PROTECTIVE LIFE CORP - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - 8-K - PROTECTIVE LIFE CORP	a12-4591_18k.htm
EX-99.1 - EX-99.1 - PROTECTIVE LIFE CORP	a12-4591_1ex99d1.htm

Exhibit 99.2

Draft 2/9/2012

Supplemental Schedules

Fourth Quarter 2011

Draft 2/9/2012

Page 1

Quarterly Financial Highlights

(Dollars In Thousands)	4TH QTR			1ST QTR		2ND QTR		3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011		2011		2011			2011			2010			2011

Pre-tax Operating Income (Loss) *

Life Marketing	$	40,169		$	26,239	$	33,704	$	20,321		$	36,010		$	147,470		$	116,274
Acquisitions	21,718			32,391		39,429		44,028			41,545			111,143			157,393
Annuities	12,405			13,085		24,375		43,784			29,482			53,901			110,726
Stable Value Products	8,862			9,195		19,142		14,217			14,226			39,207			56,780
Asset Protection	5,060			6,542		5,530		6,019			6,571			29,897			24,662
Corporate & Other	(9,703		)	10,021		3,977		(3,815		)	(4,416		)	(25,053		)	5,767
Total Pre-tax Operating Income	$	78,511		$	97,473	$	126,157	$	124,554		$	123,418		$	356,565		$	471,602

Balance Sheet Data

Total GAAP Assets	$	47,562,786		$	48,295,466	$	50,987,849	$	52,023,403		$	52,935,727
Total Protective Life Corporation’s Shareowners’ Equity	$	3,331,087		$	3,417,209	$	3,605,238	$	4,082,235		$	4,220,465
Total Protective Life Corporation’s Shareowners’ Equity (excluding accumulated other comprehensive income (loss))**	$	3,037,833		$	3,097,855	$	3,154,309	$	3,197,783		$	3,254,246

Stock Data

Closing Price	$	26.64		$	26.55	$	23.13	$	15.63		$	22.56
Average Shares Outstanding
Basic	86,600,622			86,603,228		86,346,216		84,722,232			83,205,456			86,567,069			85,208,612
Diluted	87,781,602			87,820,085		87,653,731		86,004,571			84,464,572			87,675,857			86,475,229

* “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” may be compared.

See Page 6 for a reconciliation of “Pre-tax Operating Income” to “Income (loss) Before Income Tax”.

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

See Page 5 for a reconciliation of “Total Protective Life Corporation’s Shareowners’ equity excluding accumulated other comprehensive income (loss)” to “Total Protective Life Corporation’s Shareowners’ equity”.

Draft 2/9/2012

Page 2

Financial Strength Ratings as of December 31, 2011

	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-	—	—	—

Draft 2/9/2012

Page 3

GAAP Consolidated Statements of Income

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	677,116		$	666,343		$	716,586		$	696,978		$	720,233		$	2,625,394		$	2,800,140
Reinsurance Ceded	(388,742		)	(331,808		)	(364,248		)	(326,967		)	(371,652		)	(1,408,340		)	(1,394,675		)
Net Premiums and Policy Fees	288,374			334,535			352,338			370,011			348,581			1,217,054			1,405,465
Net investment income	419,631			444,213			448,785			462,926			464,719			1,683,676			1,820,643
RIGL - Derivatives	98,745			(12,686		)	(34,993		)	(97,816		)	(9,756		)	(138,249		)	(155,251		)
RIGL - All Other Investments	(72,024		)	4,472			58,917			138,230			33,296			154,366			234,915

OTTI losses	(3,904		)	(16,021		)	(15,632		)	(6,259		)	(24,420		)	(75,341		)	(62,332		)
Portion recognized in OCI (before taxes)	(1,324		)	10,358			6,145			(3,570		)	1,957			33,831			14,890
Net OTTI losses recognized in earnings	(5,228		)	(5,663		)	(9,487		)	(9,829		)	(22,463		)	(41,510		)	(47,442		)
Other income	61,284			72,209			87,224			75,859			72,520			222,418			307,812
Total Revenues	790,782			837,080			902,784			939,381			886,897			3,097,755			3,566,142

BENEFITS & EXPENSES
Benefits and settlement expenses	507,196			536,369			551,553			592,792			552,759			2,089,429			2,233,473
Amortization of deferred policy acquisition costs and value of business acquired	62,961			74,363			79,688			83,782			78,090			209,722			315,923
Other operating expenses	65,356			82,702			88,268			91,553			87,650			258,333			350,173
Interest expense - subsidiaries	6,244			6,666			7,108			7,168			7,081			19,658			28,023
Interest expense - holding company - other debt	23,494			23,484			23,493			23,482			23,335			94,145			93,794
Interest expense - holding company - hybrid securities	9,401			9,401			9,401			9,401			9,401			37,605			37,604
Total Benefits and Expenses	674,652			732,985			759,511			808,178			758,316			2,708,892			3,058,990

INCOME BEFORE INCOME TAX	116,130			104,095			143,273			131,203			128,581			388,863			507,152
Income tax expense	37,655			36,629			49,909			42,589			38,710			129,067			167,837
NET INCOME	78,475			67,466			93,364			88,614			89,871			259,796			339,315
Less: Net Income (loss) attributable to noncontrolling interests	(168		)	(51		)	296			—			—			(445		)	245
NET INCOME AVAILABLE TO PLC’S COMMON SHAREOWNERS	$	78,643		$	67,517		$	93,068		$	88,614		$	89,871		$	260,241		$	339,070

PER SHARE DATA FOR QUARTER
Operating income-diluted *	$	0.62		$	0.72		$	0.94		$	0.98		$	1.02
RIGL - Derivatives net of gains related to corp debt, investments and annuities	0.87			0.07			(0.24		)	(0.92		)	(0.03		)
RIGL - All Other Investments	(0.59		)	(0.02		)	0.36			0.97			0.07
Net income available to PLC’s common shareowners-diluted	$	0.90		$	0.77		$	1.06		$	1.03		$	1.06
Average shares outstanding-diluted	87,781,602			87,820,085			87,653,731			86,004,571			84,464,572
Dividends paid	$	0.14		$	0.14		$	0.16		$	0.16		$	0.16

PER SHARE DATA FOR YTD
Operating income-diluted *	$	2.73		$	0.72		$	1.66		$	2.64		$	3.65
RIGL - Derivatives net of gains related to corp debt, investments and annuities	(0.56		)	0.07			(0.18		)	(1.08		)	(1.12		)
RIGL - All Other Investments	0.80			(0.02		)	0.35			1.30			1.39
Net income available to PLC’s common shareowners-diluted	$	2.97		$	0.77		$	1.83		$	2.86		$	3.92
Average shares outstanding-diluted	87,675,857			87,820,085			87,736,449			87,152,812			86,475,229
Dividends paid	$	0.54		$	0.14		$	0.30		$	0.46		$	0.62

* “Operating Income” is a non-GAAP financial measure. “Net income available to PLC’s common shareowners” is a GAAP financial measure to which “Operating Income” may be compared.

