Exhibit 99.2
Supplemental Financial Information
First Quarter 2016
Table of Contents | PRIMERICA, INC. Financial Supplement |
Page | |
| Preface, definition of Non-GAAP financial measures | 3 |
| Condensed balance sheets and reconciliation of balance sheet non-GAAP to GAAP financial measures | 4 |
| Financial results and other statistical data | 5 |
| Statements of income | 6 |
| Reconciliation of statement of income non-GAAP to GAAP financial measures | 7 |
| Segment operating results | 8 |
| Term Life Insurance segment - financial results, key statistics, and financial analysis | 9-10 |
| Investment and Savings Products segment - financial results, financial analysis, and key statistics | 11-12 |
| Investment portfolio | 13-15 |
| Five-year historical key statistics | 16 |
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Preface | PRIMERICA, INC. Financial Supplement |
FIRST QUARTER 2016
This document is a financial supplement to our first quarter 2016 earnings release. It is designed to enable comprehensive analysis of our ongoing business using the same core metrics that our management utilizes in assessing our business and making strategic and operational decisions. Throughout this document we provide financial information that is derived from our U.S. GAAP financial statements and adjusted for three different purposes, as follows:
| ● | Operatingadjustments exclude the impact of realized investment gains and losses. |
| ● | Adjusted when used in describing stockholders' equity refers to the removal of the impact of net unrealized gains and losses on invested assets. |
| ● | IPO coinsurance transactions adjustments relate to transactions in the first quarter of 2010, where we reinsured between 80% and 90% of our business that was in-force at year-end 2009 to entities then affiliated with Citigroup Inc. ("Citi") that were executed concurrent with our IPO. |
Management utilizes certain non-GAAP financial measures in managing the business and believes they present relevant and meaningful analytical metrics for evaluating the ongoing business. Reconciliations of non-GAAP to GAAP financial measures are included in this financial supplement.
Certain items throughout this supplement may not add due to rounding and as such, may not agree to other public reporting of the respective item. Certain items throughout this supplement are noted as 'na' to indicate not applicable. Certain variances are noted as 'nm' to indicate not meaningful. Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. These reclassifications had no impact on net income or total stockholders' equity.
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Condensed Balance Sheets and Reconciliation of Balance Sheet Non-GAAP to GAAP Financial Measures | PRIMERICA, INC. Financial Supplement |
| (Dollars in thousands) | Dec 31, 2014 | Mar 31, 2015 | Jun 30, 2015 | Sep 30, 2015 | Dec 31, 2015 | Mar 31, 2016 | ||||||||||||||||||
| Condensed Balance Sheets | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Investments and cash excluding securities held to maturity | $ | 2,040,313 | $ | 2,053,392 | $ | 1,963,702 | $ | 1,924,636 | $ | 1,965,576 | $ | 1,968,419 | ||||||||||||
| Securities held to maturity | 220,000 | 238,000 | 328,000 | 356,000 | 365,220 | 404,860 | ||||||||||||||||||
| Total investments and cash | 2,260,313 | 2,291,392 | 2,291,702 | 2,280,636 | 2,330,796 | 2,373,279 | ||||||||||||||||||
| Due from reinsurers | 4,115,533 | 4,094,456 | 4,137,425 | 4,103,949 | 4,110,628 | 4,160,266 | ||||||||||||||||||
| Deferred policy acquisition costs | 1,351,180 | 1,377,022 | 1,430,508 | 1,465,175 | 1,500,259 | 1,559,833 | ||||||||||||||||||
| Other assets | 567,069 | 568,391 | 591,579 | 623,583 | 603,707 | 655,303 | ||||||||||||||||||
| Separate account assets | 2,440,303 | 2,386,265 | 2,324,980 | 2,086,598 | 2,063,899 | 2,264,108 | ||||||||||||||||||
| Total assets | $ | 10,734,398 | $ | 10,717,525 | $ | 10,776,195 | $ | 10,559,941 | $ | 10,609,289 | $ | 11,012,789 | ||||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Future policy benefits | $ | 5,264,608 | $ | 5,289,016 | $ | 5,361,580 | $ | 5,388,042 | $ | 5,431,711 | $ | 5,518,834 | ||||||||||||
| Other policy liabilities | 591,719 | 577,951 | 587,687 | 578,322 | 594,908 | 597,057 | ||||||||||||||||||
| Income taxes | 140,467 | 157,684 | 156,212 | 152,314 | 148,125 | 177,457 | ||||||||||||||||||
| Other liabilities | 410,629 | 402,126 | 384,666 | 397,114 | 416,417 | 418,469 | ||||||||||||||||||
| Notes payable | 372,187 | 372,278 | 372,369 | 372,460 | 372,552 | 372,643 | ||||||||||||||||||
| Surplus note | 219,147 | 237,162 | 327,176 | 355,190 | 364,424 | 404,079 | ||||||||||||||||||
| Payable under securities lending | 50,211 | 55,622 | 63,898 | 83,220 | 71,482 | 87,383 | ||||||||||||||||||
| Separate account liabilities | 2,440,303 | 2,386,265 | 2,324,980 | 2,086,598 | 2,063,899 | 2,264,108 | ||||||||||||||||||
| Total liabilities | 9,489,272 | 9,478,103 | 9,578,569 | 9,413,262 | 9,463,517 | 9,840,030 | ||||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||||||
Common stock ($0.01 par value) (1) | 522 | 516 | 501 | 486 | 483 | 473 | ||||||||||||||||||
| Paid-in capital | 353,335 | 323,996 | 259,937 | 195,314 | 180,250 | 137,857 | ||||||||||||||||||
| Retained earnings | 795,741 | 830,624 | 871,440 | 912,749 | 952,804 | 989,685 | ||||||||||||||||||
| Treasury stock | — | — | — | — | — | — | ||||||||||||||||||
| Accumulated other comprehensive income (loss), net: | ||||||||||||||||||||||||
| Net unrealized investment gains (losses) not other-than-temporarily impaired | 74,307 | 83,401 | 61,742 | 49,889 | 32,106 | 48,747 | ||||||||||||||||||
| Net unrealized investment losses other-than-temporarily impaired | (461 | ) | (461 | ) | (461 | ) | (73 | ) | (71 | ) | (70 | ) | ||||||||||||
| Cumulative translation adjustment | 21,682 | 1,346 | 4,468 | (11,684 | ) | (19,801 | ) | (3,933 | ) | |||||||||||||||
| Total stockholders’ equity | 1,245,126 | 1,239,422 | 1,197,626 | 1,146,680 | 1,145,772 | 1,172,759 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,734,398 | $ | 10,717,525 | $ | 10,776,195 | $ | 10,559,941 | $ | 10,609,289 | $ | 11,012,789 | ||||||||||||
| Reconciliation of Adjusted Stockholders' Equity to Total Stockholders' Equity | ||||||||||||||||||||||||
| Adjusted stockholders' equity | $ | 1,171,280 | $ | 1,156,482 | $ | 1,136,345 | $ | 1,096,864 | $ | 1,113,736 | $ | 1,124,082 | ||||||||||||
| Reconciling items: | ||||||||||||||||||||||||
| Net unrealized investment gains (losses) not other-than-temporarily impaired | 74,307 | 83,401 | 61,742 | 49,889 | 32,106 | 48,747 | ||||||||||||||||||
| Net unrealized investment losses other-than-temporarily impaired | (461 | ) | (461 | ) | (461 | ) | (73 | ) | (71 | ) | (70 | ) | ||||||||||||
| Total reconciling items | 73,846 | 82,940 | 61,281 | 49,816 | 32,036 | 48,678 | ||||||||||||||||||
| Total stockholders’ equity | $ | 1,245,126 | $ | 1,239,422 | $ | 1,197,626 | $ | 1,146,680 | $ | 1,145,772 | $ | 1,172,759 | ||||||||||||
| Adjusted Stockholders' Equity Rollforward | ||||||||||||||||||||||||
| Balance, beginning of period | $ | 1,216,813 | $ | 1,171,280 | $ | 1,156,482 | $ | 1,136,345 | $ | 1,096,864 | $ | 1,113,736 | ||||||||||||
| Net Income | 45,466 | 43,401 | 49,173 | 49,350 | 47,948 | 45,176 | ||||||||||||||||||
| Shareholder dividends | (6,462 | ) | (8,517 | ) | (8,357 | ) | (8,042 | ) | (7,893 | ) | (8,295 | ) | ||||||||||||
| Retirement of shares and warrants | (82,447 | ) | (44,789 | ) | (70,999 | ) | (71,433 | ) | (20,538 | ) | (52,988 | ) | ||||||||||||
| Net foreign currency translation adjustment | (8,600 | ) | (20,336 | ) | 3,121 | (16,152 | ) | (8,116 | ) | 15,867 | ||||||||||||||
| Other, net | 6,510 | 15,444 | 6,925 | 6,795 | 5,471 | 10,585 | ||||||||||||||||||
| Balance, end of period | $ | 1,171,280 | $ | 1,156,482 | $ | 1,136,345 | $ | 1,096,864 | $ | 1,113,736 | $ | 1,124,082 | ||||||||||||
| Deferred Policy Acquisition Costs Rollforward | ||||||||||||||||||||||||
| Balance, beginning of period | $ | 1,321,415 | $ | 1,351,180 | $ | 1,377,022 | $ | 1,430,508 | $ | 1,465,175 | $ | 1,500,259 | ||||||||||||
| General expenses deferred | 8,171 | 7,953 | 8,554 | 8,396 | 7,951 | 8,443 | ||||||||||||||||||
| Commission costs deferred | 67,980 | 70,389 | 78,799 | 79,787 | 77,810 | 81,174 | ||||||||||||||||||
