 

242,944

 

224,824

 

259,511

 

300,358

 

TOTAL ASSETS

 

$

41,152,791

 

$

39,572,449

 

$

38,760,243

 

$

40,392,169

 

$

41,787,606

 

 


Draft       11/4/2009
Page 5

 

GAAP Consolidated Balance Sheets - Continued

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Policy liabilities and accruals

 

 

 

 

 

 

 

 

 

 

 

Future policy benefits and claims

 

$

16,882,724

 

$

17,008,524

 

$

17,118,094

 

$

17,169,737

 

$

17,220,814

 

Unearned premiums

 

1,248,942

 

1,251,855

 

1,230,108

 

1,221,101

 

1,231,165

 

Stable value product deposits

 

6,021,834

 

4,960,405

 

4,360,658

 

4,138,131

 

3,863,329

 

Annuity deposits

 

8,976,496

 

9,357,427

 

9,316,791

 

9,596,476

 

9,726,082

 

Other policyholders’ funds

 

424,185

 

421,313

 

443,173

 

473,105

 

491,216

 

Other liabilities

 

741,120

 

926,821

 

719,550

 

922,242

 

852,449

 

Deferred income taxes

 

58,747

 

—

 

—

 

36,037

 

400,084

 

Non-recourse funding obligations

 

1,375,000

 

1,375,000

 

1,375,000

 

1,375,000

 

1,375,000

 

Debt

 

649,852

 

714,852

 

756,852

 

789,852

 

804,852

 

Subordinated Debt Securities

 

524,743

 

524,743

 

524,743

 

524,743

 

524,743

 

Liabilities related to separate accounts

 

 

 

 

 

 

 

 

 

 

 

Variable annuity

 

2,426,806

 

2,027,470

 

1,907,272

 

2,257,859

 

2,694,715

 

Variable universal life

 

297,687

 

242,944

 

224,824

 

259,511

 

300,358

 

TOTAL LIABILITIES

 

39,628,136

 

38,811,354

 

37,977,065

 

38,763,794

 

39,484,807

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREOWNERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

36,626

 

36,626

 

36,626

 

44,388

 

44,388

 

Additional paid-in-capital

 

448,887

 

448,481

 

449,009

 

575,064

 

575,915

 

Treasury stock

 

(26,978

)

(26,978

)

(26,490

)

(25,945

)

(25,936

)

Cumulative Effect Adjustments

 

3,616

 

3,616

 

3,616

 

3,616

 

3,616

 

Unallocated ESOP shares

 

(474

)

(474

)

—

 

—

 

—

 

Retained earnings

 

1,991,183

 

1,966,880

 

1,980,621

 

2,062,971

 

2,080,288

 

Accumulated other comprehensive income (loss)

 

(928,205

)

(1,667,056

)

(1,660,204

)

(1,031,719

)

(375,472

)

TOTAL SHAREOWNERS’ EQUITY

 

1,524,655

 

761,095

 

783,178

 

1,628,375

 

2,302,799

 

TOTAL LIABILITIES AND SHAREOWNERS’ EQUITY

 

$

41,152,791

 

$

39,572,449

 

$

38,760,243

 

$

40,392,169

 

$

41,787,606

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREOWNERS’ EQUITY PER SHARE

 

 

 

 

 

 

 

 

 

 

 

Total Shareowners’ Equity

 

$

21.81

 

$

10.89

 

$

11.19

 

$

19.03

 

$

26.91

 

Less: Accumulated other comprehensive income (loss)

 

(13.28

)

(23.85

)

(23.72

)

(12.05

)

(4.39

)

Excluding accumulated other comprehensive income (loss)*

 

$

35.09

 

$

34.74

 

$

34.91

 

$

31.08

 

$

31.30

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareowners’ Equity

 

$

1,524,655

 

$

761,095

 

$

783,178

 

$

1,628,375

 

$

2,302,799

 

Less: Accumulated other comprehensive income (loss)

 

(928,205

)

(1,667,056

)

(1,660,204

)

(1,031,719

)

(375,472

)

Shareowners’ Equity (excluding accumulated other comprehensive income (loss)) *

 

$

2,452,860

 

$

2,428,151

 

$

2,443,382

 

$

2,660,094

 

$

2,678,271

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

69,903,431

 

69,905,807

 

69,986,429

 

85,578,907

 

85,579,870

 

Treasury Stock shares

 

3,348,529

 

3,346,153

 

3,265,531

 

3,198,053

 

3,197,090

 

 

* “Shareowners’ equity excluding accumulated other comprehensive income (loss)” is a non-GAAP financial measure.  “Shareowners’ equity” is a GAAP financial measure to which “Shareowners’ equity excluding accumulated other comprehensive income (loss)” may be compared.