Draft 2/9/2012

Page 4

GAAP Consolidated Balance Sheets

(Dollars In Thousands)	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
(Unaudited)	2010		2011		2011		2011		2011
ASSETS

Fixed maturities	$	24,676,939	$	24,676,049	$	26,133,625	$	27,855,004	$	27,983,446
Equity securities	359,412		352,927		349,738		327,802		335,232
Mortgage loans	4,892,829		4,873,678		5,349,851		5,377,977		5,353,481
Investment real estate	25,340		21,884		23,737		27,495		29,899
Policy loans	793,448		784,320		881,757		880,203		879,819
Other long-term investments	276,337		276,291		297,825		284,550		257,714
Long-term investments	31,024,305		30,985,149		33,036,533		34,753,031		34,839,591
Short-term investments	352,824		406,676		134,698		80,387		101,489
Total investments	31,377,129		31,391,825		33,171,231		34,833,418		34,941,080
Cash	264,425		230,938		419,210		332,487		267,298
Accrued investment income	329,078		343,181		345,906		363,548		350,580
Accounts and premiums receivable	58,580		63,547		68,559		60,008		84,754
Reinsurance receivable	5,608,029		5,659,191		5,730,025		5,645,080		5,645,471
Deferred policy acquisition costs and value of business acquired	3,851,743		3,885,016		4,028,452		4,000,099		4,036,757
Goodwill	114,758		113,983		113,209		112,434		111,659
Property and equipment, net	39,386		42,585		43,142		45,997		48,578
Other assets	169,664		176,778		180,602		201,516		150,549
Current/Deferred income tax	45,582		29,422		39,936		11,142		54,425
Assets related to separate accounts
Variable annuity	5,170,193		5,797,956		6,291,158		5,947,391		6,741,959
Variable universal life	534,219		561,044		556,419		470,283		502,617

TOTAL ASSETS	$	47,562,786	$	48,295,466	$	50,987,849	$	52,023,403	$	52,935,727

Draft 2/9/2012

Page 5

GAAP Consolidated Balance Sheets - Continued

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR
(Unaudited)	2010			2011			2011			2011			2011

LIABILITIES
Policy liabilities and accruals
Future policy benefits and claims	$	18,530,564		$	18,727,050		$	20,619,144		$	20,665,267		$	20,867,989
Unearned premiums	1,182,828			1,201,591			1,225,066			1,244,457			1,258,785
Stable value product deposits	3,076,233			2,664,139			2,565,235			2,827,862			2,769,510
Annuity deposits	10,591,605			10,781,341			10,899,995			10,975,016			10,946,848
Other policyholders’ funds	578,037			557,378			589,879			575,056			546,516
Reverse repurchase borrowings	—			—			—			157,103			—
Other liabilities	926,201			975,974			964,392			1,196,554			1,065,451
Mortgage loan backed certificates	61,678			51,540			42,862			32,471			19,755
Deferred income taxes	1,022,130			1,054,984			1,171,305			1,415,904			1,544,039
Non-recourse funding obligations	532,400			496,700			438,300			414,800			407,800
Debt	1,501,852			1,484,852			1,494,852			1,495,000			1,520,000
Subordinated debt securities	524,743			524,743			524,743			524,743			524,743
Liabilities related to separate accounts
Variable annuity	5,170,193			5,797,956			6,291,158			5,947,391			6,741,959
Variable universal life	534,219			561,044			556,419			470,283			502,617
TOTAL LIABILITIES	44,232,683			44,879,292			47,383,350			47,941,907			48,716,012

SHAREOWNERS’ EQUITY
Common stock	44,388			44,388			44,388			44,388			44,388
Additional paid-in-capital	586,592			590,783			592,451			594,084			598,106
Treasury stock	(26,072		)	(25,763		)	(50,326		)	(83,549		)	(107,740		)
Retained earnings	2,432,925			2,488,447			2,567,796			2,642,860			2,719,492
Accumulated other comprehensive income (loss)	293,254			319,354			450,929			884,452			966,219
TOTAL PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY	3,331,087			3,417,209			3,605,238			4,082,235			4,220,465
Noncontrolling interest	(984		)	(1,035		)	(739		)	(739		)	(750		)
TOTAL EQUITY	3,330,103			3,416,174			3,604,499			4,081,496			4,219,715
TOTAL LIABILITIES AND SHAREOWNERS’ EQUITY	$	47,562,786		$	48,295,466		$	50,987,849		$	52,023,403		$	52,935,727

PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY PER SHARE
Total Protective Life Corporation’s Shareowners’ Equity	$	38.88		$	39.87		$	42.59		$	49.30		$	51.68
Less: Accumulated other comprehensive income (loss)	3.42			3.72			5.33			10.69			11.83
Excluding accumulated other comprehensive income (loss)*	$	35.46		$	36.15		$	37.26		$	38.61		$	39.85

Total Protective Life Corporation’s Shareowners’ Equity	$	3,331,087		$	3,417,209		$	3,605,238		$	4,082,235		$	4,220,465
Less: Accumulated other comprehensive income (loss)	293,254			319,354			450,929			884,452			966,219
Total Protective Life Corporation’s Shareowners’ Equity (excluding accumulated other comprehensive income (loss)) *	$	3,037,833		$	3,097,855		$	3,154,309		$	3,197,783		$	3,254,246

Common shares outstanding	85,667,977			85,705,659			84,650,243			82,812,088			81,669,195
Treasury Stock shares	3,108,983			3,071,301			4,126,717			5,964,872			7,107,765

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

Draft 2/9/2012

Page 6

Calculation of Operating Earnings Per Share

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

CALCULATION OF NET INCOME PER SHARE

Net income available to PLC’s common shareowners	$	78,643		$	67,517		$	93,068		$	88,614		$	89,871		$	260,241		$	339,070

Average shares outstanding-basic	86,600,622			86,603,228			86,346,216			84,722,232			83,205,456			86,567,069			85,208,612
Average shares outstanding-diluted	87,781,602			87,820,085			87,653,731			86,004,571			84,464,572			87,675,857			86,475,229

Net income available to PLC’s common shareowners per share-basic	$	0.91		$	0.78		$	1.08		$	1.05		$	1.08		$	3.01		$	3.98
Net income available to PLC’s common shareowners per share-diluted	$	0.90		$	0.77		$	1.06		$	1.03		$	1.06		$	2.97		$	3.92

Income from continuing operations	$	78,643		$	67,517		$	93,068		$	88,614		$	89,871		$	260,241		$	339,070

