Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | December 31, 2001 |
|---|
| Delaware | 1-12332 | 95-2492236 | |
|---|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer | |
| of incorporation) | File Number) | Identification No.) |
| 2801 Highway 280 South, Birmingham, Alabama | 35223 | |
|---|---|---|
| (Address of principal executive offices) | (Zip Code) |
On December 31, 2001, Protective Life Corporation (the “Company”) completed its previously announced sale of substantially all of its Dental Benefits Division to Fortis, Inc. The transaction, which was valued at approximately $300 million, included the coinsurance of the Division’s indemnity business and the sale of the Division’s prepaid dental subsidiaries.
The following pro forma statements of Protective Life Corporation are included herein:
Pro Forma Consolidated Condensed Balance Sheet as of September 30, 2001 (unaudited)
Pro Forma Consolidated Condensed Statement of Income for the nine months ended September 30, 2001 (unaudited)
Pro Forma Consolidated Condensed Statement of Income for the year ended December 31, 2000 (unaudited)
Pro Forma Consolidated Condensed Statement of Income for the year ended December 31, 1999 (unaudited)
Pro Forma Consolidated Condensed Statement of Income for the year ended December 31, 1998 (unaudited)
Notes to Pro Forma Consolidated Condensed Financial Statements (unaudited)
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PROTECTIVE LIFE CORPORATION | |
|---|---|
| BY/s/Jerry W. DeFoor | |
| Jerry W. DeFoor | |
| Vice President and Controller |
Dated: January 15, 2002
PRO FORMA STATEMENTS OF PROTECTIVE LIFE CORPORATION
Pro Forma Consolidated Condensed Balance Sheet as of
September 30, 2001 (unaudited)
Pro Forma Consolidated Condensed Statement of Income
for the nine months ended September 30, 2001 (unaudited)
Pro Forma Consolidated Condensed Statement of Income
for the year ended December 31, 2000 (unaudited)
Pro Forma Consolidated Condensed Statement of Income
for the year ended December 31, 1999 (unaudited)
Pro Forma Consolidated Condensed Statement of Income
for the year ended December 31, 1998 (unaudited)
Notes to Pro Forma Consolidated Condensed Statement (unaudited)
PROTECTIVE LIFE
PROTECTIVE LIFE CORPORATION
CORPORATION PRO FORMA PRO FORMA
CONSOLIDATED ADJUSTMENTS CONSOLIDATED
-------------- ----------- --------------
(UNAUDITED)
ASSETS
Investments:
Fixed maturities, at market $9,537,794 ($8,382)(1) $9,529,412
Equity securities, at market 79,200 79,200
Mortgage loans on real estate 2,507,560 2,507,560
Investment in real estate, net 22,992 22,992
Policy loans 329,762 329,762
Other long-term investments 183,696 183,696
Short-term investments 144,002 (6,391)(1) 137,611
---------- --------- ----------
Total investments 12,805,006 (14,773) 12,790,233
Cash 272,992 219,396 (1) 492,388
Accrued investment income 148,492 (79)(1) 148,413
Accounts and premiums receivable, net 117,798 (18,860)(1) 98,938
Accounts receivable - investments 558,900 558,900
Reinsurance receivables 1,153,644 51,176 (1) 1,204,820
Deferred policy acquisition costs 1,374,836 (13,510)(1) 1,361,326
Goodwill, net 247,952 (198,878)(1) 49,074
Property and equipment, net 55,794 55,794
Other assets 262,369 (5,476)(1) 248,393
(8,500)(2)
Assets related to separate accounts
Variable annuity 1,514,327 1,514,327
Variable universal life 65,193 65,193
Other 3,923 3,923
----------- --------- -----------
$18,581,226 $10,496 $18,591,722
=========== ========= ===========
LIABILITIES
Policy liabilities and accruals $6,949,783 ($7,237)(1) $6,942,546
Stable value contract account balances 3,838,608 3,838,608
Annuity account balances 2,407,805 2,407,805
Other policyholders' funds 144,762 (1,678)(1) 143,084
Accounts payable - investments 939,951 939,951
Other liabilities 461,389 (13,483)(1) 462,948
15,042 (2)
Accrued income taxes 15,108 53,898 (1) 63,741
(5,265)(2)
Deferred income taxes 181,671 1,611 (1) 180,307
(2,975)(2)
Debt 410,498 410,498
Guaranteed Preferred Beneficial Interests
8.25% Trust Originated Preferred Securities 75,000 75,000
7.5% Trust Originated Preferred Securities 100,000 100,000
Liabilities related to separate accounts
Variable annuity 1,514,327 1,514,327
Variable universal life 65,193 65,193
Other 3,923 3,923
---------- --------- ----------
17,108,018 39,913 17,147,931
---------- --------- ----------
SHARE-OWNERS' EQUITY
Preferred Stock, $1.00 par value,
Shares authorized: 3,600,000; Issued: None