 


Draft       11/4/2009
Page 6

 

Calculation of Operating Earnings (Loss) Per Share

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALCULATION OF NET INCOME (LOSS) PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(100,008

)

$

(15,913

)

$

22,135

 

$

90,757

 

$

27,585

 

$

(25,942

)

$

140,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding-basic

 

71,115,365

 

71,122,593

 

70,850,571

 

77,893,480

 

86,481,240

 

71,104,383

 

78,465,685

 

Average shares outstanding-diluted

 

71,115,365

 

71,122,593

 

71,392,134

 

78,528,511

 

87,372,659

 

71,104,383

 

79,156,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share-basic

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.17

 

$

0.32

 

$

(0.36

)

$

1.79

 

Net income (loss) per share-diluted

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.16

 

$

0.32

 

$

(0.36

)

$

1.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(100,008

)

$

(15,913

)

$

22,135

 

$

90,757

 

$

27,585

 

$

(25,942

)

$

140,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS (basic)

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.17

 

$

0.32

 

$

(0.36

)

$

1.79

 

EPS (diluted)

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.16

 

$

0.32

 

$

(0.36

)

$

1.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RIGL - Derivatives

 

$

91,991

 

$

(38,764

)

$

92,433

 

$

(97,991

)

$

(195,540

)

$

155,421

 

$

(201,098

)

Derivative Gains related to Corporate Debt and Investments

 

(1,915

)

(1,569

)

(2,238

)

(1,163

)

0

 

(4,185

)

(3,401

)

Derivative Gains related to Annuities

 

10,385

 

22,496

 

(19,088

)

(13,393

)

28,864

 

18,475

 

(3,617

)

RIGL - All Other Investments, net of participating income

 

(351,102

)

(92,934

)

(131,669

)

126,828

 

134,608

 

(491,558

)

129,767

 

Related amortization of DAC & VOBA

 

703

 

(972

)

(78

)

942

 

780

 

124

 

1,644

 

 

 

(249,938

)

(111,743

)

(60,640

)

15,223

 

(31,288

)

(321,723

)

(76,705

)

Tax effect

 

87,478

 

39,110

 

21,224

 

(5,328

)

10,951

 

112,603

 

26,847

 

 

 

$

(162,460

)

$

(72,633

)

$

(39,416

)

$

9,895

 

$

(20,337

)

$

(209,120

)

$

(49,858

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RIGL - Derivatives per share-diluted

 

$

0.91

 

$

(0.15

)

$

0.65

 

$

(0.93

)

$

(1.24

)

$

1.54

 

$

(1.71

)

RIGL - All Other Investments per share-diluted

 

$

(3.20

)

$

(0.87

)

$

(1.20

)

$

1.06

 

$

1.01

 

$

(4.47

)

$

1.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS) PER SHARE *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share-diluted

 

$

(1.41

)

$

(0.22

)

$

0.31

 

$

1.16

 

$

0.32

 

$

(0.36

)

$

1.77

 

RIGL - Derivatives per share-diluted

 

0.91

 

(0.15

)

0.65

 

(0.93

)

(1.24

)

1.54

 

(1.71

)

RIGL - All Other Investments, net of participating income per share-diluted

 

(3.20

)

(0.87

)

(1.20

)

1.06

 

1.01

 

(4.47

)

1.08

 

Operating income per share-diluted

 

$

0.88

 

$

0.80

 

$

0.86

 

$

1.03

 

$

0.55

 

$

2.57

 

$

2.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET OPERATING INCOME (LOSS) *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(100,008

)

$

(15,913

)

$

22,135

 

$

90,757

 

$

27,585

 

$

(25,942

)

$

140,477

 

Less: RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities

 

65,299

 

(11,594

)

46,220

 

(73,156

)

(108,339

)

110,312

 

(135,275

)

Less: RIGL - All Other Investments net of tax, amortization, and participating income

 

(227,759

)

(61,039

)

(85,636

)

83,051

 

88,002

 

(319,432

)

85,417

 

Net operating income

 

$

62,452

 

$

56,720

 

$

61,551

 

$

80,862

 

$

47,922

 

$

183,178

 

$

190,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME (LOSS) **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax and discontinued operations

 

$

(159,942

)

$

(26,257

)

$

32,156

 

$

140,218

 

$

41,636

 

$

(48,874

)

$

214,010

 

Less: RIGL - Derivatives

 

91,991

 

(38,764

)

92,433

 

(97,991

)

(195,540

)

155,421

 

(201,098

)

Less: Derivative gains related to corporate debt, investments & annuities

 

8,470

 

20,927

 

(21,326

)

(14,556

)

28,864

 

14,290

 

(7,018

)

Less: RIGL - All Other Investments, net of participating income

 

(351,102

)

(92,934

)

(131,669

)

126,828

 

134,608

 

(491,558

)

129,767

 

Less: Related amortization of DAC & VOBA

 

703

 

(972

)

(78

)

942

 

780

 

124

 

1,644

 

Pre-tax operating income

 

$

89,996

 

$

85,486

 

$

92,796

 

$

124,995

 

$

72,924

 

$

272,849

 

$

290,715

 

 

* “Net Operating Income (Loss)” and “Operating Income (Loss) Per Share” are non-GAAP financial measures.  “Net Income (Loss)” and “Net Income (Loss) Per Share” are GAAP financial measures to which “Net Operating Income (Loss)” and “Operating Income (Loss) Per Share” may be compared.

** “Pre-tax Operating Income (Loss)” is a non-GAAP financial measure.  “Income (Loss) Before Income Tax” is a GAAP financial measure to which “Pre-tax Operating Income (Loss)” may be compared.