| Amortization of deferred policy acquisition costs | (39,544 | ) | (36,213 | ) | (36,383 | ) | (40,797 | ) | (44,334 | ) | (43,129 | ) | ||||||||||||
| Foreign currency impact and other, net | (6,842 | ) | (16,287 | ) | 2,516 | (12,718 | ) | (6,343 | ) | 13,086 | ||||||||||||||
| Balance, end of period | $ | 1,351,180 | $ | 1,377,022 | $ | 1,430,508 | $ | 1,465,175 | $ | 1,500,259 | $ | 1,559,833 | ||||||||||||
| (1) | Outstanding common shares exclude restricted stock units. |
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Financial Results and Other Statistical Data | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
| (Dollars in thousands, except per-share data) | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | Change | % Change | |||||||||||||||||||||
| Earnings per Share | ||||||||||||||||||||||||||||
| Basic earnings per share: | ||||||||||||||||||||||||||||
| Weighted-average common shares and fully vested equity awards | 52,642,881 | 51,786,679 | 50,081,730 | 49,061,165 | 48,549,580 | (4,093,301 | ) | -7.8 | % | |||||||||||||||||||
| Net income | $ | 43,401 | $ | 49,173 | $ | 49,350 | $ | 47,948 | $ | 45,176 | $ | 1,776 | 4.1 | % | ||||||||||||||
| Less income attributable to unvested participating securities | (444 | ) | (366 | ) | (379 | ) | (374 | ) | (370 | ) | 74 | 16.7 | % | |||||||||||||||
| Net income used in computing basic EPS | $ | 42,956 | $ | 48,806 | $ | 48,971 | $ | 47,574 | $ | 44,806 | $ | 1,850 | 4.3 | % | ||||||||||||||
| Basic earnings per share | $ | 0.82 | $ | 0.94 | $ | 0.98 | $ | 0.97 | $ | 0.92 | $ | 0.11 | 13.1 | % | ||||||||||||||
| Net operating income | $ | 42,566 | $ | 48,791 | $ | 49,521 | $ | 50,174 | $ | 45,680 | $ | 3,114 | 7.3 | % | ||||||||||||||
| Less operating income attributable to unvested participating securities | (436 | ) | (363 | ) | (381 | ) | (392 | ) | (375 | ) | 61 | 14.1 | % | |||||||||||||||
| Net operating income used in computing basic operating EPS | $ | 42,131 | $ | 48,427 | $ | 49,140 | $ | 49,782 | $ | 45,306 | $ | 3,175 | 7.5 | % | ||||||||||||||
| Basic operating income per share | $ | 0.80 | $ | 0.94 | $ | 0.98 | $ | 1.01 | $ | 0.93 | $ | 0.13 | 16.6 | % | ||||||||||||||
| Diluted earnings per share: | ||||||||||||||||||||||||||||
| Weighted-average common shares and fully vested equity awards | 52,642,881 | 51,786,679 | 50,081,730 | 49,061,165 | 48,549,580 | (4,093,301 | ) | -7.8 | % | |||||||||||||||||||
| Dilutive impact of options | 48,104 | 25,292 | 21,792 | 31,685 | 24,090 | (24,014 | ) | -49.9 | % | |||||||||||||||||||
| Shares used to calculate diluted EPS | 52,690,985 | 51,811,971 | 50,103,522 | 49,092,850 | 48,573,670 | (4,117,315 | ) | -7.8 | % | |||||||||||||||||||
| Net income | $ | 43,401 | $ | 49,173 | $ | 49,350 | $ | 47,948 | $ | 45,176 | $ | 1,776 | 4.1 | % | ||||||||||||||
| Less income attributable to unvested participating securities | (444 | ) | (366 | ) | (379 | ) | (374 | ) | (370 | ) | 74 | 16.6 | % | |||||||||||||||
| Net income used in computing diluted EPS | $ | 42,957 | $ | 48,807 | $ | 48,971 | $ | 47,574 | $ | 44,806 | $ | 1,850 | 4.3 | % | ||||||||||||||
| Diluted earnings per share | $ | 0.82 | $ | 0.94 | $ | 0.98 | $ | 0.97 | $ | 0.92 | $ | 0.11 | 13.1 | % | ||||||||||||||
| Net operating income | $ | 42,566 | $ | 48,791 | $ | 49,521 | $ | 50,174 | $ | 45,680 | $ | 3,114 | 7.3 | % | ||||||||||||||
| Less operating income attributable to unvested participating securities | (435 | ) | (363 | ) | (381 | ) | (392 | ) | (374 | ) | 61 | 14.0 | % | |||||||||||||||
| Net operating income used in computing diluted operating EPS | $ | 42,131 | $ | 48,427 | $ | 49,140 | $ | 49,782 | $ | 45,306 | $ | 3,175 | 7.5 | % | ||||||||||||||
| Diluted operating income per share | $ | 0.80 | $ | 0.93 | $ | 0.98 | $ | 1.01 | $ | 0.93 | $ | 0.13 | 16.7 | % | ||||||||||||||
Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | YOY Q1 | |||||||||||||||||||||||
Change | % Change | |||||||||||||||||||||||||||
| Annualized Return on Equity | ||||||||||||||||||||||||||||
| Average stockholders' equity | $ | 1,242,274 | $ | 1,218,524 | $ | 1,172,153 | $ | 1,146,226 | $ | 1,159,266 | $ | (83,008 | ) | -6.7 | % | |||||||||||||
| Average adjusted stockholders' equity | $ | 1,163,881 | $ | 1,146,414 | $ | 1,116,605 | $ | 1,105,300 | $ | 1,118,909 | $ | (44,972 | ) | -3.9 | % | |||||||||||||
| Net income return on stockholders' equity | 14.0 | % | 16.1 | % | 16.8 | % | 16.7 | % | 15.6 | % | 1.6 | % | nm | |||||||||||||||
| Net income return on adjusted stockholders' equity | 14.9 | % | 17.2 | % | 17.7 | % | 17.4 | % | 16.2 | % | 1.2 | % | nm | |||||||||||||||
| Net operating income return on adjusted stockholders' equity | 14.6 | % | 17.0 | % | 17.7 | % | 18.2 | % | 16.3 | % | 1.7 | % | nm | |||||||||||||||
| Capital Structure | ||||||||||||||||||||||||||||
Debt-to-capital (1) | 23.1 | % | 23.7 | % | 24.5 | % | 24.5 | % | 24.1 | % | 1.0 | % | nm | |||||||||||||||
| Cash and invested assets to stockholders' equity | 1.8 | x | 1.9 | x | 2.0 | x | 2.0 | x | 2.0 | x | 0.2 | x | nm | |||||||||||||||
| Cash and invested assets to adjusted stockholders' equity | 2.0 | x | 2.0 | x | 2.1 | x | 2.1 | x | 2.1 | x | 0.1 | x | nm | |||||||||||||||
Share count, end of period (2) | 51,554,770 | 50,110,938 | 48,571,139 | 48,296,623 | 47,295,175 | (4,259,595 | ) | -8.3 | % | |||||||||||||||||||
| Adjusted stockholders' equity per share | $ | 22.43 | $ | 22.68 | $ | 22.58 | $ | 23.06 | $ | 23.77 | $ | 1.34 | 6.0 | % | ||||||||||||||
| Financial Strength Ratings - Primerica Life Insurance Co | ||||||||||||||||||||||||||||
| Moody's | A2 | A2 | A2 | A2 | A2 | nm | nm | |||||||||||||||||||||
| S&P | AA- | AA- | AA- | AA- | AA- | nm | nm | |||||||||||||||||||||
| A.M. Best | A+ | A+ | A+ | A+ | A+ | nm | nm | |||||||||||||||||||||
| Holding Company Senior Debt Ratings | ||||||||||||||||||||||||||||
| Moody's | Baa2 | Baa2 | Baa2 | Baa2 | Baa2 | nm | nm | |||||||||||||||||||||
| S&P | A- | A- | A- | A- | A- | nm | nm | |||||||||||||||||||||
| A.M. Best | a- | a- | a- | a- | a- | nm | nm | |||||||||||||||||||||
| (1) | Debt-to-capital is that of the parent company only. Capital in the debt-to-capital ratio includes stockholders' equity and the note payable. |
| (2) | Share count reflects outstanding common shares, including restricted shares, but excludes restricted stock units (RSUs). |
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Statements of Income | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
| (Dollars in thousands) | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Statement of Income | ||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Direct premiums | $ | 577,458 | $ | 588,248 | $ | 587,882 | $ | 591,856 | $ | 597,130 | $ | 19,672 | 3.4 | % | ||||||||||||||
| Ceded premiums | (397,541 | ) | (406,854 | ) | (393,987 | ) | (396,838 | ) | (395,333 | ) | 2,207 | 0.6 | % | |||||||||||||||
| Net premiums | 179,918 | 181,394 | 193,895 | 195,018 | 201,797 | 21,879 | 12.2 | % | ||||||||||||||||||||
| Net investment income | 21,173 | 19,075 | 18,715 | 17,546 | 21,238 | 65 | 0.3 | % | ||||||||||||||||||||
| Commissions and fees: | ||||||||||||||||||||||||||||
Sales-based (1) | 60,035 | 63,072 | 56,418 | 57,859 | 56,220 | (3,815 | ) | -6.4 | % | |||||||||||||||||||
Asset-based (2) | 56,837 | 59,144 | 58,794 | 57,144 | 55,306 | (1,530 | ) | -2.7 | % | |||||||||||||||||||
Account-based (3) | 10,452 | 10,994 | 11,445 | 11,605 | 11,309 | 857 | 8.2 | % | ||||||||||||||||||||
| Other commissions and fees | 5,511 | 5,939 | 5,711 | 6,185 | 5,987 | 475 | 8.6 | % | ||||||||||||||||||||
| Realized investment (losses) gains | 1,284 | 597 | (259 | ) | (3,361 | ) | (783 | ) | (2,068 | ) | nm | |||||||||||||||||
| Other, net | 9,635 | 10,301 | 11,105 | 12,132 | 11,889 | 2,254 | 23.4 | % | ||||||||||||||||||||
| Total revenues | 344,845 | 350,517 | 355,824 | 354,128 | 362,962 | 18,118 | 5.3 | % | ||||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Benefits and claims | 82,500 | 82,521 | 88,599 | 85,694 | 90,977 | 8,476 | 10.3 | % | ||||||||||||||||||||
| Amortization of DAC | 36,213 | 36,383 | 40,797 | 44,334 | 43,129 | 6,916 | 19.1 | % | ||||||||||||||||||||
| Insurance commissions | 3,189 | 4,145 | 4,619 | 4,388 | 4,147 | 958 | 30.0 | % | ||||||||||||||||||||