Junior Participating Cumulative Preferred Stock,
$1.00 par value Shares authorized: 400,000;
Issued: None
Common Stock, $.50 par value,
Shares authorized: 160,000,000
Shares issued: 73,251,960 36,626 36,626
Additional paid-in capital 404,827 404,827
Treasury stock, at cost 4,696,788 shares (15,897) (15,897)
Stock held in trust 49,761 shares (1,290) (1,290)
Unallocated stock in Employee Stock Ownership Plan
1,001,401 shares (3,686) (3,686)
Retained earnings 938,988 (14,115)(1) 909,571
(15,302)(2)
Accumulated other comprehensive income:
Net unrealized gains on investments (net of income
tax: $61,191) 113,640 113,640
----------- -------- -----------
1,473,208 (29,417) 1,443,791
----------- -------- -----------
$18,581,226 $10,496 $18,591,722
=========== ======== ===========
See notes to pro forma consolidated condensed financial statements
PROTECTIVE LIFE
PROTECTIVE LIFE CORPORATION
CORPORATION PRO FORMA PRO FORMA
CONSOLIDATED ADJUSTMENTS CONSOLIDATED
---------------- ----------- --------------
Revenues
Premiums and policy fees $1,264,606 $254,212 $1,010,394
Reinsurance ceded 554,307 8,470 545,837
--------- ------- ---------
Net of reinsurance ceded 710,299 245,742 464,557
Net investment income 646,963 4,718 642,245
Realized investment gains (losses) 819 819
Other income 107,760 13,119 94,641
--------- ------- ---------
1,465,841 263,579 1,202,262
--------- ------- ---------
Benefits and expenses
Benefits and settlement expenses 901,582 169,827 731,755
Amortization of deferred policy acquisition costs 95,203 5,414 89,789
Amortization of goodwill 6,746 4,103 2,643
Other operating expenses 287,710 78,862 208,848
--------- ------- ---------
1,291,241 258,206 1,033,035
--------- ------- ---------
Income before income tax 174,600 5,373 169,227
Income tax expense 59,189 3,317 55,872
--------- ------- ---------
Income from Continuing Operations Before
the Effect of a Change in Accounting
Principle and Extraordinary Loss $115,411 $2,056 $113,355
========= ======= =========
See notes to pro forma consolidated condensed financial statements
PROTECTIVE LIFE
PROTECTIVE LIFE CORPORATION
CORPORATION PRO FORMA PRO FORMA
CONSOLIDATED ADJUSTMENTS CONSOLIDATED
--------------- ----------- ----------------
Revenues
Premiums and policy fees $1,656,108 $352,837 $1,303,271
Reinsurance ceded 822,450 11,102 811,348
--------- ------- ---------
Net of reinsurance ceded 833,658 341,735 491,923
Net investment income 737,284 7,131 730,153
Realized investment gains (losses) (7,043) (7,043)
Other income 170,068 18,234 151,834
--------- ------- ---------
1,733,967 367,100 1,366,867
--------- ------- ---------
Benefits and expenses
Benefits and settlement expenses 989,565 227,034 762,531
Amortization of deferred policy acquisition costs 149,574 6,394 143,180
Amortization of goodwill 8,525 5,412 3,113
Other operating expenses 346,911 102,225 244,686
--------- ------- ---------
1,494,575 341,065 1,153,510
--------- ------- ---------
Income before income tax 239,392 26,035 213,357
Income tax expense 85,916 11,006 74,910
--------- ------- ---------
Income from Continuing Operations Before
the Effect of a Change in Accounting
Principle and Extraordinary Loss $153,476 $15,029 $138,447
========= ======= =========
See notes to pro forma consolidated condensed financial statements
PROTECTIVE LIFE
PROTECTIVE LIFE CORPORATION
CORPORATION PRO FORMA PRO FORMA
CONSOLIDATED ADJUSTMENTS CONSOLIDATED
---------------- ----------- ---------------
Revenues
Premiums and policy fees $1,299,317 $400,313 $899,004
Reinsurance ceded 538,033 39,768 498,265
--------- ------- ---------
Net of reinsurance ceded 761,284 360,545 400,739
Net investment income 676,401 7,998 668,403
Realized investment gains (losses) (1,057) (1,057)
Other income 97,254 7,563 89,691
--------- ------- ---------
1,533,882 376,106 1,157,776
--------- ------- ---------
Benefits and expenses
Benefits and settlement expenses 864,582 233,202 631,380
Amortization of deferred policy acquisition costs 104,912 8,223 96,689
Amortization of goodwill 5,584 5,268 316
Other operating expenses 319,283 94,742 224,541
--------- ------- ---------
1,294,361 341,435 952,926
--------- ------- ---------
Income before income tax 239,521 34,671 204,850
Income tax expense 86,431 13,979 72,452
--------- ------- ---------
Income from Continuing Operations Before
the Effect of a Change in Accounting
Principle and Extraordinary Loss $153,090 $20,692 $132,398
========= ======= =========
