Protective Reports Fourth Quarter And Full-Year 2011 Financial Results

Protective Life Corporation (NYSE: PL) (“PLC” or “the Company”) today reported results for the fourth quarter of 2011. Net income available to PLC’s common shareowners for the fourth quarter of 2011 was $89.9 million or $1.06 per average diluted share, compared to $78.6 million or $0.90 per average diluted share in the fourth quarter of 2010. After-tax operating income was $86.5 million or $1.02 per average diluted share, compared to $54.1 million or $0.62 per average diluted share in the fourth quarter of 2010.

Net income available to PLC’s common shareowners for the twelve months ended December 31, 2011 was $339.1 million or $3.92 per average diluted share, compared to $260.2 million or $2.97 per average diluted share for the twelve months ended December 31, 2010. After-tax operating income was $316.1 million or $3.65 per average diluted share, compared to $239.0 million or $2.73 per average diluted share for the twelve months ended December 31, 2010.

John D. Johns, Protective’s Chairman, President and Chief Executive Officer commented:

“We finished 2011 on a very strong note. For the year, operating earnings were up 32%, net income reached a record level and we achieved a full-year operating ROE of 10%. The earnings momentum of our franchise returned to pre-financial crisis levels, and we well exceeded our financial plans for the year. In addition, our retail product segments achieved or exceeded our sales goals for the year; credit quality improved and yields were resilient in our investment portfolio; we successfully managed the integration of two major acquisitions; we repurchased 4.1 million shares; and we estimate our statutory RBC ratio to be approximately 425% at year end. Notwithstanding a challenging macroeconomic environment, we are off to a good start in 2012, and we expect our positive momentum to continue during the year.”

Business Segment Results
Fourth Quarter and Full Year
The table below sets forth business segment operating income before income tax for the periods shown:
Operating Income Before Income Tax
(dollars in thousands)
			4Q11					4Q10					2011				2010
Life Marketing			$	36,010				$	40,169				$	116,274			$	147,470
Acquisitions				41,545					21,718					157,393				111,143
Annuities				29,482					12,405					110,726				53,901
Stable Value Products				14,226					8,862					56,780				39,207
Asset Protection				6,571					5,060					24,662				29,897
Corporate & Other				(4,416	)				(9,703	)				5,767				(25,053	)
			$	123,418				$	78,511				$	471,602			$	356,565

The following table reconciles segment operating income to consolidated net income available to PLC’s common shareowners:

(dollars in thousands)
			4Q11				4Q10				2011				2010
Operating income before income tax			$	123,418			$	78,511			$	471,602			$	356,565
Realized investment gains (losses)				6,656				40,822				38,045				38,052
Less:
Periodic settlements on derivatives				-				42				-				168
Related amortization of deferred policy acquisition costs and value of business acquired				1,493				2,993				2,740				5,141
Income tax expense				38,710				37,655				167,837				129,067
Net income available to PLC's common shareowners			$	89,871			$	78,643			$	339,070			$	260,241

Sales

The Company uses sales statistics to measure the relative progress of its marketing efforts. The Company derives these statistics from various sales tracking and administrative systems and not from its financial reporting systems or financial statements. These statistics measure only one of many factors that may affect future profitability of the business segments and therefore are not intended to be predictive of future profitability.

The table below sets forth business segment sales for the periods shown:
(dollars in millions)
			4Q11				4Q10				2011				2010
Life Marketing			$	25.2			$	45.7			$	133.2			$	171.4
Annuities				689.5				661.8				3,381.2				2,645.0
Stable Value Products				32.9				283.6				798.7				757.6
Asset Protection				105.9				85.3				415.6				342.7

Review of Business Segment Results for Fourth Quarter

Life Marketing

Life Marketing segment pre-tax operating income was $36.0 million in the fourth quarter of 2011 compared to $40.2 million in the fourth quarter of 2010. The decrease was primarily the result of higher legal and other expenses of $5.1 million that were recorded in the fourth quarter of 2011. This was partially offset by more favorable traditional life mortality experience. Actual traditional life mortality was 86% of expected in the fourth quarter of 2011 compared to 95% of expected in the fourth quarter of 2010.

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