EPS (basic)	$	0.91		$	0.78		$	1.08		$	1.05		$	1.08		$	3.01		$	3.98
EPS (diluted)	$	0.90		$	0.77		$	1.06		$	1.03		$	1.06		$	2.97		$	3.92

CALCULATION OF REALIZED INVESTMENT GAINS (LOSSES) PER SHARE

RIGL - Derivatives	$	98,745		$	(12,686	)	$	(34,993	)	$	(97,816	)	$	(9,756	)	$	(138,249	)	$	(155,251	)
Derivative activity related to Corporate Debt and Investments	(42		)	—			—			—			—			(168		)	—
Derivative activity related to Annuities	19,329			21,483			2,196			(23,435		)	5,579			63,445			5,823
RIGL - All Other Investments	(77,252		)	(1,191		)	49,430			128,401			10,833			112,856			187,473
Related amortization of DAC & VOBA	(2,993		)	(933		)	187			(501		)	(1,493		)	(5,141		)	(2,740		)
	37,787			6,673			16,820			6,649			5,163			32,743			35,305
Tax effect	(13,226		)	(2,336		)	(5,887		)	(2,327		)	(1,807		)	(11,461		)	(12,357		)
	$	24,561		$	4,337		$	10,933		$	4,322		$	3,356		$	21,282		$	22,948

RIGL - Derivatives per share-diluted	$	0.87		$	0.07		$	(0.24	)	$	(0.92	)	$	(0.03	)	$	(0.56	)	$	(1.12	)
RIGL - All Other Investments per share-diluted	$	(0.59	)	$	(0.02	)	$	0.36		$	0.97		$	0.07		$	0.80		$	1.39

OPERATING INCOME PER SHARE *

Net income available to PLC’s common shareowners per share-diluted	$	0.90		$	0.77		$	1.06		$	1.03		$	1.06		$	2.97		$	3.92
Less: RIGL - Derivatives per share-diluted	0.87			0.07			(0.24		)	(0.92		)	(0.03		)	(0.56		)	(1.12		)
Less: RIGL - All Other Investments per share-diluted	(0.59		)	(0.02		)	0.36			0.97			0.07			0.80			1.39
Operating income per share-diluted	$	0.62		$	0.72		$	0.94		$	0.98		$	1.02		$	2.73		$	3.65

NET OPERATING INCOME *

Net income available to PLC’s common shareowners	$	78,643		$	67,517		$	93,068		$	88,614		$	89,871		$	260,241		$	339,070
Less: RIGL - Derivatives net of tax & gains related to corp debt, investments & annuities	76,721			5,718			(21,318		)	(78,813		)	(2,715		)	(48,731		)	(97,128		)
Less: RIGL - All Other Investments net of tax and amortization	(52,159		)	(1,381		)	32,251			83,135			6,071			70,016			120,076
Net operating income	$	54,081		$	63,180		$	82,135		$	84,292		$	86,515		$	238,956		$	316,122

PRE-TAX OPERATING INCOME **

Income before income tax and discontinued operations	$	116,130		$	104,095		$	143,273		$	131,203		$	128,581		$	388,863		$	507,152
Less: RIGL - Derivatives	98,745			(12,686		)	(34,993		)	(97,816		)	(9,756		)	(138,249		)	(155,251		)
Less: Derivative activity related to corporate debt, investments & annuities ***	19,287			21,483			2,196			(23,435		)	5,579			63,277			5,823
Less: RIGL - All Other Investments	(77,252		)	(1,191		)	49,430			128,401			10,833			112,856			187,473
Less: Related amortization of DAC & VOBA	(2,993		)	(933		)	187			(501		)	(1,493		)	(5,141		)	(2,740		)
Less: Minority Interest	(168		)	(51		)	296			—			—			(445		)	245
Pre-tax operating income	$	78,511		$	97,473		$	126,157		$	124,554		$	123,418		$	356,565		$	471,602

* “Net Operating Income” and “Operating Income Per Share” are non-GAAP financial measures. “Net Income available to PLC’s common shareowners” and “Net Income available to PLC’s common shareowners Per Share” are GAAP financial measures to which “Net Operating Income” and “Operating Income Per Share” may be compared.

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

*** Includes derivative (gains) / losses

Draft 2/9/2012

Page 7

Invested Asset Summary

(Dollars In Millions)	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
(Unaudited)	2010		2011		2011		2011		2011

Total Portfolio

Fixed Maturities	$	24,676.9	$	24,676.0	$	26,133.6	$	27,855.0	$	27,983.5	80	%
Mortgage Loans	4,892.8		4,873.7		5,349.9		5,378.0		5,353.5		15	%
Investment Real Estate	25.4		21.9		23.7		27.5		29.9		0	%
Equity Securities	359.4		352.9		349.7		327.8		335.2		1	%
Policy Loans	793.5		784.3		881.8		880.2		879.8		3	%
Short-Term Investments	352.8		406.7		134.7		80.4		101.5		0	%
Other Long-Term Investments	276.3		276.3		297.8		284.5		257.7		1	%
Total Invested Assets	$	31,377.1	$	31,391.8	$	33,171.2	$	34,833.4	$	34,941.1	100	%

Draft 2/9/2012

Page 8

Invested Asset Summary - Fixed Income

(Dollars In Millions)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR
(Unaudited)	2010			2011			2011			2011			2011

Fixed Income

Corporate Bonds	$	17,433.7		$	17,638.5		$	18,741.8		$	19,856.5		$	20,148.4		72	%
Residential Mortgage-Backed Securities	2,915.1			2,633.8			2,702.2			2,827.2			2,656.1			9	%
Commercial Mortgage-Backed Securities	312.6			316.4			452.6			640.3			741.8			3	%
Other Asset-Backed Securities	991.7			1,062.1			1,029.1			953.7			971.0			3	%
U.S. Government-related Securities	1,557.5			1,607.7			1,577.2			1,813.4			1,771.5			6	%
Other Government-related Securities	327.8			262.2			232.5			192.0			137.9			1	%
States, Municipals and Political Subdivisions	1,138.5			1,155.3			1,398.2			1,571.9			1,556.8			6	%
Total Fixed Income Portfolio	$	24,676.9		$	24,676.0		$	26,133.6		$	27,855.0		$	27,983.5		100	%

Fixed Income - Quality

AAA	17.2		%	16.9		%	17.3		%	17.6		%	16.5		%
AA	6.3		%	6.5		%	6.8		%	7.9		%	8.0		%
A	21.3		%	21.8		%	25.2		%	26.7		%	27.5		%
BBB	44.5		%	45.1		%	42.5		%	40.4		%	41.0		%
Below investment grade	10.7		%	9.7		%	8.2		%	7.4		%	7.0		%
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Note: Prior period ratings and investment classifications have been restated to be consistent with current quarter presentation.