 


 

Draft       11/4/2009
Page 7

 

Invested Asset Summary

 

(Dollars In Millions)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

 

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Income

 

$

22,084.9

 

$

20,099.0

 

$

19,571.8

 

$

20,561.8

 

$

22,560.2

 

78

%

Mortgage Loans

 

3,653.9

 

3,848.3

 

3,858.6

 

3,846.4

 

3,849.3

 

13

%

Real Estate

 

7.8

 

14.8

 

14.8

 

17.4

 

19.7

 

0

%

Equities

 

312.4

 

302.1

 

268.2

 

269.1

 

270.1

 

1

%

Policy Loans

 

811.8

 

810.9

 

800.6

 

792.9

 

788.4

 

3

%

Short-Term Investments

 

987.6

 

1,059.5

 

845.6

 

1,841.2

 

1,076.6

 

4

%

Other Long-Term Investments

 

329.3

 

432.1

 

451.8

 

346.0

 

232.9

 

1

%

Total Invested Assets

 

$

28,187.7

 

$

26,566.7

 

$

25,811.4

 

$

27,674.8

 

$

28,797.2

 

100

%

 

 


 

Draft       11/4/2009
Page 8

 

Invested Asset Summary - Fixed Income

 

(Dollars In Millions)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

 

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Bonds

 

$

13,552.4

 

$

12,306.3

 

$

12,042.8

 

$

13,374.3

 

$

15,065.2

 

67

%

Residential Mortgage-Backed Securities

 

5,652.5

 

4,960.2

 

4,731.9

 

4,340.1

 

4,150.7

 

18

%

Commercial Mortgage-Backed Securities

 

1,249.5

 

1,184.9

 

1,164.2

 

1,109.3

 

1,111.5

 

5

%

Asset-Backed Securities

 

1,209.0

 

1,132.7

 

1,175.2

 

1,151.8

 

1,187.5

 

5

%

US Govt Bonds

 

390.2

 

484.9

 

427.5

 

429.7

 

801.8

 

4

%

States, Municipals and Political Subdivisions

 

31.3

 

30.0

 

30.2

 

156.6

 

243.5

 

1

%

Total Fixed Income Portfolio

 

$

22,084.9

 

$

20,099.0

 

$

19,571.8

 

$

20,561.8

 

$

22,560.2

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Income - Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

38.6

%

35.2

%

33.7

%

24.2

%

22.5

%

 

 

AA

 

7.1

%

6.6

%

6.1

%

6.7

%

6.1

%

 

 

A

 

18.8

%

19.8

%

19.0

%

20.2

%

20.1

%

 

 

BBB

 

30.3

%

33.0

%

33.6

%

36.0

%

38.3

%

 

 

Below investment grade

 

5.2

%

5.4

%

7.6

%

12.9

%

13.0

%

 

 

 

 

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

 

 

 

Note: Prior quarter public utilities securities have been reclassed to Corporate Bonds

 

 


 

Draft       11/4/2009
Page 9

 

Invested Asset Summary - Mortgages

 

(Dollars In Millions)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Loans - Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

64.9

%

65.2

%

64.8

%

64.6

%

64.7

%

Apartments

 

10.4

%

10.1

%

10.7

%

10.7

%

10.5

%

Office Buildings

 

14.0

%

14.3

%

14.4

%

14.4

%

14.6

%

Warehouses

 

8.1

%

7.9

%

7.7

%

7.8

%

7.8

%

Miscellaneous

 

2.6

%

2.5

%

2.4

%

2.5

%

2.4

%

 

 

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Problem Mortgage Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

60 Days Past Due

 

$

7.8

 

$

—

 

$

0.7

 

$

4.0

 

$

14.3

 

90 Days Past Due

 

7.4

 

7.4

 

10.7

 

8.8

 

7.1

 

Renegotiated Loans

 

—

 

—

 

—

 

—

 

—

 

Foreclosed Real Estate

 

—

 

7.8

 

—

 

2.7

 

5.0

 

 

 

$

15.2

 

$

15.2

 

$

11.4

 

$

15.5

 

$

26.4

 

 

 


 

Draft       11/4/2009
Page 10

 

Invested Asset Summary - Trading Portfolios

 

(Dollars In Millions)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading Portfolio Composition (excl. Modco Trading Portfolio)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

183.4

 

$

148.6

 

$

138.7

 

$

52.0

 

$

23.9

 

AA

 

19.2

 

—

 

3.6

 

40.2

 

16.3

 

A

 

81.9

 

55.3

 

48.6

 

65.3

 

88.8

 

BBB

 

103.0

 

137.5

 

134.5

 

113.9

 

132.2

 

Below investment grade

 

—

 

—

 

5.8

 

56.8

 

61.2

 

Total

 

$

387.5

 

$

341.4

 

$

331.2

 

$

328.2

 

$

322.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Modco Trading Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

1,330.5

 

$

1,357.1

 

$

1,079.0

 

$

878.4

 

$

838.2

 

AA

 

200.2

 

147.3

 

134.1

 

164.6

 

166.0

 

A

 

654.9

 

591.5

 

563.6

 

600.5

 

568.7

 

BBB

 

792.5

 

743.5

 

837.2

 

822.8

 

872.5

 

Below investment grade

 

53.2

 

55.6

 

112.1

 

280.5

 

351.2

 

Short-term investments

 

149.1

 

80.4

 

125.4

 

243.3

 

242.7

 

Total

 

$

3,180.4

 

$

2,975.4

 

$

2,851.4

 

$

2,990.1

 

$

3,039.3

 

 

 

 

 


 

Draft       11/4/2009
Page 11

 