| Insurance expenses | 34,348 | 28,744 | 30,261 | 29,667 | 33,311 | (1,037 | ) | -3.0 | % | |||||||||||||||||||
| Sales commissions: | ||||||||||||||||||||||||||||
Sales-based (1) | 42,442 | 44,595 | 40,036 | 40,809 | 40,327 | (2,115 | ) | -5.0 | % | |||||||||||||||||||
Asset-based (2) | 23,251 | 24,059 | 24,374 | 23,802 | 23,093 | (158 | ) | -0.7 | % | |||||||||||||||||||
| Other sales commissions | 2,764 | 2,845 | 2,991 | 2,925 | 3,222 | 458 | 16.6 | % | ||||||||||||||||||||
| Interest expense | 8,676 | 8,642 | 8,718 | 7,471 | 7,173 | (1,503 | ) | -17.3 | % | |||||||||||||||||||
| Other operating expenses | 44,652 | 41,759 | 40,475 | 42,644 | 47,370 | 2,718 | 6.1 | % | ||||||||||||||||||||
| Total benefits and expenses | 278,036 | 273,692 | 280,871 | 281,735 | 292,749 | 14,714 | 5.3 | % | ||||||||||||||||||||
| Income before income taxes | 66,809 | 76,825 | 74,953 | 72,393 | 70,213 | 3,404 | 5.1 | % | ||||||||||||||||||||
| Income taxes | 23,408 | 27,653 | 25,603 | 24,445 | 25,037 | 1,628 | 7.0 | % | ||||||||||||||||||||
| Net income | $ | 43,401 | $ | 49,173 | $ | 49,350 | $ | 47,948 | $ | 45,176 | $ | 1,776 | 4.1 | % | ||||||||||||||
| Income Before Income Taxes by Segment | ||||||||||||||||||||||||||||
| Term Life | $ | 36,076 | $ | 44,689 | $ | 46,519 | $ | 45,925 | $ | 46,081 | $ | 10,005 | 27.7 | % | ||||||||||||||
| Investment & Savings Products | 35,044 | 37,746 | 34,811 | 38,482 | 31,691 | (3,353 | ) | -9.6 | % | |||||||||||||||||||
| Corporate & Other Distributed Products | (4,310 | ) | (5,610 | ) | (6,377 | ) | (12,014 | ) | (7,558 | ) | (3,248 | ) | -75.4 | % | ||||||||||||||
| Income before income taxes | $ | 66,809 | $ | 76,825 | $ | 74,953 | $ | 72,393 | $ | 70,213 | $ | 3,404 | 5.1 | % | ||||||||||||||
| (1) | Sales-based - revenues or commission expenses relating to the sales of mutual funds and variable annuities |
| (2) | Asset-based - revenues or commission expenses relating to the value of assets in client accounts for which we earn ongoing service, distribution, and other fees |
| (3) | Account-based - revenues relating to the fee generating client accounts we administer |
6 of 16
Reconciliation of Statement of Income Non-GAAP to GAAP Financial Measures | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | ||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||
| Reconciliation from Term Life Adjusted Direct Premiums to Term Life Direct Premiums | ||||||||||||||||||||||||||||
| Term Life adjusted direct premiums | $ | 237,430 | $ | 247,889 | $ | 256,026 | $ | 259,700 | $ | 267,750 | $ | 30,319 | 12.8 | % | ||||||||||||||
| Premiums ceded to IPO Coinsurers | 331,733 | 331,984 | 323,501 | 324,870 | 321,494 | (10,239 | ) | -3.1 | % | |||||||||||||||||||
| Term Life direct premiums | $ | 569,164 | $ | 579,873 | $ | 579,527 | $ | 584,570 | $ | 589,244 | $ | 20,081 | 3.5 | % | ||||||||||||||
| Reconciliation from Term Life Other Ceded Premiums to Term Life Ceded Premiums | ||||||||||||||||||||||||||||
| Term Life other ceded premiums | $ | (63,389 | ) | $ | (72,227 | ) | $ | (67,939 | ) | $ | (69,310 | ) | $ | (71,776 | ) | $ | (8,388 | ) | -13.2 | % | ||||||||
| Premiums ceded to IPO Coinsurers | (331,733 | ) | (331,984 | ) | (323,501 | ) | (324,870 | ) | (321,494 | ) | 10,239 | 3.1 | % | |||||||||||||||
| Term Life ceded premiums | $ | (395,122 | ) | $ | (404,211 | ) | $ | (391,440 | ) | $ | (394,179 | ) | $ | (393,271 | ) | $ | 1,851 | 0.5 | % | |||||||||
| Reconciliation from Operating Revenues to Total Revenues | ||||||||||||||||||||||||||||
| Operating revenues | $ | 343,560 | $ | 349,920 | $ | 356,083 | $ | 357,489 | $ | 363,745 | $ | 20,185 | 5.9 | % | ||||||||||||||
| Realized investment gains/(losses) | 1,284 | 597 | (259 | ) | (3,361 | ) | (783 | ) | nm | nm | ||||||||||||||||||
| Total revenues | $ | 344,845 | $ | 350,517 | $ | 355,824 | $ | 354,128 | $ | 362,962 | $ | 18,118 | 5.3 | % | ||||||||||||||
| Reconciliation from Operating Income Before Income Taxes to Income Before Income Taxes | ||||||||||||||||||||||||||||
| Operating income before income taxes | $ | 65,525 | $ | 76,228 | $ | 75,212 | $ | 75,754 | $ | 70,996 | $ | 5,471 | 8.4 | % | ||||||||||||||
| Operating income before income taxes reconciling items: | ||||||||||||||||||||||||||||
| Realized investment gains/(losses) | 1,284 | 597 | (259 | ) | (3,361 | ) | (783 | ) | nm | nm | ||||||||||||||||||
| Total operating income before income taxes reconciling items | 1,284 | 597 | (259 | ) | (3,361 | ) | (783 | ) | nm | nm | ||||||||||||||||||
| Income before income taxes | $ | 66,809 | $ | 76,825 | $ | 74,953 | $ | 72,393 | $ | 70,213 | $ | 3,404 | 5.1 | % | ||||||||||||||
| Reconciliation from Net Operating Income to Net Income | ||||||||||||||||||||||||||||
| Net operating income | $ | 42,566 | $ | 48,791 | $ | 49,521 | $ | 50,174 | $ | 45,680 | $ | 3,114 | 7.3 | % | ||||||||||||||
| Net operating income reconciling items: | ||||||||||||||||||||||||||||
| Operating income before income taxes reconciling items | 1,284 | 597 | (259 | ) | (3,361 | ) | (783 | ) | nm | nm | ||||||||||||||||||
| Tax impact of operating income reconciling items at effective tax rate | (450 | ) | (215 | ) | 88 | 1,135 | 279 | nm | nm | |||||||||||||||||||
| Total net operating income reconciling items | 834 | 382 | (170 | ) | (2,226 | ) | (504 | ) | nm | nm | ||||||||||||||||||
| Net income | $ | 43,401 | $ | 49,173 | $ | 49,350 | $ | 47,948 | $ | 45,176 | $ | 1,776 | 4.1 | % | ||||||||||||||
7 of 16
Segment Operating Results | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
| (Dollars in thousands) | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Term Life Insurance | ||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Direct Premiums | $ | 569,164 | $ | 579,873 | $ | 579,527 | $ | 584,570 | $ | 589,244 | $ | 20,081 | 3.5 | % | ||||||||||||||
Premiums ceded to IPO coinsurers (1) | (331,733 | ) | (331,984 | ) | (323,501 | ) | (324,870 | ) | (321,494 | ) | 10,239 | 3.1 | % | |||||||||||||||
Adjusted direct premiums (2) | 237,430 | 247,889 | 256,026 | 259,700 | 267,750 | 30,319 | 12.8 | % | ||||||||||||||||||||
Other ceded premiums (3) | (63,389 | ) | (72,227 | ) | (67,939 | ) | (69,310 | ) | (71,776 | ) | (8,388 | ) | -13.2 | % | ||||||||||||||
| Net premiums | 174,042 | 175,662 | 188,087 | 190,390 | 195,973 | 21,932 | 12.6 | % | ||||||||||||||||||||
| Allocated net investment income | 1,405 | 1,436 | 1,508 | 1,639 | 1,850 | 445 | 31.7 | % | ||||||||||||||||||||
| Other, net | 6,749 | 7,291 | 7,605 | 8,136 | 8,455 | 1,706 | 25.3 | % | ||||||||||||||||||||
| Operating revenues | 182,195 | 184,389 | 197,200 | 200,165 | 206,278 | 24,083 | 13.2 | % | ||||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Benefits and claims | 77,990 | 78,268 | 83,816 | 82,158 | 86,795 | 8,805 | 11.3 | % | ||||||||||||||||||||
| Amortization of DAC | 35,017 | 32,797 | 37,263 | 42,903 | 41,224 | 6,207 | 17.7 | % | ||||||||||||||||||||
| Insurance commissions | 601 | 1,382 | 1,084 | 1,180 | 968 | 367 | 61.0 | % | ||||||||||||||||||||
| Insurance expenses | 32,511 | 27,253 | 28,516 | 27,999 | 31,210 | (1,301 | ) | -4.0 | % | |||||||||||||||||||
| Operating benefits and expenses | 146,119 | 139,700 | 150,680 | 154,240 | 160,198 | 14,078 | 9.6 | % | ||||||||||||||||||||
| Operating income before income taxes | $ | 36,076 | $ | 44,689 | $ | 46,519 | $ | 45,925 | $ | 46,081 | $ | 10,005 | 27.7 | % | ||||||||||||||
| Investment & Savings Products | ||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Commissions and fees: | ||||||||||||||||||||||||||||
| Sales-based | $ | 60,035 | $ | 63,072 | $ | 56,418 | $ | 57,859 | $ | 56,220 | $ | (3,815 | ) | -6.4 | % | |||||||||||||
| Asset-based | 56,837 | 59,144 | 58,794 | 57,144 | 55,306 | (1,530 | ) | -2.7 | % | |||||||||||||||||||
| Account-based | 10,452 | 10,994 | 11,445 | 11,605 | 11,309 | 857 | 8.2 | % | ||||||||||||||||||||
| Other, net | 1,751 | 1,870 | 2,000 | 2,799 | 2,200 | 450 | 25.7 | % | ||||||||||||||||||||
| Operating revenues | 129,074 | 135,081 | 128,657 | 129,408 | 125,035 | (4,039 | ) | -3.1 | % | |||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Amortization of DAC | 1,201 | 2,901 | 3,299 | 552 | 1,919 | 718 | 59.8 | % | ||||||||||||||||||||
| Insurance commissions | 1,971 | 2,182 | 2,957 | 2,731 | 2,631 | 660 | 33.5 | % | ||||||||||||||||||||