Draft 2/9/2012

Page 9

Fixed Maturities by NAIC Rating

STAT Carry Value % of Total

	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
(Unaudited)	2010		2011		2011		2011		2011

NAIC Rating
1	52.63	%	52.50	%	55.32	%	57.10	%	56.07	%
2	41.80	%	42.31	%	40.33	%	38.61	%	38.92	%
3	2.83	%	2.79	%	2.31	%	2.28	%	2.80	%
4	1.52	%	1.18	%	1.01	%	1.11	%	1.31	%
5	1.04	%	0.72	%	0.87	%	0.75	%	0.73	%
6	0.18	%	0.50	%	0.16	%	0.15	%	0.17	%

	100.00	%	100.00	%	100.00	%	100.00	%	100.00	%

Below investment grade (using NAIC 3-6)	5.57	%	5.19	%	4.35	%	4.29	%	5.01	%

Note: NAIC Ratings reflect statutory carrying values

Draft 2/9/2012

Page 10

Invested Asset Summary - Mortgages

(Dollars In Millions)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR
(Unaudited)	2010			2011			2011			2011			2011

Mortgage Loans - Type

Retail	66.2		%	66.6		%	64.4		%	65.4		%	65.7		%
Apartments	12.2		%	11.9		%	11.4		%	11.0		%	11.3		%
Office Buildings	12.7		%	12.6		%	14.1		%	13.7		%	13.4		%
Warehouses	7.0		%	6.9		%	8.0		%	7.7		%	7.6		%
Miscellaneous	1.9		%	2.0		%	2.1		%	2.2		%	2.0		%
	100.0		%	100.0		%	100.0		%	100.0		%	100.0		%

Delinquent Loans & Foreclosed Properties

60 Days Past Due	$	—		$	—		$	10.3		$	6.9		$	2.4
90 Days Past Due	12.7			12.5			15.7			16.2			12.5
Renegotiated Loans(1)	16.1			16.1			16.1			16.1			16.1
Foreclosed Real Estate	4.8			1.6			1.7			5.5			10.4
	$	33.6		$	30.2		$	43.8		$	44.7		$	41.4

% of Commercial Mortgage Loan Portfolio

0.7

0.6

0.8

(1) Loans being restructured under the terms of a pooling and servicing agreement.

Draft 2/9/2012

Page 11

Invested Asset Summary - Trading Portfolios

(Dollars In Millions)	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
(Unaudited)	2010		2011		2011		2011		2011

Trading Portfolio Composition (excl. Modco Trading Portfolio)

Rating
AAA	$	10.7	$	7.9	$	3.0	$	2.6	$	2.2
AA	1.0		0.7		—		—		—
A	—		—		—		—		—
BBB	46.3		13.2		6.0		—		—
Below investment grade	61.4		48.1		20.7		23.8		21.0
Total	$	119.4	$	69.9	$	29.7	$	26.4	$	23.2

Modco Trading Portfolio

Rating
AAA	$	824.5	$	789.0	$	768.0	$	871.5	$	845.5
AA	276.9		296.8		316.5		325.2		267.4
A	576.8		589.2		693.1		654.5		702.9
BBB	932.2		871.4		869.4		888.8		909.3
Below investment grade	246.1		233.1		210.1		231.9		211.7
Short-term investments	114.3		155.4		102.2		67.6		85.8
Total	$	2,970.8	$	2,934.9	$	2,959.3	$	3,039.5	$	3,022.6

Note: Prior period ratings have been restated to be consistent with current quarter presentation.

Draft 2/9/2012

Page 12

Invested Asset Summary - MBS - Alt-A

Mortgage-backed Securities Collateralized by Alt-A Mortgage Loans as of December 31, 2011:

(Dollars In Millions)	2007 and
(Unaudited)	Prior			2008		2009		2010		2011		Total

Estimated Fair Value of Security by Year of Security Origination

Rating
A	$	3.6		$	—	$	—	$	—	$	—	$	3.6
BBB	6.8			—		—		—		—		6.8
Below investment grade	344.4			—		—		—		—		344.4
Total mortgage-backed securities collateralized by Alt-A mortgage loans	$	354.8		$	—	$	—	$	—	$	—	$	354.8

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

Rating
A	$	—		$	—	$	—	$	—	$	—	$	—
BBB	0.6			—		—		—		—		0.6
Below investment grade	(66.5		)	—		—		—		—		(66.5		)
Total mortgage-backed securities collateralized by Alt-A mortgage loans	$	(65.9	)	$	—	$	—	$	—	$	—	$	(65.9	)

Draft 2/9/2012

Page 13

Invested Asset Summary - MBS - Prime

Mortgage-backed Securities Collateralized by Prime Loans as of December 31, 2011:

(Dollars In Millions)	2007 and
(Unaudited)	Prior			2008		2009		2010		2011		Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	708.4		$	—	$	85.9	$	406.3	$	306.0	$	1,506.6
AA	9.9			—		—		—		—		9.9
A	66.3			—		—		—		—		66.3
BBB	24.4			—		—		—		—		24.4
Below investment grade	694.0			—		—		—		—		694.0
Total mortgage-backed securities collateralized by prime loans	$	1,503.0		$	—	$	85.9	$	406.3	$	306.0	$	2,301.2

Includes $1.4 million of agency mortgage backed securities.

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

Rating
AAA	$	45.2		$	—	$	8.0	$	16.6	$	15.3	$	85.1
AA	0.3			—		—		—		—		0.3
A	0.4			—		—		—		—		0.4
BBB	(0.4		)	—		—		—		—		(0.4		)
Below investment grade	(31.6		)	—		—		—		—		(31.6		)
Total mortgage-backed securities collateralized by prime loans	$	13.9		$	—	$	8.0	$	16.6	$	15.3	$	53.8

Draft 2/9/2012

Page 14

Invested Asset Summary - CMBS

Commercial Mortgage-backed Securities as of December 31, 2011:

(Dollars In Millions)	2007 and
(Unaudited)	Prior			2008		2009		2010			2011			Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	156.4		$	45.9	$	—	$	86.6		$	228.4		$	517.3
AA	7.3			—		—		29.5			29.3			66.1
A	39.2			—		5.9		34.7			78.6			158.4
Total commercial mortgage-backed securities	$	202.9		$	45.9	$	5.9	$	150.8		$	336.3		$	741.8

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

Rating
AAA	$	3.3		$	1.8	$	—	$	5.9		$	12.9		$	23.9
AA	(0.4		)	—		—		(1.7		)	(0.5		)	(2.6		)
A	1.7			—		0.2		2.1			—			4.0
Total commercial mortgage-backed securities	$	4.6		$	1.8	$	0.2	$	6.3		$	12.4		$	25.3