Invested Asset Summary - MBS - Alt-A

 

Mortgage-backed Securities Collateralized by Alt-A Mortgage Loans as of September 30, 2009:

 

(Dollars In Millions)

 

2005 and

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Prior

 

2006

 

2007

 

2008

 

2009

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Fair Value of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

5.0

 

$

—

 

$

—

 

$

—

 

$

—

 

$

5.0

 

A

 

1.3

 

—

 

—

 

—

 

—

 

1.3

 

BBB

 

31.5

 

—

 

—

 

—

 

—

 

31.5

 

Below investment grade

 

34.0

 

231.1

 

149.6

 

—

 

—

 

414.7

 

Total mortgage-backed securities collateralized by Alt-A mortgage loans

 

$

71.8

 

$

231.1

 

$

149.6

 

$

—

 

$

—

 

$

452.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

(1.7

)

$

—

 

$

—

 

$

—

 

$

—

 

$

(1.7

)

A

 

—

 

—

 

—

 

—

 

—

 

—

 

BBB

 

(5.1

)

—

 

—

 

—

 

—

 

(5.1

)

Below investment grade

 

(6.6

)

(61.8

)

(36.1

)

—

 

—

 

(104.5

)

Total mortgage-backed securities collateralized by Alt-A mortgage loans

 

$

(13.4

)

$

(61.8

)

$

(36.1

)

$

—

 

$

—

 

$

(111.3

)

 


 

Draft       11/4/2009
Page 12

 

Invested Asset Summary - MBS - Sub-prime

 

Mortgage-backed Securities Collateralized by Subprime Loans as of September 30, 2009:

 

(Dollars In Millions)

 

2005 and

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Prior

 

2006

 

2007

 

2008

 

2009

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Fair Value of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

3.1

 

$

—

 

$

—

 

$

—

 

$

—

 

$

3.1

 

AA

 

0.8

 

1.4

 

—

 

—

 

—

 

2.2

 

BBB

 

0.1

 

—

 

—

 

—

 

—

 

0.1

 

Below investment grade

 

1.2

 

15.7

 

10.7

 

—

 

—

 

27.6

 

Total mortgage-backed securities collateralized by sub-prime mortgage loans

 

$

5.2

 

$

17.1

 

$

10.7

 

$

—

 

$

—

 

$

33.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

(0.7

)

$

—

 

$

—

 

$

—

 

$

—

 

$

(0.7

)

AA

 

(0.6

)

(0.2

)

—

 

—

 

—

 

(0.8

)

BBB

 

—

 

—

 

—

 

—

 

—

 

—

 

Below investment grade

 

(1.4

)

(10.0

)

(24.2

)

—

 

—

 

(35.6

)

Total mortgage-backed securities collateralized by sub-prime mortgage loans

 

$

(2.7

)

$

(10.2

)

$

(24.2

)

$

—

 

$

—

 

$

(37.1

)

 


 

Draft       11/4/2009
Page 13

 

Invested Asset Summary - MBS - Prime

 

Mortgage-backed Securities Collateralized by Prime Loans as of September 30, 2009:

 

(Dollars In Millions)

 

2005 and

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Prior

 

2006

 

2007

 

2008

 

2009

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Fair Value of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

1,294.5

 

$

208.3

 

$

21.0

 

$

—

 

$

—

 

$

1,523.8

 

AA

 

157.1

 

—

 

—

 

—

 

—

 

157.1

 

A

 

322.2

 

70.3

 

1.1

 

—

 

—

 

393.6

 

BBB

 

352.3

 

111.9

 

29.6

 

—

 

—

 

493.8

 

Below investment grade

 

194.8

 

599.6

 

302.5

 

—

 

—

 

1,096.9

 

Total mortgage-backed securities collateralized by prime loans

 

$

2,320.9

 

$

990.1

 

$

354.2

 

$

—

 

$

—

 

$

3,665.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

31.6

 

$

1.4

 

$

0.6

 

$

—

 

$

—

 

$

33.6

 

AA

 

(5.0

)

—

 

—

 

—

 

—

 

(5.0

)

A

 

(20.5

)

(6.8

)

0.2

 

—

 

—

 

(27.1

)

BBB

 

(60.8

)

(14.5

)

(1.3

)

—

 

—

 

(76.6

)

Below investment grade

 

(27.6

)

(155.2

)

(61.7

)

—

 

—

 

(244.5

)

Total mortgage-backed securities collateralized by prime loans

 

$

(82.3

)

$

(175.1

)

$

(62.2

)

$

—

 

$

—

 

$

(319.6

)

 


 

Draft       11/4/2009
Page 14

 

Invested Asset Summary - External CMBS

 

External Commercial Mortgage-backed Securities as of September 30, 2009:

 

(Dollars In Millions)

 

2005 and

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Prior

 

2006

 

2007

 

2008

 

2009

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Fair Value of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

226.0

 

$

13.9

 

$

41.9

 

$

—

 

$

—

 

$

281.8

 

BBB

 

5.9

 

—

 

—

 

—

 

—

 

5.9

 

Total external commercial mortgage-backed securities

 

$

231.9

 

$

13.9

 

$

41.9

 

$

—

 

$

—

 

$

287.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

8.9

 

$

0.2

 

$

(2.3

)

$

—

 

$

—

 

$

6.8

 

BBB

 

(1.2

)

—

 

—

 

—

 