| Sales commissions: | ||||||||||||||||||||||||||||
| Sales-based | 42,442 | 44,595 | 40,036 | 40,809 | 40,327 | (2,115 | ) | -5.0 | % | |||||||||||||||||||
| Asset-based | 23,251 | 24,059 | 24,374 | 23,802 | 23,093 | (158 | ) | -0.7 | % | |||||||||||||||||||
| Other operating expenses | 25,166 | 23,599 | 23,180 | 23,032 | 25,374 | 208 | 0.8 | % | ||||||||||||||||||||
| Operating benefits and expenses | 94,031 | 97,335 | 93,846 | 90,925 | 93,345 | (686 | ) | -0.7 | % | |||||||||||||||||||
| Operating income before income taxes | $ | 35,044 | $ | 37,746 | $ | 34,811 | $ | 38,482 | $ | 31,691 | $ | (3,353 | ) | -9.6 | % | |||||||||||||
| Corporate & Other Distributed Products | ||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Direct premiums | $ | 8,295 | $ | 8,376 | $ | 8,355 | $ | 7,286 | $ | 7,886 | $ | (409 | ) | -4.9 | % | |||||||||||||
| Ceded premiums | (2,419 | ) | (2,644 | ) | (2,547 | ) | (2,658 | ) | (2,063 | ) | 356 | 14.7 | % | |||||||||||||||
| Net premiums | 5,876 | 5,732 | 5,808 | 4,628 | 5,823 | (52 | ) | -0.9 | % | |||||||||||||||||||
| Allocated net investment income | 19,768 | 17,640 | 17,207 | 15,907 | 19,389 | (380 | ) | -1.9 | % | |||||||||||||||||||
| Commissions and fees: | ||||||||||||||||||||||||||||
| Loans | 42 | 43 | 37 | 40 | 44 | 2 | 4.6 | % | ||||||||||||||||||||
| DebtWatchers | 307 | 311 | 303 | 299 | 282 | (25 | ) | -8.2 | % | |||||||||||||||||||
| Prepaid Legal Services | 2,468 | 2,494 | 2,527 | 2,579 | 2,650 | 182 | 7.4 | % | ||||||||||||||||||||
| Auto and Homeowners Insurance | 1,770 | 2,096 | 1,841 | 2,201 | 1,757 | (12 | ) | -0.7 | % | |||||||||||||||||||
| Long-Term Care Insurance | 534 | 583 | 558 | 599 | 713 | 180 | 33.6 | % | ||||||||||||||||||||
| Other sales commissions | 391 | 412 | 445 | 466 | 540 | 149 | 38.1 | % | ||||||||||||||||||||
| Other, net | 1,135 | 1,140 | 1,500 | 1,197 | 1,233 | 98 | 8.6 | % | ||||||||||||||||||||
| Operating revenues | 32,291 | 30,450 | 30,227 | 27,916 | 32,432 | 141 | 0.4 | % | ||||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Benefits and claims | 4,510 | 4,253 | 4,783 | 3,536 | 4,182 | (329 | ) | -7.3 | % | |||||||||||||||||||
| Amortization of DAC | (5 | ) | 685 | 235 | 880 | (15 | ) | (9 | ) | nm | ||||||||||||||||||
| Insurance commissions | 617 | 581 | 578 | 477 | 548 | (68 | ) | -11.1 | % | |||||||||||||||||||
| Insurance expenses | 1,837 | 1,491 | 1,745 | 1,668 | 2,101 | 264 | 14.4 | % | ||||||||||||||||||||
| Sales commissions | 2,764 | 2,845 | 2,991 | 2,925 | 3,222 | 458 | 16.6 | % | ||||||||||||||||||||
| Interest expense | 8,676 | 8,642 | 8,718 | 7,471 | 7,173 | (1,503 | ) | -17.3 | % | |||||||||||||||||||
| Other operating expenses | 19,486 | 18,160 | 17,296 | 19,612 | 21,995 | 2,510 | 12.9 | % | ||||||||||||||||||||
| Operating benefits and expenses | 37,885 | 36,657 | 36,345 | 36,569 | 39,207 | 1,322 | 3.5 | % | ||||||||||||||||||||
| Operating income before income taxes | $ | (5,595 | ) | $ | (6,207 | ) | $ | (6,118 | ) | $ | (8,653 | ) | $ | (6,775 | ) | $ | (1,181 | ) | -21.1 | % | ||||||||
| (1) | Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements |
| (2) | Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers |
| (3) | Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers |
8 of 16
Term Life Insurance - Financial Results and Analysis | PRIMERICA, INC. Financial Supplement |
| (Dollars in thousands) | YOY Q1 | |||||||||||||||||||||||||||
| Term Life Insurance Operating Income Before Income Taxes | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Direct Premiums | $ | 569,164 | $ | 579,873 | $ | 579,527 | $ | 584,570 | $ | 589,244 | $ | 20,081 | 3.5 | % | ||||||||||||||
Premiums ceded to IPO coinsurers (1) | (331,733 | ) | (331,984 | ) | (323,501 | ) | (324,870 | ) | (321,494 | ) | 10,239 | 3.1 | % | |||||||||||||||
Adjusted direct premiums (2) | 237,430 | 247,889 | 256,026 | 259,700 | 267,750 | 30,319 | 12.8 | % | ||||||||||||||||||||
Other ceded premiums (3) | (63,389 | ) | (72,227 | ) | (67,939 | ) | (69,310 | ) | (71,776 | ) | (8,388 | ) | -13.2 | % | ||||||||||||||
| Net premiums | 174,042 | 175,662 | 188,087 | 190,390 | 195,973 | 21,932 | 12.6 | % | ||||||||||||||||||||
| Allocated net investment income | 1,405 | 1,436 | 1,508 | 1,639 | 1,850 | 445 | 31.7 | % | ||||||||||||||||||||
| Other, net | 6,749 | 7,291 | 7,605 | 8,136 | 8,455 | 1,706 | 25.3 | % | ||||||||||||||||||||
| Operating revenues | 182,195 | 184,389 | 197,200 | 200,165 | 206,278 | 24,083 | 13.2 | % | ||||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Benefits and claims | 77,990 | 78,268 | 83,816 | 82,158 | 86,795 | 8,805 | 11.3 | % | ||||||||||||||||||||
| Amortization of DAC | 35,017 | 32,797 | 37,263 | 42,903 | 41,224 | 6,207 | 17.7 | % | ||||||||||||||||||||
| Insurance commissions | 601 | 1,382 | 1,084 | 1,180 | 968 | 367 | 61.0 | % | ||||||||||||||||||||
| Insurance expenses | 32,511 | 27,253 | 28,516 | 27,999 | 31,210 | (1,301 | ) | -4.0 | % | |||||||||||||||||||
| Operating benefits and expenses | 146,119 | 139,700 | 150,680 | 154,240 | 160,198 | 14,078 | 9.6 | % | ||||||||||||||||||||
| Operating income before income taxes | $ | 36,076 | $ | 44,689 | $ | 46,519 | $ | 45,925 | $ | 46,081 | $ | 10,005 | 27.7 | % | ||||||||||||||
| Total Term Life Insurance - Financial Analysis | ||||||||||||||||||||||||||||
Primary direct premiums (4) | $ | 156,714 | $ | 167,118 | $ | 177,307 | $ | 180,664 | $ | 189,540 | $ | 32,826 | 20.9 | % | ||||||||||||||
Legacy direct premiums (5) | 412,449 | 412,754 | 402,220 | 403,906 | 399,704 | (12,745 | ) | -3.1 | % | |||||||||||||||||||
| Total direct premiums | $ | 569,164 | $ | 579,873 | $ | 579,527 | $ | 584,570 | $ | 589,244 | $ | 20,081 | 3.5 | % | ||||||||||||||
| Premiums ceded to IPO coinsurers | $ | 331,733 | $ | 331,984 | $ | 323,501 | $ | 324,870 | $ | 321,494 | $ | (10,239 | ) | -3.1 | % | |||||||||||||
| % of Legacy direct premiums | 80.4 | % | 80.4 | % | 80.4 | % | 80.4 | % | 80.4 | % | nm | nm | ||||||||||||||||
Benefits and claims, net (6) | $ | 141,379 | $ | 150,494 | $ | 151,755 | $ | 151,468 | $ | 158,571 | $ | 17,193 | 12.2 | % | ||||||||||||||
| % of adjusted direct premiums | 59.5 | % | 60.7 | % | 59.3 | % | 58.3 | % | 59.2 | % | nm | nm | ||||||||||||||||
| DAC amortization & insurance commissions | $ | 35,619 | $ | 34,179 | $ | 38,347 | $ | 44,083 | $ | 42,193 | $ | 6,574 | 18.5 | % | ||||||||||||||
| % of adjusted direct premiums | 15.0 | % | 13.8 | % | 15.0 | % | 17.0 | % | 15.8 | % | nm | nm | ||||||||||||||||
Insurance expenses, net (7) | $ | 25,762 | $ | 19,962 | $ | 20,912 | $ | 19,863 | $ | 22,755 | $ | (3,007 | ) | -11.7 | % | |||||||||||||
| % of adjusted direct premiums | 10.9 | % | 8.1 | % | 8.2 | % | 7.6 | % | 8.5 | % | nm | nm | ||||||||||||||||
| Total Term Life operating income before income taxes | $ | 36,076 | $ | 44,689 | $ | 46,519 | $ | 45,925 | $ | 46,081 | $ | 10,005 | 27.7 | % | ||||||||||||||
Term Life operating margin (8) | 15.2 | % | 18.0 | % | 18.2 | % | 17.7 | % | 17.2 | % | nm | nm | ||||||||||||||||
| (1) | Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements |
| (2) | Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers |
| (3) | Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers |
| (4) | Primary direct premiums - direct premiums not subject to the 2010 IPO coinsurance transactions |
| (5) | Legacy direct premiums - direct premiums subject to the 2010 IPO coinsurance transactions |
| (6) | Benefits and claims, net - benefits & claims net of other ceded premiums which are largely YRT |
| (7) | Insurance expenses, net - insurance expenses net of other net revenues |
| (8) | Term Life operating margin - Term Life operating income before income taxes as a percentage of adjusted direct premiums |
9 of 16
Term Life Insurance - Key Statistics | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
| (Dollars in thousands, except as noted) | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Key Statistics | ||||||||||||||||||||||||||||
| Life-insurance licensed sales force, beginning of period | 98,358 | 98,145 | 101,008 | 104,702 | 106,710 | 8,352 | 8.5 | % | ||||||||||||||||||||
| New life-licensed representatives | 7,486 | 10,439 | 11,160 | 10,547 | 9,666 | 2,180 | 29.1 | % | ||||||||||||||||||||
| Non-renewal and terminated representatives | (7,699 | ) | (7,576 | ) | (7,466 | ) | (8,539 | ) | (8,156 | ) | (457 | ) | -5.9 | % | ||||||||||||||