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Page 15

Invested Asset Summary - ABS*

Other Asset-backed Securities* as of December 31, 2011:

(Dollars In Millions)	2007 and
(Unaudited)	Prior			2008		2009		2010		2011		Total

Estimated Fair Value of Security by Year of Security Origination

Rating
AAA	$	633.4		$	—	$	22.7	$	32.0	$	12.2	$	700.3
AA	114.7			—		—		—		—		114.7
A	6.8			—		—		—		86.2		93.0
BBB	5.6			—		—		—		—		5.6
Below investment grade	57.4			—		—		—		—		57.4
Total other asset-backed securities	$	817.9		$	—	$	22.7	$	32.0	$	98.4	$	971.0

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

Rating
AAA	$	(25.4	)	$	—	$	—	$	—	$	0.1	$	(25.3	)
AA	(10.5		)	—		—		—		—		(10.5		)
A	(0.3		)	—		—		—		2.3		2.0
BBB	—			—		—		—		—		—
Below investment grade	(50.2		)	—		—		—		—		(50.2		)
Total other asset-backed securities	$	(86.4	)	$	—	$	—	$	—	$	2.4	$	(84.0	)

* Excludes Residential and Commercial mortgage-backed securities

Draft 2/9/2012

Page 16

Life Marketing Quarterly Trends

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	414,729		$	393,665		$	406,566		$	383,293		$	408,057		$	1,575,764		$	1,591,581
Reinsurance Ceded	(244,340		)	(198,086		)	(219,292		)	(191,498		)	(237,886		)	(839,512		)	(846,762		)
Net Premiums and Policy Fees	170,389			195,579			187,274			191,795			170,171			736,252			744,819
Net investment income	105,177			106,627			110,230			112,396			116,922			388,061			446,175
Other income	26,708			28,131			28,923			27,048			26,205			95,079			110,307
Total Revenues	302,274			330,337			326,427			331,239			313,298			1,219,392			1,301,301

BENEFITS & EXPENSES
Benefits and settlement expenses	224,000			245,162			236,439			269,996			226,501			921,765			978,098
Amortization of deferred policy acquisition costs and value of business acquired	25,221			35,569			31,989			20,291			33,035			91,363			120,884
Other operating expenses	12,884			23,367			24,295			20,631			17,752			58,794			86,045
Total Benefits and Expenses	262,105			304,098			292,723			310,918			277,288			1,071,922			1,185,027

INCOME BEFORE INCOME TAX	$	40,169		$	26,239		$	33,704		$	20,321		$	36,010		$	147,470		$	116,274

Life Marketing Key Data

(Dollars In Thousands)	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR		12 MOS
(Unaudited)	2010		2011		2011		2011		2011		2010		2011

SALES BY PRODUCT
Traditional	$	3,419	$	1,863	$	1,305	$	516	$	162	$	50,101	$	3,846
Universal life	39,039		35,945		32,988		25,670		23,344		113,168		117,947
Bank-owned life insurance	3,197		4,661		3,460		1,520		1,722		8,098		11,363
Total	$	45,655	$	42,469	$	37,753	$	27,706	$	25,228	$	171,367	$	133,156

SALES BY DISTRIBUTION
Brokerage general agents	$	24,550	$	24,520	$	21,183	$	14,607	$	10,642	$	101,588	$	70,952
Independent agents	6,524		4,723		4,507		3,865		3,052		24,838		16,147
Stockbrokers/banks	11,206		8,343		8,427		6,907		8,000		36,633		31,677
BOLI/other	3,375		4,883		3,636		2,327		3,534		8,308		14,380
Total	$	45,655	$	42,469	$	37,753	$	27,706	$	25,228	$	171,367	$	133,156

Draft 2/9/2012

Page 17

Annuities Quarterly Trends

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	13,125		$	14,923		$	16,709		$	17,670		$	19,083		$	42,786		$	68,385
Reinsurance Ceded	(20		)	(21		)	(17		)	(16		)	(12		)	(136		)	(66		)
Net Premiums and Policy Fees	13,105			14,902			16,692			17,654			19,071			42,650			68,319
Net investment income	124,686			124,356			128,202			127,095			127,577			482,264			507,230
RIGL - Derivatives	(19,329		)	(21,483		)	(2,196		)	23,435			(5,579		)	(63,445		)	(5,823		)
RIGL - All Other Investments	6,987			999			(2,215		)	501			10,176			10,175			9,461
Other income	9,603			11,358			13,119			14,516			16,167			30,592			55,160
Total Revenues	135,052			130,132			153,602			183,201			167,412			502,236			634,347

BENEFITS & EXPENSES
Benefits and settlement expenses	100,657			96,247			99,856			93,438			101,247			407,455			390,788
Amortization of deferred policy acquisition costs and value of business acquired	6,080			7,072			18,161			31,713			14,114			(3,182		)	71,060
Other operating expenses	10,528			12,963			13,068			13,901			14,246			36,770			54,178
Total Benefits and Expenses	117,265			116,282			131,085			139,052			129,607			441,043			516,026

INCOME BEFORE INCOME TAX	17,787			13,850			22,517			44,149			37,805			61,193			118,321

Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives	(19,329		)	(21,483		)	(2,196		)	23,435			(5,579		)	(63,445		)	(5,823		)
Add back: Derivative activity related to annuities	(19,329		)	(21,483		)	(2,196		)	23,435			(5,579		)	(63,445		)	(5,823		)
Less: RIGL - All Other Investments	6,987			999			(2,215		)	501			10,176			10,175			9,461
Add back: Amortization related to benefit and settlement expenses	—			5			12			174			44			—			235
Add back: Related amortization of DAC	1,605			229			(369		)	(38		)	1,809			2,883			1,631

PRE-TAX OPERATING INCOME	$	12,405		$	13,085		$	24,375		$	43,784		$	29,482		$	53,901		$	110,726

Annuities Key Data

	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR		12 MOS
	2010		2011		2011		2011		2011		2010		2011

SALES
Variable Annuity	$	515,678	$	607,795	$	669,021	$	573,166	$	498,617	$	1,714,753	$	2,348,599
Immediate Annuity	20,801		19,194		14,200		18,160		14,696		64,367		66,250
Single Premium Deferred Annuity	120,135		246,942		212,323		255,715		173,420		760,555		888,400
Market Value Adjusted Annuity	5,045		42,950		18,989		12,671		2,595		104,766		77,205
Equity Indexed Annuity	100		178		291		79		179		606		727
Total	$	661,759	$	917,059	$	914,824	$	859,791	$	689,507	$	2,645,047	$	3,381,181