—

 

(1.2

)

Total external commercial mortgage-backed securities

 

$

7.7

 

$

0.2

 

$

(2.3

)

$

—

 

$

—

 

$

5.6

 

 


 

Draft       11/4/2009
Page 15

 

Invested Asset Summary - ABS*

 

Asset-backed Securities* as of September 30, 2009:

 

(Dollars In Millions)

 

2005 and

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Prior

 

2006

 

2007

 

2008

 

2009

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Fair Value of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

729.0

 

$

40.3

 

$

321.2

 

$

50.2

 

$

—

 

$

1,140.7

 

AA

 

17.2

 

—

 

—

 

—

 

—

 

17.2

 

A

 

1.5

 

—

 

—

 

—

 

—

 

1.5

 

BBB

 

2.8

 

4.9

 

14.7

 

—

 

—

 

22.4

 

Below investment grade

 

—

 

0.9

 

4.8

 

—

 

—

 

5.7

 

Total asset-backed securities

 

$

750.5

 

$

46.1

 

$

340.7

 

$

50.2

 

$

—

 

$

1,187.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Unrealized Gain (Loss) of Security by Year of Security Origination

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

(10.3

)

$

0.3

 

$

(6.2

)

$

0.2

 

$

—

 

$

(16.0

)

AA

 

1.6

 

—

 

—

 

—

 

—

 

1.6

 

BBB

 

—

 

(1.6

)

(0.1

)

—

 

—

 

(1.7

)

Below investment grade

 

—

 

(0.3

)

(1.8

)

—

 

—

 

(2.1

)

Total asset-backed securities

 

$

(8.7

)

$

(1.6

)

$

(8.1

)

$

0.2

 

$

—

 

$

(18.2

)

 

* Excludes Residential and Commercial mortgage-backed securities

 


 

Draft       11/4/2009
Page 16

 

Invested Asset Summary - Other

 

(Dollars In Millions)
(Unaudited)
(Excludes Modco portfolio)

 

GAAP
Amortized
Cost

 

Market
Value

 

Unrealized
Gain / (Loss)

 

Hybrid / Preferred Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic Exposure

 

 

 

 

 

 

 

Tier 1

 

$

982.7

 

$

835.1

 

$

(147.6

)

Preferred Stock

 

136.1

 

127.6

 

(8.5

)

Total Domestic Exposure

 

$

1,118.8

 

$

962.7

 

$

(156.1

)

 

 

 

 

 

 

 

 

European Exposure

 

 

 

 

 

 

 

Upper Tier 2

 

$

8.2

 

$

6.5

 

$

(1.7

)

Tier 1

 

282.3

 

194.7

 

(87.6

)

Preferred Stock

 

64.5

 

65.2

 

0.7

 

Total European Exposure

 

$

355.0

 

$

266.4

 

$

(88.6

)

 

 

 

 

 

 

 

 

Other Foreign Exposure

 

 

 

 

 

 

 

Tier 1

 

$

66.2

 

$

60.1

 

$

(6.1

)

Preferred Stock

 

0.1

 

0.1

 

—

 

Total Other Foreign Exposure

 

$

66.3

 

$

60.2

 

$

(6.1

)

 

 

 

 

 

 

 

 

Total Domestic, European and Other Exposure

 

 

 

 

 

 

 

Upper Tier 2

 

$

8.2

 

$

6.5

 

$

(1.7

)

Tier 1

 

1,331.2

 

1,089.9

 

(241.3

)

Preferred Stock

 

200.7

 

192.9

 

(7.8

)

Total Domestic, European and Other Exposure

 

$

1,540.1

 

$

1,289.3

 

$

(250.8

)

 


Draft       11/4/2009
Page 17

 

Life Marketing Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

372,674

 

$

391,302

 

$

375,658

 

$

397,195

 

$

379,823

 

$

1,109,264

 

$

1,152,676

 

Reinsurance Ceded

 

(205,699

)

(254,723

)

(207,164

)

(241,002

)

(202,708

)

(669,303

)

(650,874

)

Net Premiums and Policy Fees

 

166,975

 

136,579

 

168,494

 

156,193

 

177,115

 

439,961

 

501,802

 

Net investment income

 

88,825

 

89,283

 

93,527

 

90,833

 

89,035

 

260,770

 

273,395

 

Other income

 

23,507

 

22,184

 

19,830

 

20,168

 

19,587

 

74,562

 

59,585

 

Total Revenues

 

279,307

 

248,046

 

281,851

 

267,194

 

285,737

 

775,293

 

834,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

212,201

 

153,115

 

195,410

 

189,101

 

215,567

 

551,840

 

600,078

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

5,009

 

35,256

 

35,728

 

33,404

 

40,142

 

59,166

 

109,274

 

Other operating expenses

 

9,875

 

7,938

 

8,203

 

7,510

 

3,484

 

27,489

 

19,197

 

Total Benefits and Expenses

 

227,085

 

196,309

 

239,341

 

230,015

 

259,193

 

638,495

 

728,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX

 

$

52,222

 

$

51,737

 

$

42,510

 

$

37,179

 

$

26,544

 

$

136,798

 

$

106,233

 

 

Life Marketing Key Data

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY PRODUCT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Traditional

 

$

23,039

 

$

22,274

 

$

23,151

 

$

26,102

 

$

25,589

 

$

76,928

 