| Life-insurance licensed sales force, end of period | 98,145 | 101,008 | 104,702 | 106,710 | 108,220 | 10,075 | 10.3 | % | ||||||||||||||||||||
Estimated annualized issued term life premium ($mills) (1): | ||||||||||||||||||||||||||||
| Premium from new policies | $ | 45.1 | $ | 55.3 | $ | 54.5 | $ | 57.4 | $ | 54.0 | $ | 8.9 | 19.6 | % | ||||||||||||||
| Additions and increases in premium | 12.8 | 14.0 | 13.7 | 14.4 | 14.0 | 1.2 | 9.2 | % | ||||||||||||||||||||
| Total estimated annualized issued term life premium | $ | 57.9 | $ | 69.3 | $ | 68.2 | $ | 71.8 | $ | 68.0 | $ | 10.0 | 17.3 | % | ||||||||||||||
| Issued term life policies | 55,677 | 68,097 | 66,658 | 69,627 | 66,376 | 10,699 | 19.2 | % | ||||||||||||||||||||
Estimated average annualized issued term life premium per policy (1)(2) | $ | 811 | $ | 813 | $ | 817 | $ | 825 | $ | 814 | $ | 3 | 0.4 | % | ||||||||||||||
| Term life face amount in-force, beginning of period ($mills) | $ | 681,927 | $ | 678,517 | $ | 688,163 | $ | 689,316 | $ | 693,194 | $ | 11,267 | 1.7 | % | ||||||||||||||
| Issued term life face amount (3) | 17,181 | 20,585 | 20,321 | 21,023 | 19,790 | 2,609 | 15.2 | % | ||||||||||||||||||||
| Terminated term life face amount | (13,344 | ) | (12,064 | ) | (13,659 | ) | (14,513 | ) | (13,814 | ) | (470 | ) | -3.5 | % | ||||||||||||||
| Foreign currency impact, net | (7,247 | ) | 1,125 | (5,509 | ) | (2,632 | ) | 5,462 | 12,709 | nm | ||||||||||||||||||
| Term life face amount in-force, end of period | $ | 678,517 | $ | 688,163 | $ | 689,316 | $ | 693,194 | $ | 704,632 | $ | 26,115 | 3.8 | % | ||||||||||||||
| (1) | Estimated annualized issued term life premium - estimated as average premium per $1,000 of face amounts issued on new policies and additions (before free look returns) multiplied by actual face amount issued on new policies, rider additions and face amount increases. |
| (2) | In whole dollars |
| (3) | Issued term life face amount - includes face amount on issued term life policies, additional riders added to existing policies, and face increases under increasing benefit riders |
10 of 16
Investment and Savings Products - Financial Results and Financial Analysis | PRIMERICA, INC. Financial Supplement |
| (Dollars in thousands, except as noted) | YOY Q1 | |||||||||||||||||||||||||||
| Investment & Savings Products Operating Income Before Income Taxes | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| Commissions and fees: | ||||||||||||||||||||||||||||
| Sales-based | $ | 60,035 | $ | 63,072 | $ | 56,418 | $ | 57,859 | $ | 56,220 | $ | (3,815 | ) | -6.4 | % | |||||||||||||
| Asset-based | 56,837 | 59,144 | 58,794 | 57,144 | 55,306 | (1,530 | ) | -2.7 | % | |||||||||||||||||||
| Account-based | 10,452 | 10,994 | 11,445 | 11,605 | 11,309 | 857 | 8.2 | % | ||||||||||||||||||||
| Other, net | 1,751 | 1,870 | 2,000 | 2,799 | 2,200 | 450 | 25.7 | % | ||||||||||||||||||||
| Operating revenues | 129,074 | 135,081 | 128,657 | 129,408 | 125,035 | (4,039 | ) | -3.1 | % | |||||||||||||||||||
| Benefits and expenses: | ||||||||||||||||||||||||||||
| Amortization of DAC | 1,201 | 2,901 | 3,299 | 552 | 1,919 | 718 | 59.8 | % | ||||||||||||||||||||
| Insurance commissions | 1,971 | 2,182 | 2,957 | 2,731 | 2,631 | 660 | 33.5 | % | ||||||||||||||||||||
| Sales commissions: | ||||||||||||||||||||||||||||
| Sales-based | 42,442 | 44,595 | 40,036 | 40,809 | 40,327 | (2,115 | ) | -5.0 | % | |||||||||||||||||||
| Asset-based | 23,251 | 24,059 | 24,374 | 23,802 | 23,093 | (158 | ) | -0.7 | % | |||||||||||||||||||
| Other operating expenses | 25,166 | �� | 23,599 | 23,180 | 23,032 | 25,374 | 208 | 0.8 | % | |||||||||||||||||||
| Operating benefits and expenses | 94,031 | 97,335 | 93,846 | 90,925 | 93,345 | (686 | ) | -0.7 | % | |||||||||||||||||||
| Operating income before income taxes | $ | 35,044 | $ | 37,746 | $ | 34,811 | $ | 38,482 | $ | 31,691 | $ | (3,353 | ) | -9.6 | % | |||||||||||||
| Financial Analysis | ||||||||||||||||||||||||||||
| Fees paid based on client asset values (1) | $ | 4,674 | $ | 4,828 | $ | 4,540 | $ | 4,429 | $ | 4,298 | $ | (376 | ) | -8.1 | % | |||||||||||||
| Fees paid based on fee-generating accounts (2) | 3,172 | 3,439 | 3,464 | 3,483 | 3,495 | 323 | 10.2 | % | ||||||||||||||||||||
| Other operating expenses | 17,320 | 15,332 | 15,175 | 15,120 | 17,582 | 262 | 1.5 | % | ||||||||||||||||||||
| Total other operating expenses | $ | 25,166 | $ | 23,599 | $ | 23,180 | $ | 23,032 | $ | 25,374 | $ | 208 | 0.8 | % | ||||||||||||||
| Sales-based net revenue as % of revenue-generating sales (3) | ||||||||||||||||||||||||||||
| U.S. | 1.36 | % | 1.34 | % | 1.38 | % | 1.38 | % | 1.31 | % | nm | nm | ||||||||||||||||
| Canada | 1.09 | % | 1.07 | % | 0.97 | % | 0.96 | % | 1.10 | % | nm | nm | ||||||||||||||||
| Total | 1.32 | % | 1.31 | % | 1.33 | % | 1.33 | % | 1.28 | % | nm | nm | ||||||||||||||||
| Asset-based net revenue as % of average asset values (4) | ||||||||||||||||||||||||||||
| U.S. | 0.036 | % | 0.037 | % | 0.037 | % | 0.036 | % | 0.036 | % | nm | nm | ||||||||||||||||
| Canada | 0.134 | % | 0.118 | % | 0.111 | % | 0.146 | % | 0.124 | % | nm | nm | ||||||||||||||||
| Total | 0.053 | % | 0.051 | % | 0.049 | % | 0.054 | % | 0.050 | % | nm | nm | ||||||||||||||||
Account-based net revenue per average fee generating account (5)(6) | $ | 2.70 | $ | 2.68 | $ | 2.81 | $ | 2.85 | $ | 2.74 | nm | nm | ||||||||||||||||
(1) | Fees paid based on client asset values - administration fees on Canadian Segregated Funds and advisory fees on Managed Accounts that vary directly with client asset values |
(2) | Fees paid based on fee-generating accounts - recordkeeping fees that vary with the number of fee-generating accounts |
(3) | Sales-based net revenue - commission and fee revenue less commissions paid to the sales force based on product sales activity |
| (4) | Asset-based net revenue - commission and fee revenue less administration and advisory fees paid to third-party providers and commissions paid to the sales force earned based on product account values including amortization of deferred acquisition costs for segregated funds |
| (5) | Account-based net revenue - fee revenue less recordkeeping fees paid to third-party providers based on fee-generating accounts |
| (6) | In whole dollars |
11 of 16
Investment and Savings Products - Key Statistics | PRIMERICA, INC. Financial Supplement |
| (Dollars in thousands, except as noted) | YOY Q1 | |||||||||||||||||||||||||||
| Key Statistics | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
Product sales ($mills) | ||||||||||||||||||||||||||||
| U.S. Retail Mutual Funds | $ | 641.2 | $ | 698.7 | $ | 597.4 | $ | 620.0 | $ | 599.9 | $ | (41.3 | ) | -6.4 | % | |||||||||||||
| Canada Retail Mutual Funds | 214.5 | 170.2 | 158.4 | 158.7 | 209.6 | (4.8 | ) | -2.2 | % | |||||||||||||||||||
| Indexed Annuities | 73.7 | 91.2 | 75.3 | 80.2 | 84.4 | 10.7 | 14.6 | % | ||||||||||||||||||||
| Variable Annuities and other | 405.0 | 452.2 | 404.3 | 422.2 | 349.4 | (55.6 | ) | -13.7 | % | |||||||||||||||||||
| Total sales-based revenue generating product sales | 1,334.3 | 1,412.2 | 1,235.4 | 1,281.0 | 1,243.3 | (90.9 | ) | -6.8 | % | |||||||||||||||||||
| Managed Accounts | 66.1 | 72.2 | 57.1 | 51.4 | 45.2 | (20.9 | ) | -31.6 | % | |||||||||||||||||||
| Segregated Funds | 114.4 | 82.4 | 74.2 | 76.1 | 87.3 | (27.1 | ) | -23.7 | % | |||||||||||||||||||
| Total product sales | $ | 1,514.8 | $ | 1,566.8 | $ | 1,366.8 | $ | 1,408.6 | $ | 1,375.9 | $ | (138.9 | ) | -9.2 | % | |||||||||||||
| Canada Retail Mutual Funds | $ | 214.5 | $ | 170.2 | $ | 158.4 | $ | 158.7 | $ | 209.6 | $ | (4.8 | ) | -2.2 | % | |||||||||||||
| Segregated Funds | 114.4 | 82.4 | 74.2 | 76.1 | 87.3 | (27.1 | ) | -23.7 | % | |||||||||||||||||||
| Total Canada product sales | 328.8 | 252.6 | 232.7 | 234.8 | 297.0 | (31.9 | ) | -9.7 | % | |||||||||||||||||||
| Total U.S. product sales | 1,185.9 | 1,314.2 | 1,134.1 | 1,173.8 | 1,078.9 | (107.0 | ) | -9.0 | % | |||||||||||||||||||
| Total product sales | $ | 1,514.8 | $ | 1,566.8 | $ | 1,366.8 | $ | 1,408.6 | $ | 1,375.9 | $ | (138.9 | ) | -9.2 | % | |||||||||||||
| Client asset values, beginning of period ($mills) | $ | 48,656 | $ | 49,195 | $ | 49,372 | $ | 45,848 | $ | 47,353 | $ | (1,303 | ) | -2.7 | % | |||||||||||||