PRE-TAX OPERATING INCOME
Variable Annuity	$	2,487	$	60	$	12,168	$	10,153	$	18,764	$	15,227	$	41,145
Fixed Annuity	9,918		13,025		12,207		33,631		10,718		38,674		69,581
Total	$	12,405	$	13,085	$	24,375	$	43,784	$	29,482	$	53,901	$	110,726

DEPOSIT BALANCE
VA Fixed Annuity	$	451,918	$	493,686	$	541,252	$	533,211	$	510,567
VA Separate Account Annuity	4,429,084		5,058,135		5,579,541		5,367,490		6,140,365
Sub-total	4,881,002		5,551,821		6,120,793		5,900,701		6,650,932
Fixed Annuity	7,758,905		7,931,246		8,035,741		8,125,616		8,152,841
Total	$	12,639,907	$	13,483,067	$	14,156,534	$	14,026,317	$	14,803,773

Draft 2/9/2012

Page 18

Stable Value Products Quarterly Trends

(Dollars In Thousands)	4TH QTR		1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010		2011			2011			2011			2011			2010			2011

REVENUES
Net investment income	$	38,083	$	36,104		$	39,376		$	35,173		$	34,497		$	171,327		$	145,150
RIGL - Derivatives	427		645			(617		)	(485		)	98			117			(359		)
RIGL - All Other Investments	2,113		7,967			7,661			10,471			(774		)	(3,561		)	25,325
Other income	—		(1		)	1			(1		)	—			—			(1		)
Total Revenues	40,623		44,715			46,421			45,158			33,821			167,883			170,115

BENEFITS & EXPENSES
Benefits and settlement expenses	26,220		22,790			19,381			19,641			19,444			123,365			81,256
Amortization of deferred policy acquisition costs and value of business acquired	2,171		3,547			286			502			221			5,430			4,556
Other operating expenses	830		571			568			812			606			3,325			2,557
Total Benefits and Expenses	29,221		26,908			20,235			20,955			20,271			132,120			88,369

INCOME BEFORE INCOME TAX	11,402		17,807			26,186			24,203			13,550			35,763			81,746

Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives	427		645			(617		)	(485		)	98			117			(359		)
Less: RIGL-All Other Investments	2,113		7,967			7,661			10,471			(774		)	(3,561		)	25,325

PRE-TAX OPERATING INCOME	$	8,862	$	9,195		$	19,142		$	14,217		$	14,226		$	39,207		$	56,780

Stable Value Products Key Data

	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
	2010			2011			2011			2011			2011			2010		2011
SALES
GIC	$	58,635		$	74,658		$	161,137		$	230,000		$	32,900		$	132,612	$	498,695
GFA - Direct Institutional	225,000			—			100,000			200,000			—			625,000		300,000
Total	$	283,635		$	74,658		$	261,137		$	430,000		$	32,900		$	757,612	$	798,695

DEPOSIT BALANCE
Quarter End Balance	$	3,076,233		$	2,664,139		$	2,565,235		$	2,827,862		$	2,769,510
Average Daily Balance	$	3,000,692		$	2,750,596		$	2,450,620		$	2,710,571		$	2,827,891

OPERATING SPREAD	1.18		%	1.34		%	3.12		%	2.10		%	2.01		%

ADJUSTED OPERATING SPREAD (1)	1.18		%	1.31		%	1.97		%	1.92		%	2.00		%

(1) Excludes participating mortgage loan income and bank loan participation fee income

Draft 2/9/2012

Page 19

Asset Protection Quarterly Trends

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	73,731		$	71,606		$	72,333		$	70,646		$	69,621		$	305,831		$	284,206
Reinsurance Ceded	(33,153		)	(31,813		)	(32,253		)	(31,782		)	(32,215		)	(138,539		)	(128,063		)
Net Premiums and Policy Fees	40,578			39,793			40,080			38,864			37,406			167,292			156,143
Net investment income	6,942			6,984			6,788			6,675			6,054			28,820			26,501
Other income	17,650			21,126			22,909			25,750			24,842			71,014			94,627
Total Revenues	65,170			67,903			69,777			71,289			68,302			267,126			277,271

BENEFITS & EXPENSES
Benefits and settlement expenses	25,302			23,866			25,147			26,529			23,968			99,836			99,510
Amortization of deferred policy acquisition costs and value of business acquired	12,175			11,214			10,847			10,143			9,524			50,007			41,728
Other operating expenses	22,801			26,332			27,957			28,598			28,239			87,822			111,126
Total Benefits and Expenses	60,278			61,412			63,951			65,270			61,731			237,665			252,364

INCOME BEFORE INCOME TAX	4,892			6,491			5,826			6,019			6,571			29,461			24,907
Less: noncontrolling interests	(168		)	(51		)	296			—			—			(436		)	245
OPERATING INCOME	$	5,060		$	6,542		$	5,530		$	6,019		$	6,571		$	29,897		$	24,662

Asset Protection Key Data

	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR		12 MOS
	2010		2011		2011		2011		2011		2010		2011

SALES
Credit insurance	$	8,735	$	8,766	$	9,650	$	8,970	$	8,381	$	36,219	$	35,767
Service contracts	62,710		64,178		79,142		83,109		80,544		251,986		306,973
Other products	13,806		17,244		20,116		18,532		17,016		54,489		72,908
Total	$	85,251	$	90,188	$	108,908	$	110,611	$	105,941	$	342,694	$	415,648

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Page 20

Acquisitions Quarterly Trends

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	169,754		$	180,494		$	215,533		$	219,970		$	218,502		$	676,849		$	834,499
Reinsurance Ceded	(111,229		)	(101,794		)	(112,681		)	(103,667		)	(101,534		)	(430,151		)	(419,676		)
Net Premiums and Policy Fees	58,525			78,700			102,852			116,303			116,968			246,698			414,823
Net investment income	112,509			117,938			132,710			140,352			138,261			458,703			529,261
RIGL - Derivatives	112,021			7,480			(28,858		)	(109,437		)	(3,116		)	(65,987		)	(133,931		)
RIGL - All Other Investments	(87,411		)	(5,274		)	34,676			124,416			13,289			116,044			167,107
Other income	1,227			1,279			1,391			1,432			1,459			5,886			5,561
Total Revenues	196,871			200,123			242,771			273,066			266,861			761,344			982,821

BENEFITS & EXPENSES
Benefits and settlement expenses	126,171			142,481			164,906			176,850			178,056			512,433			662,293
Amortization of deferred policy acquisition costs and value of business acquired	16,919			16,603			18,053			20,807			19,578			64,410			75,041
Other operating expenses	8,841			7,141			14,735			16,767			17,149			25,559			55,792
Total Benefits and Expenses	151,931			166,225			197,694			214,424			214,783			602,402			793,126