$

74,842

 

Universal life

 

11,092

 

14,496

 

12,819

 

12,796

 

15,383

 

38,336

 

40,998

 

Variable universal life

 

1,222

 

1,162

 

642

 

854

 

912

 

4,505

 

2,408

 

Total

 

$

35,353

 

$

37,932

 

$

36,612

 

$

39,752

 

$

41,884

 

$

119,769

 

$

118,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY DISTRIBUTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brokerage general agents

 

$

20,805

 

$

20,549

 

$

21,464

 

$

25,783

 

$

26,301

 

$

68,746

 

$

73,548

 

Independent agents

 

7,403

 

7,515

 

7,280

 

7,084

 

6,923

 

25,586

 

21,287

 

Stockbrokers/banks

 

6,587

 

8,205

 

7,173

 

6,509

 

7,753

 

22,341

 

21,435

 

BOLI/other

 

558

 

1,663

 

695

 

376

 

907

 

3,096

 

1,978

 

Total

 

$

35,353

 

$

37,932

 

$

36,612

 

$

39,752

 

$

41,884

 

$

119,769

 

$

118,248

 

 


Draft       11/4/2009
Page 18

 

Annuities Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

7,885

 

$

10,013

 

$

10,985

 

$

7,406

 

$

7,416

 

$

24,525

 

$

25,807

 

Reinsurance Ceded

 

—

 

(206

)

(42

)

(42

)

(29

)

—

 

(113

)

Net Premiums and Policy Fees

 

7,885

 

9,807

 

10,943

 

7,364

 

7,387

 

24,525

 

25,694

 

Net investment income

 

89,742

 

95,516

 

102,982

 

108,588

 

113,272

 

252,035

 

324,842

 

RIGL - Derivatives

 

(10,385

)

(22,496

)

19,088

 

13,393

 

(28,864

)

(18,475

)

3,617

 

RIGL - All Other Investments

 

(14,419

)

387

 

(6,448

)

925

 

(482

)

(13,304

)

(6,005

)

Other income

 

3,366

 

3,137

 

3,380

 

4,215

 

4,737

 

9,624

 

12,332

 

Total Revenues

 

76,189

 

86,351

 

129,945

 

134,485

 

96,050

 

254,405

 

360,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

81,441

 

90,101

 

85,808

 

78,759

 

96,118

 

220,699

 

260,685

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

3,034

 

(15,558

)

45,085

 

26,568

 

(20,176

)

16,174

 

51,477

 

Other operating expenses

 

6,650

 

6,225

 

5,975

 

6,068

 

6,855

 

19,397

 

18,898

 

Total Benefits and Expenses

 

91,125

 

80,768

 

136,868

 

111,395

 

82,797

 

256,270

 

331,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX

 

(14,936

)

5,583

 

(6,923

)

23,090

 

13,253

 

(1,865

)

29,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Reconcile to Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: RIGL - Derivatives

 

(10,385

)

(22,496

)

19,088

 

13,393

 

(28,864

)

(18,475

)

3,617

 

Add back: Derivative gains related to annuities

 

(10,385

)

(22,496

)

19,088

 

13,393

 

(28,864

)

(18,475

)

3,617

 

Less: RIGL - All Other Investments

 

(14,419

)

387

 

(6,448

)

925

 

(482

)

(13,304

)

(6,005

)

Add back: Related amortization of deferred acquisition costs

 

1,073

 

979

 

(100

)

(670

)

2,340

 

1,093

 

1,570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME

 

$

556

 

$

6,175

 

$

(575

)

$

21,495

 

$

16,075

 

$

12,532

 

$

36,995

 

 

Annuities Key Data

 

 

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

 

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable Annuity

 

$

132,374

 

$

111,794

 

$

139,056

 

$

177,306

 

$

194,429

 

$

340,614

 

$

510,791

 

Immediate Annuity

 

34,727

 

47,642

 

26,043

 

17,918

 

20,498

 

302,217

 

64,459

 

Single Premium Deferred Annuity

 

58,854

 

400,638

 

151,016

 

264,326

 

165,990

 

326,213

 

581,332

 

Market Value Adjusted Annuity

 

240,639

 

411,145

 

117,305

 

150,129

 

71,447

 

654,928

 

338,881

 

Equity Indexed Annuity

 

5,565

 

4,911

 

3,316

 

—

 

212

 

12,463

 

3,528

 

Total

 

$

472,159

 

$

976,130

 

$

436,736

 

$

609,679

 

$

452,576

 

$

1,636,435

 

$

1,498,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable Annuity

 

$

(5,737

)

$

(7,056

)

$

(5,841

)

$

15,230

 

$

285

 

$

3,767

 

$

9,674

 

Fixed Annuity

 

6,293

 

13,231

 

5,266

 

6,265

 

15,790

 

8,765

 

27,321

 

Total

 

$

556

 

$

6,175

 

$

(575

)

$

21,495

 

$

16,075

 

$

12,532

 

$

36,995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT BALANCE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VA Fixed Annuity

 

$

212,011

 

$

202,395

 

$

226,707

 

$

242,491

 

$

240,899

 

 

 

 

 

VA Separate Account Annuity

 

2,265,765

 

2,098,203

 

1,786,993

 

2,128,899

 

2,554,411

 

 

 

 

 

Sub-total

 

2,477,776

 

2,300,598

 