| Inflows | 1,515 | 1,567 | 1,367 | 1,409 | 1,376 | (139 | ) | -9.2 | % | |||||||||||||||||||
Outflows (1) | (1,246 | ) | (1,267 | ) | (1,168 | ) | (1,163 | ) | (1,153 | ) | 93 | 7.4 | % | |||||||||||||||
| Net flows | 269 | 300 | 199 | 245 | 223 | (46 | ) | nm | ||||||||||||||||||||
| Foreign currency impact, net | (734 | ) | 122 | (581 | ) | (263 | ) | 555 | 1,290 | nm | ||||||||||||||||||
Change in market value, net and other (2) | 1,004 | (245 | ) | (3,142 | ) | 1,523 | 43 | (961 | ) | nm | ||||||||||||||||||
| Client asset values, end of period | $ | 49,195 | $ | 49,372 | $ | 45,848 | $ | 47,353 | $ | 48,174 | $ | (1,021 | ) | -2.1 | % | |||||||||||||
| Annualized net flows as % of beginning of period asset values | 2.2 | % | 2.4 | % | 1.6 | % | 2.1 | % | 1.9 | % | -0.3 | % | nm | |||||||||||||||
Average client asset values ($mills) | ||||||||||||||||||||||||||||
| U.S. Retail Mutual Funds | $ | 24,787 | $ | 25,099 | $ | 24,208 | $ | 24,008 | $ | 23,390 | $ | (1,397 | ) | -5.6 | % | |||||||||||||
| Canada Retail Mutual Funds | 6,035 | 6,177 | 5,808 | 5,593 | 5,478 | (558 | ) | -9.2 | % | |||||||||||||||||||
| Managed Accounts | 1,446 | 1,526 | 1,532 | 1,567 | 1,582 | 136 | 9.4 | % | ||||||||||||||||||||
| Indexed Annuities | 1,089 | 1,162 | 1,230 | 1,296 | 1,366 | 277 | 25.4 | % | ||||||||||||||||||||
| Variable Annuities and other | 12,995 | 13,313 | 12,980 | 12,965 | 12,711 | (284 | ) | -2.2 | % | |||||||||||||||||||
| Segregated Funds | 2,390 | 2,381 | 2,205 | 2,112 | 2,120 | (270 | ) | -11.3 | % | |||||||||||||||||||
| Total | $ | 48,743 | $ | 49,658 | $ | 47,963 | $ | 47,542 | $ | 46,646 | $ | (2,097 | ) | -4.3 | % | |||||||||||||
| Canada Retail Mutual Funds | $ | 6,035 | $ | 6,177 | $ | 5,808 | $ | 5,593 | $ | 5,478 | $ | (558 | ) | -9.2 | % | |||||||||||||
| Segregated Funds | 2,390 | 2,381 | 2,205 | 2,112 | 2,120 | (270 | ) | -11.3 | % | |||||||||||||||||||
| Total Canada average client assets | 8,425 | 8,558 | 8,014 | 7,705 | 7,597 | (828 | ) | -9.8 | % | |||||||||||||||||||
| Total U.S. average client assets | 40,317 | 41,100 | 39,950 | 39,837 | 39,049 | (1,269 | ) | -3.1 | % | |||||||||||||||||||
| Total average client assets | $ | 48,743 | $ | 49,658 | $ | 47,963 | $ | 47,542 | $ | 46,646 | $ | (2,097 | ) | -4.3 | % | |||||||||||||
Average number of fee-generating accounts (thous) (3) | ||||||||||||||||||||||||||||
| Recordkeeping and custodial accounts | 2,067 | 2,165 | 2,179 | 2,188 | 2,191 | 124 | 6.0 | % | ||||||||||||||||||||
| Recordkeeping only accounts | 628 | 657 | 662 | 664 | 666 | 38 | 6.0 | % | ||||||||||||||||||||
| Total | 2,695 | 2,822 | 2,841 | 2,853 | 2,857 | 162 | 6.0 | % | ||||||||||||||||||||
| (1) | Asset value outflows - include (a) redemptions of assets, (b) sales charges on the inflow sales figures, and (c) the net flow of money market funds sold and redeemed on the company's recordkeeping platform. The redemptions of assets must be estimated for approximately 4% of account values as these figures are not readily available. Actual redemptions as a percentage of account values for similar known account values are used to estimate the unknown redemption values. |
| (2) | Change in market value, net - market value fluctuations net of fees and expenses |
| (3) | Fee generating accounts - mutual fund accounts for which we receive recording keeping and/or custodial fees |
12 of 16
Investment Portfolio - Summary of Holdings | PRIMERICA, INC. Financial Supplement |
| As of or for the period ended March 31, 2016 | ||||||||||||||||||||||||||||
| % of Total | Avg | |||||||||||||||||||||||||||
| Market | Amortized | Unrealized | Market | Amortized | Book | Avg | ||||||||||||||||||||||
| (Dollars in thousands) | Value | Cost | G/(L) | Value | Cost | Yield | Rating | |||||||||||||||||||||
| Investment Portfolio by Asset Class | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 175,717 | $ | 175,717 | $ | - | 9.1 | % | 9.4 | % | ||||||||||||||||||
| Fixed Income: | ||||||||||||||||||||||||||||
| Treasury | 29,285 | 27,581 | 1,705 | 1.5 | % | 1.5 | % | 2.29 | % | AAA | ||||||||||||||||||
| Government | 148,678 | 139,860 | 8,819 | 7.7 | % | 7.5 | % | 4.07 | % | AA- | ||||||||||||||||||
| Tax-Exempt Municipal | 3,535 | 4,025 | (490 | ) | 0.2 | % | 0.2 | % | 3.07 | % | BBB | |||||||||||||||||
| Corporate | 1,187,104 | 1,146,005 | 41,099 | 61.2 | % | 61.5 | % | 4.69 | % | BBB+ | ||||||||||||||||||
| Mortgage-Backed | 93,271 | 86,155 | 7,116 | 4.8 | % | 4.6 | % | 4.58 | % | AAA | ||||||||||||||||||
| Asset-Backed | 42,977 | 42,626 | 351 | 2.2 | % | 2.3 | % | 1.55 | % | AA+ | ||||||||||||||||||
| CMBS | 104,379 | 100,265 | 4,114 | 5.4 | % | 5.4 | % | 3.26 | % | AAA | ||||||||||||||||||
| Private | 98,325 | 95,733 | 2,592 | 5.1 | % | 5.1 | % | 4.92 | % | BBB- | ||||||||||||||||||
| Redeemable Preferred | 2,927 | 3,007 | (80 | ) | 0.2 | % | 0.2 | % | 16.05 | % | BBB | |||||||||||||||||
| Convertible | 2,842 | 2,574 | 269 | 0.1 | % | 0.1 | % | 4.92 | % | BBB | ||||||||||||||||||
| Total Fixed Income | 1,713,324 | 1,647,830 | 65,494 | 88.4 | % | 88.4 | % | 4.46 | % | A- | ||||||||||||||||||
| Equities: | ||||||||||||||||||||||||||||
| Perpetual Preferred | 16,267 | 14,966 | 1,301 | 0.8 | % | 0.8 | % | |||||||||||||||||||||
| Common Stock | 21,175 | 14,744 | 6,431 | 1.1 | % | 0.8 | % | |||||||||||||||||||||
| Mutual Fund | 6,562 | 4,900 | 1,662 | 0.3 | % | 0.3 | % | |||||||||||||||||||||
| Other | 5,549 | 5,549 | - | 0.3 | % | 0.3 | % | |||||||||||||||||||||
| Total Equities | 49,554 | 40,159 | 9,395 | 2.6 | % | 2.2 | % | |||||||||||||||||||||
| Total Invested Assets | $ | 1,938,595 | $ | 1,863,706 | $ | 74,889 | 100.0 | % | 100.0 | % | ||||||||||||||||||
| Corporate Portfolio by Sector | ||||||||||||||||||||||||||||
| Energy | $ | 143,470 | $ | 147,927 | $ | (4,457 | ) | 12.1 | % | 12.9 | % | |||||||||||||||||
| Reits | 129,841 | 121,493 | 8,349 | 10.9 | % | 10.6 | % | |||||||||||||||||||||
| Consumer Non Cyclical | 126,403 | 123,233 | 3,170 | 10.6 | % | 10.8 | % | |||||||||||||||||||||
| Banking | 123,833 | 118,378 | 5,456 | 10.4 | % | 10.3 | % | |||||||||||||||||||||
| Technology | 95,909 | 93,177 | 2,732 | 8.1 | % | 8.1 | % | |||||||||||||||||||||
| Basic Industry | 91,156 | 89,368 | 1,787 | 7.7 | % | 7.8 | % | |||||||||||||||||||||
| Electric | 90,295 | 86,237 | 4,058 | 7.6 | % | 7.5 | % | |||||||||||||||||||||
| Insurance | 79,070 | 74,666 | 4,404 | 6.7 | % | 6.5 | % | |||||||||||||||||||||
| Communications | 76,107 | 71,135 | 4,972 | 6.4 | % | 6.2 | % | |||||||||||||||||||||
| Capital Goods | 69,138 | 65,358 | 3,781 | 5.8 | % | 5.7 | % | |||||||||||||||||||||
| Consumer Cyclical | 57,015 | 54,561 | 2,454 | 4.8 | % | 4.8 | % | |||||||||||||||||||||
| Transportation | 35,757 | 34,707 | 1,049 | 3.0 | % | 3.0 | % | |||||||||||||||||||||
| Brokerage | 30,281 | 28,733 | 1,548 | 2.6 | % | 2.5 | % | |||||||||||||||||||||
| Finance Companies | 12,311 | 11,743 | 569 | 1.0 | % | 1.0 | % | |||||||||||||||||||||
| Natural Gas | 9,980 | 9,307 | 673 | 0.8 | % | 0.8 | % | |||||||||||||||||||||
| Industrial Other | 9,448 | 8,890 | 558 | 0.8 | % | 0.8 | % | |||||||||||||||||||||
| Financial Other | 6,042 | 6,095 | (54 | ) | 0.5 | % | 0.5 | % | ||||||||||||||||||||
| Utility Other | 1,048 | 997 | 51 | 0.1 | % | 0.1 | % | |||||||||||||||||||||
| Total Corporate portfolio | $ | 1,187,104 | $ | 1,146,005 | $ | 41,099 | 100.0 | % | 100.0 | % | ||||||||||||||||||
| Fixed-Maturity Securities - Effective Maturity | ||||||||||||||||||||||||||||
| Effective maturity | ||||||||||||||||||||||||||||
| < 1 Yr. | $ | 115,021 | $ | 114,002 | $ | 1,019 | 6.7 | % | 6.9 | % | 3.01 | % | ||||||||||||||||
| 1-2 Yrs. | 153,351 | 148,416 | 4,936 | 9.0 | % | 9.0 | % | 4.94 | % | |||||||||||||||||||
| 2-5 Yrs. | 718,410 | 678,304 | 40,106 | 41.9 | % | 41.2 | % | 4.80 | % | |||||||||||||||||||
| 5-10 Yrs. | 675,205 | 659,523 | 15,683 | 39.4 | % | 40.0 | % | 4.18 | % | |||||||||||||||||||
| > 10 Yrs. | 51,336 | 47,586 | 3,750 | 3.0 | % | 2.9 | % | 5.28 | % | |||||||||||||||||||
| Total Fixed Income | $ | 1,713,324 | $ | 1,647,830 | $ | 65,494 | 100.0 | % | 100.0 | % | 4.46 | % | ||||||||||||||||
| Duration | ||||||||||||||||||||||||||||
| Fixed Income portfolio duration | 4.1 | years | ||||||||||||||||||||||||||
Note: Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.