INCOME BEFORE INCOME TAX	44,940			33,898			45,077			58,642			52,078			158,942			189,695

Adjustments to Reconcile to Operating Income:
Less: RIGL - Derivatives	112,021			7,480			(28,858		)	(109,437		)	(3,116		)	(65,987		)	(133,931		)
Less: RIGL - All Other Investments	(87,411		)	(5,274		)	34,676			124,416			13,289			116,044			167,107
Add back: Related amortization of deferred policy acquisition costs and value of business acquired	1,388			699			170			365			(360		)	2,258			874

PRE-TAX OPERATING INCOME	$	21,718		$	32,391		$	39,429		$	44,028		$	41,545		$	111,143		$	157,393

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Page 21

Corporate & Other Quarterly Trends

(Dollars In Thousands)	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

REVENUES
Gross Premiums and Policy Fees	$	5,777		$	5,655		$	5,445		$	5,399		$	4,970		$	24,164		$	21,469
Reinsurance Ceded	—			(94		)	(5		)	(4		)	(5		)	(2		)	(108		)
Net Premiums and Policy Fees	5,777			5,561			5,440			5,395			4,965			24,162			21,361
Net investment income	32,234			52,204			31,479			41,235			41,408			154,501			166,326
RIGL - Derivatives	5,626			672			(3,322		)	(11,329		)	(1,159		)	(8,934		)	(15,138		)
RIGL - All Other Investments	1,059			(4,883		)	9,308			(6,987		)	(11,858		)	(9,802		)	(14,420		)
Other income	6,096			10,316			20,881			7,114			3,847			19,847			42,158
Total Revenues	50,792			63,870			63,786			35,428			37,203			179,774			200,287

BENEFITS & EXPENSES
Benefits and settlement expenses	4,846			5,823			5,824			6,338			3,543			24,575			21,528
Amortization of deferred policy acquisition costs and value of business acquired	395			358			352			326			1,618			1,694			2,654
Other operating expenses	48,611			51,879			47,647			50,895			49,475			197,471			199,896
Total Benefits and Expenses	53,852			58,060			53,823			57,559			54,636			223,740			224,078

INCOME (LOSS) BEFORE INCOME TAX	(3,060		)	5,810			9,963			(22,131		)	(17,433		)	(43,966		)	(23,791		)

Adjustments to Reconcile to Operating Income:
Less: RIGL-Derivatives	5,626			672			(3,322		)	(11,329		)	(1,159		)	(8,934		)	(15,138		)
Less: RIGL-All Other Investments	1,059			(4,883		)	9,308			(6,987		)	(11,858		)	(9,802		)	(14,420		)
Add back: Derivative activity related to corporate debt and investments	42			—			—			—			—			168			—
Less: noncontrolling interests	—			—			—			—			—			(9		)	—

PRE-TAX OPERATING INCOME (LOSS)	$	(9,703	)	$	10,021		$	3,977		$	(3,815	)	$	(4,416	)	$	(25,053	)	$	5,767

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Page 22

INFORMATION RELATED TO CERTAIN NON-GAAP DISCLOSURES

The following pages contain information related to certain non-GAAP disclosures (consolidated and segment operating income (loss), operating income per diluted share, shareowners’ equity per share excluding accumulated other comprehensive income (loss), operating income return on average equity, and net income return on average equity).

All income per share results are presented on a diluted basis, unless otherwise noted.

CONSOLIDATED AND SEGMENT OPERATING INCOME (LOSS) AND OPERATING INCOME PER DILUTED SHARE

Consolidated and segment operating income (loss) and operating income per diluted share (hereinafter collectively referred to as “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 business acquired (“VOBA”) and participating income from real estate ventures), and the cumulative effect of any change in accounting principle. 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 (loss) 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) generally attributable to the normal, recurring operations of the Company’s business.

SHAREOWNERS’ EQUITY PER SHARE EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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 shareowners’ equity. The market values of fixed maturities increase or decrease as interest rates change. The Company believes that an insurance company’s shareowners’ equity per share may be difficult to analyze without disclosing the effects of recording accumulated other comprehensive income (loss), including unrealized gains (losses) on investments. Therefore, the Company reports the non-GAAP measure shareowners’ equity per share excluding accumulated other comprehensive income (loss), including unrealized gains (losses) on investments. This non-GAAP measure may be reconciled to the GAAP measure, shareowners’ equity per share by including accumulated other comprehensive income (loss), including unrealized gains (losses) on investments.

OPERATING INCOME RETURN ON AVERAGE EQUITY

Operating income return on average equity is a measure used by management to evaluate the Company’s performance. It is calculated by dividing operating income (as defined above) for a rolling twelve month period by the average ending balance of shareowners’ equity excluding accumulated other comprehensive income (loss) for the five most recent quarters.

NET INCOME RETURN ON AVERAGE EQUITY

Net income return on average equity is a measure used by management to evaluate the Company’s performance. It is calculated by dividing net income for a rolling twelve month period by the average ending balance of shareowners’ equity excluding accumulated other comprehensive income (loss) for the five most recent quarters.

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Page 23

Reconciliation of Segment Operating Income (Loss) to Net Income available to PLC’s common shareowners

(Dollars In Thousands)	4TH QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2010			2011

Life Marketing	$	40,169		$	36,010		$	147,470		$	116,274
Acquisitions	21,718			41,545			111,143			157,393
Annuities	12,405			29,482			53,901			110,726
Stable Value Products	8,862			14,226			39,207			56,780
Asset Protection	5,060			6,571			29,897			24,662
Corporate & Other	(9,703		)	(4,416		)	(25,053		)	5,767

Total Pre-tax operating income	78,511			123,418			356,565			471,602

Realized Investment Gains (Losses) - Investments	(80,245		)	9,340			107,715			(149,428		)
Realized Investment Gains (Losses) - Derivatives	118,032			(4,177		)	(74,972		)	184,733
Income Tax Expense	(37,655		)	(38,710		)	(129,067		)	(167,837		)

Net income available to PLC’s common shareowners	$	78,643		$	89,871		$	260,241		$	339,070

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Page 24

Reconciliation of Operating Income per Diluted Share to Net Income Available to PLC’s Common Shareowners per Diluted Share

	4TH QTR			1ST QTR			2ND QTR			3RD QTR			4TH QTR			12 MOS
(Unaudited)	2010			2011			2011			2011			2011			2010			2011

OPERATING INCOME PER SHARE

Operating income per share-diluted	$	0.62		$	0.72		$	0.94		$	0.98		$	1.02		$	2.73		$	3.65
RIGL - Derivatives per share-diluted	0.87			0.07			(0.24		)	(0.92		)	(0.03		)	(0.56		)	(1.12		)
RIGL - All Other Investments-diluted	(0.59		)	(0.02		)	0.36			0.97			0.07			0.80			1.39
Net income available to PLC’s common shareowners per share-diluted	$	0.90		$	0.77		$	1.06		$	1.03		$	1.06		$	2.97		$	3.92