2,013,700

 

2,371,390

 

2,795,310

 

 

 

 

 

Fixed Annuity

 

5,703,702

 

6,195,293

 

6,530,391

 

6,882,551

 

7,074,803

 

 

 

 

 

Total

 

$

8,181,478

 

$

8,495,891

 

$

8,544,091

 

$

9,253,941

 

$

9,870,113

 

 

 

 

 

 


Draft       11/4/2009
Page 19

 

Stable Value Products Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

$

88,254

 

$

83,991

 

$

63,176

 

$

57,550

 

$

54,024

 

$

244,362

 

$

174,750

 

RIGL - Derivatives

 

(3,196

)

(1,451

)

707

 

247

 

87

 

(2,622

)

1,041

 

RIGL - All Other Investments

 

8,180

 

(17,216

)

1,155

 

(647

)

(5,036

)

14,862

 

(4,528

)

Other income

 

3,000

 

6,360

 

1,526

 

340

 

0

 

3,000

 

1,866

 

Total Revenues

 

96,238

 

71,684

 

66,564

 

57,490

 

49,075

 

259,602

 

173,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

60,128

 

60,066

 

42,585

 

39,206

 

37,972

 

177,542

 

119,763

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

1,211

 

1,094

 

927

 

844

 

893

 

3,373

 

2,664

 

Other operating expenses

 

1,731

 

1,325

 

983

 

864

 

820

 

4,502

 

2,667

 

Total Benefits and Expenses

 

63,070

 

62,485

 

44,495

 

40,914

 

39,685

 

185,417

 

125,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX

 

33,168

 

9,199

 

22,069

 

16,576

 

9,390

 

74,185

 

48,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Reconcile to Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: RIGL-Derivatives

 

(3,196

)

(1,451

)

707

 

247

 

87

 

(2,622

)

1,041

 

Less: RIGL-All Other Investments

 

8,180

 

(17,216

)

1,155

 

(647

)

(5,036

)

14,862

 

(4,528

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME

 

$

28,184

 

$

27,866

 

$

20,207

 

$

16,976

 

$

14,339

 

$

61,945

 

$

51,522

 

 

Stable Value Products Key Data

 

 

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

 

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GIC

 

$

22,600

 

$

58,339

 

$

—

 

$

—

 

$

—

 

$

107,945

 

$

—

 

GFA - Direct Institutional

 

636,651

 

—

 

—

 

—

 

—

 

1,061,651

 

—

 

GFA - Registered - Institutional

 

—

 

—

 

—

 

—

 

—

 

450,000

 

—

 

GFA - Registered - Retail

 

25,719

 

—

 

—

 

—

 

—

 

290,848

 

—

 

Total

 

$

684,970

 

$

58,339

 

$

—

 

$

—

 

$

—

 

$

1,910,444

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT BALANCE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter End Balance

 

$

6,021,834

 

$

4,960,405

 

$

4,360,658

 

$

4,138,131

 

$

3,863,329

 

 

 

 

 

Average Daily Balance

 

$

5,824,533

 

$

5,666,809

 

$

4,523,563

 

$

4,224,897

 

$

4,025,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING SPREAD

 

1.70

%(1)

1.52

%(1)

1.65

%(1)

1.57

%(1)

1.42

%(1)

 

 

 

 

 

(1) Excludes one-time funding agreement retirement gains

 


Draft       11/4/2009
Page 20

 

Asset Protection Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

88,763

 

$

87,961

 

$

86,935

 

$

84,240

 

$

83,020

 

$

275,208

 

$

254,195

 

Reinsurance Ceded

 

(40,249

)

(40,229

)

(41,485

)

(37,698

)

(36,600

)

(130,646

)

(115,783

)

Net Premiums and Policy Fees

 

48,514

 

47,732

 

45,450

 

46,542

 

46,420

 

144,562

 

138,412

 

Net investment income

 

9,595

 

9,348

 

8,932

 

8,407

 

8,038

 

29,308

 

25,377

 

Other income

 

16,445

 

13,311

 

12,473

 

13,199

 

15,161

 

48,960

 

40,833

 

Total Revenues

 

74,554

 

70,391

 

66,855

 

68,148

 

69,619

 

222,830

 

204,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

28,021

 

26,288

 

34,110

 

29,363

 

31,009

 

80,449

 

94,482

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

14,154

 

13,877

 

13,683

 

14,104

 

13,446

 

43,827

 

41,233

 

Other operating expenses

 

24,193

 

24,139

 

12,782

 

20,025

 

19,433

 

73,852

 

52,240

 

Total Benefits and Expenses

 

66,368

 

64,304

 

60,575

 

63,492

 

63,888

 

198,128

 

187,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX

 

$

8,186

 

$

6,087

 

$

6,280

 

$

4,656

 

$

5,731

 

$

24,702

 

$

16,667

 

 

Asset Protection Key Data

 

 

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

 

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit insurance

 

$

15,628

 

$

10,518

 

$

8,483

 

$

8,721

 

$

10,345

 

$

56,799

 

$

27,549

 

Service contracts

 

72,483

 

53,517

 

48,076

 

56,368

 

64,865

 

226,345

 

169,309

 

Other products

 

16,126

 

12,025

 

11,781

 

11,091

 

11,026

 

51,443

 

33,898

 

Total

 

$

104,237

 

$

76,060

 

$

68,340

 