13 of 16
Investment Portfolio - Quality Ratings As of March 31, 2016 | PRIMERICA, INC. Financial Supplement |
| (Dollars in thousands) | ||||||||||||||||||
| Investment Portfolio Quality Ratings (1) | ||||||||||||||||||
Amortized Cost | % of Total | |||||||||||||||||
| Total Fixed Income portfolio: | ||||||||||||||||||
Rating | ||||||||||||||||||
| AAA | $ | 274,389 | 16.7 | % | ||||||||||||||
| AA | 133,892 | 8.1 | % | |||||||||||||||
| A | 371,000 | 22.5 | % | |||||||||||||||
| BBB | 762,989 | 46.3 | % | |||||||||||||||
| Below Investment Grade | 105,259 | 6.4 | % | |||||||||||||||
| NA | 301 | 0.0 | % | |||||||||||||||
| Total Fixed Income | $ | 1,647,830 | 100.0 | % | ||||||||||||||
Amortized Cost | % of Total | Amortized Cost | % of Total | |||||||||||||||
| Corporate asset class: | Private asset class: | |||||||||||||||||
Rating | Rating | |||||||||||||||||
| AAA | $ | 7,874 | 0.7 | % | AAA | $ | 2,398 | 2.5 | % | |||||||||
| AA | 60,274 | 5.3 | % | AA | 1,978 | 2.1 | % | |||||||||||
| A | 324,891 | 28.3 | % | A | 84,190 | 87.9 | % | |||||||||||
| BBB | 664,826 | 58.0 | % | BBB | 7,166 | 7.5 | % | |||||||||||
| Below Investment Grade | 88,037 | 7.7 | % | Below Investment Grade | - | — | ||||||||||||
| NA | 103 | 0.0 | % | NA | - | — | ||||||||||||
| Total Corporate | $ | 1,146,005 | 100.0 | % | Total Private | $ | 95,733 | 100.0 | % | |||||||||
| CMBS asset class: | Mortgage-Backed asset class: | |||||||||||||||||
Rating | Rating | |||||||||||||||||
| AAA | $ | 96,194 | 95.9 | % | AAA | $ | 81,613 | 94.7 | % | |||||||||
| AA | 2,813 | 2.8 | % | AA | 1,788 | 2.1 | % | |||||||||||
| A | - | — | A | 1,574 | 1.8 | % | ||||||||||||
| BBB | 1,257 | 1.3 | % | BBB | 1,181 | 1.4 | % | |||||||||||
| Below Investment Grade | - | — | Below Investment Grade | - | — | |||||||||||||
| NA | - | — | NA | - | — | |||||||||||||
| Total CMBS | $ | 100,265 | 100.0 | % | Total Mortgage-Backed | $ | 86,155 | 100.0 | % | |||||||||
| Asset-Backed asset class: | Treasury & Government asset classes: | |||||||||||||||||
Rating | Rating | |||||||||||||||||
| AAA | $ | 33,585 | 78.8 | % | AAA | $ | 54,559 | 32.6 | % | |||||||||
| AA | 5,834 | 13.7 | % | AA | 63,401 | 37.9 | % | |||||||||||
| A | 2,954 | 6.9 | % | A | 35,593 | 21.3 | % | |||||||||||
| BBB | 27 | 0.1 | % | BBB | 8,038 | 4.8 | % | |||||||||||
| Below Investment Grade | 227 | 0.5 | % | Below Investment Grade | 5,850 | 3.5 | % | |||||||||||
| NA | - | — | NA | - | — | |||||||||||||
| Total Asset-Backed | $ | 42,626 | 100.0 | % | Total Treasury & Government | $ | 167,441 | 100.0 | % | |||||||||
| NAIC Designations | ||||||||||||||||||
| 1 | $ | 588,894 | 43.0 | % | ||||||||||||||
| 2 | 675,085 | 49.3 | % | |||||||||||||||
| 3 | 77,644 | 5.7 | % | |||||||||||||||
| 4 | 16,377 | 1.2 | % | |||||||||||||||
| 5 | 9,230 | 0.7 | % | |||||||||||||||
| 6 | 1,691 | 0.1 | % | |||||||||||||||
U.S. Insurer Fixed Income (2) | 1,368,921 | 100.0 | % | |||||||||||||||
Other (3) | 319,069 | |||||||||||||||||
| Cash and cash equivalents | 175,717 | |||||||||||||||||
| Total Invested Assets | $ | 1,863,706 | ||||||||||||||||
| (1) | Ratings method for split ratings: If by 2 NRSROs, use lower of the two; if by 3 or more NRSROs, use second lowest |
| (2) | NAIC ratings for our U.S. insurance companies' fixed income portfolios |
| (3) | Other consists of assets held by our non-life companies, Canadian insurance company, and unrated equities |
Note: Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.
14 of 16
Investment Portfolio - Supplemental Data and Trends | PRIMERICA, INC. Financial Supplement |
| YOY Q1 | ||||||||||||||||||||||||||||
| (Dollars in thousands) | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | $ Change | % Change | |||||||||||||||||||||
| Net Investment Income by Source | ||||||||||||||||||||||||||||
| Fixed-maturity securities (available-for-sale) | $ | 19,795 | $ | 19,551 | $ | 18,786 | $ | 19,140 | $ | 19,249 | (546 | ) | -2.8 | % | ||||||||||||||
| Fixed-maturity securities (held-to-maturity) | 2,475 | 2,707 | 3,772 | 4,094 | 4,154 | 1,679 | 67.8 | % | ||||||||||||||||||||
| Equity Securities | 516 | 503 | 514 | 526 | 520 | 4 | 0.8 | % | ||||||||||||||||||||
| Deposit asset underlying 10% reinsurance treaty | 1,672 | (116 | ) | 220 | (1,294 | ) | 2,200 | 528 | 31.6 | % | ||||||||||||||||||
| Policy loans and other invested assets | 359 | 337 | 354 | 318 | 330 | (29 | ) | -8.1 | % | |||||||||||||||||||
| Cash & cash equivalents | 43 | 47 | 51 | 87 | 149 | 106 | nm | |||||||||||||||||||||
| Total investment income | 24,860 | 23,029 | 23,697 | 22,871 | 26,602 | 1,742 | 7.0 | % | ||||||||||||||||||||
| Investment expenses | 1,212 | 1,247 | 1,210 | 1,231 | 1,210 | (2 | ) | -0.2 | % | |||||||||||||||||||
| Interest Expense on Surplus Note | 2,475 | 2,707 | 3,772 | 4,094 | 4,154 | 1,679 | 67.8 | % | ||||||||||||||||||||
| Net investment income | $ | 21,173 | $ | 19,075 | $ | 18,715 | $ | 17,546 | $ | 21,238 | 65 | 0.3 | % | |||||||||||||||
| Fixed income book yield, end of period | 4.53 | % | 4.51 | % | 4.54 | % | 4.40 | % | 4.46 | % | ||||||||||||||||||
| New money yield | 2.47 | % | 2.57 | % | 3.39 | % | 2.26 | % | 3.14 | % | ||||||||||||||||||
| YOY Q1 | ||||||||||||||||||||||||||||
Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | % Pt Change | |||||||||||||||||||||||
| Fixed Income Portfolio Quality Ratings | ||||||||||||||||||||||||||||
Rating | ||||||||||||||||||||||||||||
| AAA | 17.3 | % | 16.6 | % | 16.0 | % | 17.2 | % | 16.7 | % | -0.6 | % | ||||||||||||||||
| AA | 6.9 | % | 6.5 | % | 6.8 | % | 7.4 | % | 8.1 | % | 1.2 | % | ||||||||||||||||
| A | 22.4 | % | 22.6 | % | 22.1 | % | 22.8 | % | 22.5 | % | 0.1 | % | ||||||||||||||||
| BBB | 47.8 | % | 48.9 | % | 49.4 | % | 47.3 | % | 46.3 | % | -1.5 | % | ||||||||||||||||
| Below Investment Grade | 5.6 | % | 5.2 | % | 5.6 | % | 5.3 | % | 6.4 | % | 0.8 | % | ||||||||||||||||
| NA | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | -0.0 | % | ||||||||||||||||
| Total Fixed Income | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | nm | |||||||||||||||||
| Average rating by amortized cost | A | A | A- | A- | A- | na | ||||||||||||||||||||||
| As of March 31, 2016 | As of March 31, 2016 | As of March 31, 2016 | |||||||||||||||||||||||||||||||||||||
Market Value | Amortized Cost | Credit Rating | Market Value | Amortized Cost | Market Value | Amortized Cost | |||||||||||||||||||||||||||||||||
| Top 25 Exposures | Foreign Exposure (1) | Government Investments (1) | |||||||||||||||||||||||||||||||||||||
| 1 | Canada | $ | 26,112 | $ | 24,546 | AAA | Australia | $ | 53,694 | $ | 52,266 | AAA | $ | 750 | $ | 750 | |||||||||||||||||||||||
| 2 | General Electric Co | 15,031 | 14,845 | AA+ | United Kingdom | 45,154 | 43,402 | AA | 11,851 | 11,282 | |||||||||||||||||||||||||||||