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Reconciliation of Total Protective Life Corporation’s Shareowners’ Equity per Share to Total Protective Life Corporation’s Shareowners’ Equity (Excl. AOCI) per share

	4TH QTR		1ST QTR		2ND QTR		3RD QTR		4TH QTR
(Unaudited)	2010		2011		2011		2011		2011

PROTECTIVE LIFE CORPORATION’S SHAREOWNERS’ EQUITY PER SHARE
Total Protective Life Corporation’s Shareowners’ Equity	$	38.88	$	39.87	$	42.59	$	49.30	$	51.68
Less: Accumulated other comprehensive income (loss)	3.42		3.72		5.33		10.69		11.83
Excluding accumulated other comprehensive income (loss)	$	35.46	$	36.15	$	37.26	$	38.61	$	39.85

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Calculation of Operating Income Return on Average Equity Rolling Twelve Months Ended December 31, 2011

(Dollars In Thousands)	Three Months												Twelve Months
(Unaudited)	3/31/2011			6/30/2011			9/30/2011			12/31/2011			12/31/2011
NUMERATOR:
Net income available to PLC’s common shareowners	$	67,517		$	93,068		$	88,614		$	89,871		$	339,070
Less:
Realized investment gains (losses), net of income tax
Investments	(774		)	32,129			83,461			7,041			121,857
Derivatives	5,718			(21,318		)	(78,813		)	(2,715		)	(97,128		)
Related amortization of DAC and VOBA, net of income tax	(607		)	122			(326		)	(970		)	(1,781		)
Add back:
Derivative gains related to Corp. debt and investments, net of income tax	—			—			—			—			—
Operating Income	$	63,180		$	82,135		$	84,292		$	86,515		$	316,122

					Total
					Protective Life
					Corporation’s
	Total				Shareowners’
	Protective Life		Accumulated		Equity Excluding
	Corporation’s		Other		Accumulated Other
	Shareowners’		Comprehensive		Comprehensive
	Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
December 31, 2010	$	3,331,087	$	293,254	$	3,037,833
March 31, 2011	3,417,209		319,354		3,097,855
June 30, 2011	3,605,238		450,929		3,154,309
September 30, 2011	4,082,235		884,452		3,197,783
December 31, 2011	4,220,465		966,219		3,254,246
Total					$	15,742,026

Average					$	3,148,405

Operating Income Return on Average Equity					10.0		%

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Calculation of Operating Income Return on Average Equity Rolling Twelve Months Ended December 31, 2010

(Dollars In Thousands)	Three Months												Twelve Months
(Unaudited)	3/31/2010			6/30/2010			9/30/2010			12/31/2010			12/31/2010
NUMERATOR:
Net income available to PLC’s common shareowners	$	69,779		$	41,371		$	70,448		$	78,643		$	260,241
Less:
Realized investment gains (losses), net of income tax
Investments	23,420			33,089			67,062			(50,214		)	73,357
Derivatives	(21,204		)	(45,806		)	(58,361		)	76,748			(48,623		)
Related amortization of DAC and VOBA, net of income tax	(140		)	(212		)	(1,044		)	(1,945		)	(3,341		)
Add back:
Derivative gains related to Corp. debt and investments, net of income tax	27			27			27			27			108
Operating Income	$	67,730		$	54,327		$	62,818		$	54,081		$	238,956

						Total
						Protective Life
						Corporation’s
	Total					Shareowners’
	Protective Life		Accumulated			Equity Excluding
	Corporation’s		Other			Accumulated Other
	Shareowners’		Comprehensive			Comprehensive
	Equity		Income (Loss)			Income (Loss)
DENOMINATOR:
December 31, 2009	$	2,478,821	$	(321,169	)	$	2,799,990
March 31, 2010	2,821,033		(55,716		)	2,876,749
June 30, 2010	3,085,599		177,490			2,908,109
September 30, 2010	3,571,392		601,964			2,969,428
December 31, 2010	3,331,087		293,254			3,037,833
Total						$	14,592,109

Average						$	2,918,422

Operating Income Return on Average Equity						8.2		%

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Calculation of Net Income Available to PLC’s common shareowners Return on Average Equity Rolling Twelve Months Ended December 31, 2011

(Dollars In Thousands)	Three Months								Twelve Months
(Unaudited)	3/31/2011		6/30/2011		9/30/2011		12/31/2011		12/31/2011
NUMERATOR:
Net income available to PLC’s common shareowners	$	67,517	$	93,068	$	88,614	$	89,871	$	339,070

					Total
					Protective Life
					Corporation’s
	Total				Shareowners’
	Protective Life		Accumulated		Equity Excluding
	Corporation’s		Other		Accumulated Other
	Shareowners’		Comprehensive		Comprehensive
	Equity		Income (Loss)		Income (Loss)
DENOMINATOR:
December 31, 2010	$	3,331,087	$	293,254	$	3,037,833
March 31, 2011	3,417,209		319,354		3,097,855
June 30, 2011	3,605,238		450,929		3,154,309
September 30, 2011	4,082,235		884,452		3,197,783
December 31, 2011	4,220,465		966,219		3,254,246
Total					$	15,742,026

Average					$	3,148,405

Net income available to PLC’s common shareowners Return on Average Equity					10.8		%

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Page 29

Calculation of Net Income available to PLC’s common shareowners Return on Average Equity Rolling Twelve Months Ended December 31, 2010

(Dollars In Thousands)	Three Months								Twelve Months
(Unaudited)	3/31/2010		6/30/2010		9/30/2010		12/31/2010		12/31/2010
NUMERATOR:
Net income available to PLC’s common shareowners	$	69,779	$	41,371	$	70,448	$	78,643	$	260,241

						Total
						Protective Life
						Corporation’s
	Total					Shareowners’
	Protective Life		Accumulated			Equity Excluding
	Corporation’s		Other			Accumulated Other
	Shareowners’		Comprehensive			Comprehensive
	Equity		Income (Loss)			Income (Loss)
DENOMINATOR:
December 31, 2009	$	2,478,821	$	(321,169	)	$	2,799,990
March 31, 2010	2,821,033		(55,716		)	2,876,749
June 30, 2010	3,085,599		177,490			2,908,109
September 30, 2010	3,571,392		601,964			2,969,428
December 31, 2010	3,331,087		293,254			3,037,833
Total						$	14,592,109

Average						$	2,918,422

Net income available to PLC’s common shareowners Return on Average Equity						8.9		%

PROTECTIVE LIFE CORP - FORM 8-K - EX-99.2 - February 9, 2012

Attached files

PROTECTIVE LIFE CORP Reports