See notes to pro forma consolidated condensed financial statements
PROTECTIVE LIFE
PROTECTIVE LIFE CORPORATION
CORPORATION PRO FORMA PRO FORMA
CONSOLIDATED ADJUSTMENTS CONSOLIDATED
--------------- ----------- ---------------
Revenues
Premiums and policy fees $1,122,010 $355,395 $766,615
Reinsurance ceded 459,215 104,696 354,519
--------- ------- ---------
Net of reinsurance ceded 662,795 250,699 412,096
Net investment income 636,396 5,002 631,394
Realized investment gains (losses) 3,121 3,121
Other income 64,103 4,346 59,757
--------- ------- ---------
1,366,415 260,047 1,106,368
--------- ------- ---------
Benefits and expenses
Benefits and settlement expenses 785,765 155,241 630,524
Amortization of deferred policy acquisition costs 111,188 6,859 104,329
Amortization of goodwill 2,778 2,778 0
Other operating expenses 264,572 65,113 199,459
--------- ------- ---------
1,164,303 229,991 934,312
--------- ------- ---------
Income before income tax 202,112 30,056 172,056
Income tax expense 71,331 11,492 59,839
--------- ------- ---------
Income from Continuing Operations Before
the Effect of a Change in Accounting
Principle and Extraordinary Loss $130,781 $18,564 $112,217
========= ======= =========
See notes to pro forma consolidated condensed financial statements
On December 31, 2001, Protective Life Corporation (the “Company”) completed its sale to Fortis, Inc. of substantially all of its Dental Benefits Division (“Dental Division”), discontinued certain other remaining Dental Division operations, and discontinued other Dental Division related operations reported in the Corporate and Other segment, primarily other health insurance lines (the sale and discontinued operations are hereinafter collectively referred to as the “discontinuance”). These transactions will be accounted for as discontinued operations under Accounting Principles Board Opinion No. 30.
The accompanying unaudited pro forma consolidated condensed balance sheet as of September 30, 2001, gives effect to the discontinuance as if such transactions had occurred on September 30, 2001.
The accompanying unaudited pro forma consolidated condensed statements of income for the nine months ended September 30, 2001 and the years ended December 31, 2000, 1999, and 1998, give effect to the Company’s discontinuance of these operations by removing their historical results from those amounts previously reported. These pro forma statements of income represent only those elements of the Company’s operations that are a part of continuing operations. Items of a nonrecurring nature, which are a part of the discontinuance, are not included in the pro forma statements of income.
The above-mentioned statements have been prepared in accordance with generally accepted accounting principles for pro forma financial information and with the Instructions to Form 8-K and Article 11 of Regulation S-X. In the opinion of management, all significant adjustments required for an appropriate pro forma presentation have been included.
The following pro forma adjustments are made to the unaudited consolidated condensed balance sheet as if the discontinuance occurred September 30, 2001. The pro forma adjustments are based upon the information available as of the date of this Form 8-K. The pro forma adjustments include the estimated loss on sale of the Dental Division and other estimated costs of the discontinuance. Actual results of the discontinuance will not be determinable until the Company’s results for the quarter ending December 31, 2001, are available.
Reference numbers correspond to those on the pro forma consolidated condensed balance sheet.
1. To give effect to the sale of the assets, liabilities, and equity and recording of accrued income taxes related thereto.
2. To give effect to costs related to the discontinuance including indemnifications and other exit costs.
The pro forma adjustments made to the unaudited consolidated condensed statements of income are to give effect to the elimination of the historical revenues and expenses of the discontinued business.
The pro forma statements of income do not purport to be indicative of results of the future operations of the Company. That is, the following pro forma information is not a projection of the Company’s future results from continuing operations, and does not include any pro forma adjustments for the future effects of the transactions including any income from the reinvestment of capital.