$

76,180

 

$

86,236

 

$

334,587

 

$

230,756

 

 


Draft       11/4/2009
Page 21

 

Acquisitions Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

188,377

 

$

191,053

 

$

178,676

 

$

184,484

 

$

175,521

 

$

573,385

 

$

538,681

 

Reinsurance Ceded

 

(120,785

)

(126,071

)

(109,607

)

(115,482

)

(112,325

)

(361,627

)

(337,414

)

Net Premiums and Policy Fees

 

67,592

 

64,982

 

69,069

 

69,002

 

63,196

 

211,758

 

201,267

 

Net investment income

 

132,177

 

127,156

 

123,541

 

119,515

 

118,202

 

402,872

 

361,258

 

RIGL - Derivatives

 

106,974

 

27,737

 

57,684

 

(146,462

)

(156,504

)

182,063

 

(245,282

)

RIGL - All Other Investments

 

(146,976

)

(72,964

)

(52,463

)

157,871

 

163,529

 

(233,617

)

268,937

 

Other income

 

1,605

 

1,862

 

1,403

 

1,592

 

1,519

 

4,873

 

4,514

 

Total Revenues

 

161,372

 

148,773

 

199,234

 

201,518

 

189,942

 

567,949

 

590,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

145,153

 

137,897

 

138,731

 

135,773

 

131,786

 

442,374

 

406,290

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

15,405

 

19,406

 

17,741

 

14,560

 

12,427

 

54,978

 

44,728

 

Other operating expenses

 

6,019

 

1,322

 

4,098

 

4,463

 

2,523

 

19,823

 

11,084

 

Total Benefits and Expenses

 

166,577

 

158,625

 

160,570

 

154,796

 

146,736

 

517,175

 

462,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAX

 

(5,205

)

(9,852

)

38,664

 

46,722

 

43,206

 

50,774

 

128,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Reconcile to Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: RIGL - Derivatives

 

106,974

 

27,737

 

57,684

 

(146,462

)

(156,504

)

182,063

 

(245,282

)

Less: RIGL - All Other Investments

 

(146,976

)

(72,964

)

(52,463

)

157,871

 

163,529

 

(233,617

)

268,937

 

Add back: Related amortization of deferred policy acquisition costs and value of businesses acquired

 

(1,776

)

(7

)

178

 

(272

)

(3,120

)

(1,217

)

(3,214

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME

 

$

33,021

 

$

35,368

 

$

33,621

 

$

35,041

 

$

33,061

 

$

101,111

 

$

101,723

 

 


Draft       11/4/2009
Page 22

 

Corporate & Other Quarterly Trends

 

(Dollars In Thousands)

 

3RD QTR

 

4TH QTR

 

1ST QTR

 

2ND QTR

 

3RD QTR

 

9 MOS

 

(Unaudited)

 

2008

 

2008

 

2009

 

2009

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Premiums and Policy Fees

 

$

6,765

 

$

6,483

 

$

6,898

 

$

6,664

 

$

6,717

 

$

23,359

 

$

20,279

 

Reinsurance Ceded

 

(1

)

(1

)

(1

)

(1

)

(2

)

(4

)

(4

)

Net Premiums and Policy Fees

 

6,764

 

6,482

 

6,897

 

6,663

 

6,715

 

23,355

 

20,275

 

Net investment income

 

14,929

 

(1,058

)

29,527

 

46,251

 

27,385

 

81,581

 

103,163

 

RIGL - Derivatives

 

(1,402

)

(42,554

)

14,954

 

34,832

 

(10,259

)

(5,545

)

39,527

 

RIGL - All Other Investments

 

(197,887

)

(3,141

)

(73,913

)

(31,322

)

(23,403

)

(259,499

)

(128,638

)

Other income

 

20

 

203

 

51

 

72

 

218

 

416

 

341

 

Total Revenues

 

(177,576

)

(40,068

)

(22,484

)

56,496

 

656

 

(159,692

)

34,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS & EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and settlement expenses

 

8,895

 

8,215

 

7,715

 

5,946

 

8,766

 

27,955

 

22,427

 

Amortization of deferred policy acquisition costs and value of businesses acquired

 

518

 

516

 

484

 

469

 

508

 

1,633

 

1,461

 

Other operating expenses

 

46,388

 

40,212

 

39,761

 

38,086

 

47,870

 

144,188

 

125,717

 

Total Benefits and Expenses

 

55,801

 

48,943

 

47,960

 

44,501

 

57,144

 

173,776

 

149,605

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAX

 

(233,377

)

(89,011

)

(70,444

)

11,995

 

(56,488

)

(333,468

)

(114,937

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to Reconcile to Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: RIGL-Derivatives

 

(1,402

)

(42,554

)

14,954

 

34,832

 

(10,259

)

(5,545

)

39,527

 

Less: RIGL-All Other Investments, net of participating income

 

(197,887

)

(3,141

)

(73,913

)

(31,322

)

(23,403

)

(259,499

)

(128,638

)

Add back: Derivative gains related to corporate debt and investments

 

1,915

 

1,569

 

2,238

 

1,163

 

0

 

4,185

 

3,401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRE-TAX OPERATING INCOME (LOSS)

 

$

(32,173

)

$

(41,747

)

$

(9,247

)

$

9,648

 

$

(22,826

)

$

(64,239

)

$

(22,425

)