Protective Reports Fourth Quarter And Record Full-Year 2013 Financial Results

Protective Life Corporation (NYSE: PL) (“PLC” or the “Company”) today reported results for the fourth quarter of 2013. Net income available to PLC’s common shareowners for the fourth quarter of 2013 was $118.9 million or $1.47 per average diluted share, compared to $66.8 million or $0.82 per average diluted share in the fourth quarter of 2012. After-tax operating income was $115.9 million or $1.43 per average diluted share, compared to $79.7 million or $0.98 per average diluted share in the fourth quarter of 2012.

Net income available to PLC’s common shareowners for the twelve months ended December 31, 2013 was $393.5 million or $4.86 per average diluted share, compared to $302.5 million or $3.66 per average diluted share for the twelve months ended December 31, 2012. After-tax operating income was $344.6 million or $4.26 per average diluted share, compared to $312.7 million or $3.78 per average diluted share for the twelve months ended December 31, 2012.

“We are delighted to report a record level of operating earnings and net income in 2013 – with a stronger than expected finish in the fourth quarter capping a truly outstanding year at Protective,” said John D. Johns, Chairman, President, and CEO. “Our differentiated and balanced business model, which combines the strength of our industry-leading acquisition capabilities with our highly efficient retail business segments, once again produced solid earnings results. In fact, this marks the fifth consecutive year in which our results have exceeded our ambitious annual earnings plans. As we look ahead to 2014, we expect another solid year of earnings growth, increased book value and ROE improvement driven by the successful integration of the MONY acquisition, our innovative retail growth initiatives, our focus on careful and rational allocation of capital and our constant attention to rigorous expense management.”

Business Segment Results

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

Operating Income (Loss) Before Income Tax
For the For the
three months ended twelve months ended
($ in thousands) December 31, December 31,
2013 2012 2013 2012
Life Marketing $ 32,700 $ 15,642 $ 110,298 $ 105,032
Acquisitions 60,762 42,191 154,003 171,060
Annuities 53,484 45,348 184,130 119,092
Stable Value Products 21,047 18,675 80,561 60,329
Asset Protection 6,503 859 26,795 16,454
Corporate & Other   (5,496 )   928   (40,562 )   (3,203 )
$ 169,000   $ 123,643 $ 515,225   $ 468,764  
 

The following table reconciles segment operating income to consolidated net income available to PLC’s common shareowners:
  For the   For the
three months ended twelve months ended
($ in thousands) December 31, December 31,
2013   2012 2013   2012
Operating income before income tax $ 169,000 $ 123,643 $ 515,225 $ 468,764
Realized investment gains (losses) 16,895 (25,613 ) 101,884 (29,830 )
Less:

Amortization of deferred policy acquisition costs, value of business acquired, and benefits and settlement expenses
12,283 (5,689 ) 26,736 (14,037 )
Income tax expense   54,699   36,923     196,909   150,519  
Net income available to PLC's common shareowners $ 118,913 $ 66,796   $ 393,464 $ 302,452  
 

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.

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