| 3 | Wells Fargo & Co | 13,352 | 12,835 | A | Canada | 40,680 | 39,944 | A | 17,066 | 16,049 | |||||||||||||||||||||||||||||
| 4 | Province of Ontario Canada | 9,629 | 8,960 | AA- | Bermuda | 15,531 | 15,073 | BBB | 8,155 | 8,038 | |||||||||||||||||||||||||||||
| 5 | National Rural Utilities Cooperative | 9,311 | 7,765 | A | Switzerland | 14,991 | 15,088 | Below Investment Grade | 5,369 | 5,850 | |||||||||||||||||||||||||||||
| 6 | Iberdrola SA | 9,080 | 8,473 | BBB | France | 14,722 | 14,008 | NA | 0 | 0 | |||||||||||||||||||||||||||||
| 7 | Anheuser-Busch InBev SA/NV | 8,490 | 7,855 | A- | Netherlands | 14,143 | 13,769 | Total | $ | 43,191 | $ | 41,969 | |||||||||||||||||||||||||||
| 8 | National Fuel Gas Co | 8,409 | 8,064 | BBB | Belgium | 13,094 | 11,723 | ||||||||||||||||||||||||||||||||
| 9 | AT&T Inc | 8,178 | 6,968 | BBB+ | Ireland | 12,014 | 10,999 | ||||||||||||||||||||||||||||||||
| 10 | TransCanada Corp | 8,084 | 7,930 | A | Brazil | 11,586 | 12,483 | Non-Government Investments (1) | |||||||||||||||||||||||||||||||
| 11 | US Bancorp | 7,847 | 7,379 | A- | Germany | 8,756 | 8,358 | ||||||||||||||||||||||||||||||||
| 12 | Bank of America Corp | 7,704 | 7,581 | A- | Japan | 7,953 | 7,696 | AAA | $ | — | $ | — | |||||||||||||||||||||||||||
| 13 | Macquarie Group Ltd | 7,693 | 7,313 | BBB- | Korea Republic Of | 6,743 | 6,389 | AA | 14,880 | 14,321 | |||||||||||||||||||||||||||||
| 14 | HSBC Holdings PLC | 7,440 | 7,223 | A | Luxembourg | 6,279 | 5,913 | A | 87,383 | 83,622 | |||||||||||||||||||||||||||||
| 15 | Prudential Financial Inc | 7,400 | 7,159 | A | Mexico | 6,129 | 5,826 | BBB | 152,117 | 147,369 | |||||||||||||||||||||||||||||
| 16 | Ingram Micro Inc | 6,798 | 6,667 | BBB- | Emerging Markets (2) | 15,569 | 15,000 | Below Investment Grade | 22,993 | 22,906 | |||||||||||||||||||||||||||||
| 17 | Republic of Korea | 6,743 | 6,389 | AA- | All Other | 34,022 | 32,645 | NA | 495 | 393 | |||||||||||||||||||||||||||||
| 18 | Intel Corp | 6,358 | 6,038 | A+ | Total | $ | 321,059 | $ | 310,581 | Total | $ | 277,869 | $ | 268,612 | |||||||||||||||||||||||||
| 19 | ArcelorMittal | 6,279 | 5,913 | BB | |||||||||||||||||||||||||||||||||||
| 20 | Altria Group Inc | 6,240 | 5,221 | BBB+ | |||||||||||||||||||||||||||||||||||
| 21 | Discovery Communications Inc | 6,168 | 5,783 | BBB- | |||||||||||||||||||||||||||||||||||
| 22 | Discover Financial Services | 5,871 | 5,176 | BBB- | |||||||||||||||||||||||||||||||||||
| 23 | Washington Real Estate Investment | 5,870 | 5,695 | BBB | |||||||||||||||||||||||||||||||||||
| 24 | Avnet Inc | 5,862 | 5,491 | BBB- | |||||||||||||||||||||||||||||||||||
| 25 | International Business Machines | 5,860 | 5,426 | AA- | |||||||||||||||||||||||||||||||||||
| Total | $ | 215,812 | $ | 202,693 | |||||||||||||||||||||||||||||||||||
| % of total fixed income portfolio | 11.1 | % | 10.9 | % | |||||||||||||||||||||||||||||||||||
| (1) | US$ denominated investments in issuers outside of the United States based on country of risk |
| (2) | Emerging markets is as defined by MSCI, Inc. which include Chile, India, Peru, Poland and South Africa |
| Note: Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet. |
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Five-Year Historical Key Statistics | PRIMERICA, INC. Financial Supplement |
| (Dollars in millions) | 2011 | 2012 | 2013 | 2014 | 2015 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 | ||||||||||||||||||||||||||||||
| Recruits | 244,756 | 191,752 | 186,251 | 190,439 | 228,115 | 53,300 | 60,246 | 65,945 | 48,624 | 63,427 | ||||||||||||||||||||||||||||||
| Life-insurance licensed sales force, beginning of period | 94,850 | 91,176 | 92,373 | 95,566 | 98,358 | 98,358 | 98,145 | 101,008 | 104,702 | 106,710 | ||||||||||||||||||||||||||||||
| New life-licensed representatives | 33,711 | 34,425 | 34,155 | 33,832 | 39,632 | 7,486 | 10,439 | 11,160 | 10,547 | 9,666 | ||||||||||||||||||||||||||||||
| Non-renewal and terminated representatives | (37,385 | ) | (33,228 | ) | (30,962 | ) | (31,040 | ) | (31,280 | ) | (7,699 | ) | (7,576 | ) | (7,466 | ) | (8,539 | ) | (8,156 | ) | ||||||||||||||||||||
| Life-insurance licensed sales force, end of period | 91,176 | 92,373 | 95,566 | 98,358 | 106,710 | 98,145 | 101,008 | 104,702 | 106,710 | 108,220 | ||||||||||||||||||||||||||||||
| Issued term life policies | 237,535 | 222,558 | 214,617 | 220,984 | 260,059 | 55,677 | 68,097 | 66,658 | 69,627 | 66,376 | ||||||||||||||||||||||||||||||
| Issued term life face amount | $ | 73,146 | $ | 68,053 | $ | 67,783 | $ | 69,574 | $ | 79,111 | $ | 17,181 | $ | 20,585 | $ | 20,321 | $ | 21,023 | $ | 19,790 | ||||||||||||||||||||
| Term life face amount in force, beginning of period | $ | 656,791 | $ | 664,955 | $ | 670,412 | $ | 674,868 | $ | 681,927 | $ | 681,927 | $ | 678,517 | $ | 688,163 | $ | 689,316 | $ | 693,194 | ||||||||||||||||||||
| Issued term life face amount | 73,146 | 68,053 | 67,783 | 69,574 | 79,111 | 17,181 | 20,585 | 20,321 | 21,023 | 19,790 | ||||||||||||||||||||||||||||||
| Terminated term life face amount | (66,951 | ) | (61,593 | ) | (57,730 | ) | (54,962 | ) | (53,580 | ) | (13,344 | ) | (12,064 | ) | (13,659 | ) | (14,513 | ) | (13,814 | ) | ||||||||||||||||||||
| Foreign currency impact, net | 1,970 | (1,003 | ) | (5,596 | ) | (7,553 | ) | (14,263 | ) | (7,247 | ) | 1,125 | (5,509 | ) | (2,632 | ) | 5,462 | |||||||||||||||||||||||
| Term life face amount in force, end of period | $ | 664,955 | $ | 670,412 | $ | 674,868 | $ | 681,927 | $ | 693,194 | $ | 678,517 | $ | 688,163 | $ | 689,316 | $ | 693,194 | $ | 704,632 | ||||||||||||||||||||
| Estimated annualized issued term life premium | ||||||||||||||||||||||||||||||||||||||||
| Premium from new policies | $ | 187.6 | $ | 176.1 | $ | 173.5 | $ | 179.8 | $ | 212.4 | $ | 45.1 | $ | 55.3 | $ | 54.5 | $ | 57.4 | $ | 54.0 | ||||||||||||||||||||
| Additions and increases in premium | 44.9 | 45.5 | 48.6 | 51.6 | 54.9 | 12.8 | 14.0 | 13.7 | 14.4 | 14.0 | ||||||||||||||||||||||||||||||
| Total estimated annualized issued term life premium | $ | 232.5 | $ | 221.5 | $ | 222.1 | $ | 231.4 | $ | 267.3 | $ | 57.9 | $ | 69.3 | $ | 68.2 | $ | 71.8 | $ | 68.0 | ||||||||||||||||||||
| Investment & Savings product sales | $ | 4,265.1 | $ | 4,712.2 | $ | 5,208.8 | $ | 5,682.3 | $ | 5,856.8 | $ | 1,514.8 | $ | 1,566.8 | $ | 1,366.8 | $ | 1,408.6 | $ | 1,375.9 | ||||||||||||||||||||
| Investment & Savings average client asset values | $ | 34,870 | $ | 35,904 | $ | 41,035 | $ | 46,936 | $ | 48,477 | $ | 48,743 | $ | 49,658 | $ | 47,963 | $ | 47,542 | $ | 46,646 | ||||||||||||||||||||
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