Exhibit 99.2

 

 

 

 

img165194719_0.jpg 

 

Supplemental Financial Information

Third Quarter 2022

 

 

 

 

 

 

 

 

 

 

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 GAAP to non-GAAP financial measures

7-8

Segment operating results

 

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

Senior Health segment - financial results, financial analysis, and key statistics

13

Corporate & Other Distributed Products segment - financial results

14

Investment portfolio

15-17

Five-year historical key statistics

18

 

 

This document may contain forward-looking statements and information. Additional information and factors that could cause actual results to differ materially from any forward-looking statements or information in this document is available in our Form 10-K for the year ended December 31, 2021.

 

2 of 18

 

 

 

Preface

PRIMERICA, INC.

Financial Supplement

 

 

Third Quarter 2022

 

This document is a financial supplement to our third quarter 2022 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:

 

•
Operating adjustments exclude the impact of investment gains/losses, including credit impairments, mark-to-market (MTM) investment adjustments, loss on the extinguishment of debt, transaction-related expenses/recoveries associated with the purchase of e-TeleQuote Insurance, Inc. and subsidiaries (collectively, “e-TeleQuote”), adjustments to share-based compensation expense for shares exchanged in the business combination, and non-cash goodwill impairment charges. We exclude investment gains/losses, including credit impairments, and MTM investment adjustments in measuring adjusted operating revenues to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains and losses and other factors prior to an invested asset's maturity or sale that are not directly associated the Company's insurance operations. We exclude the loss on the extinguishment of debt, e-TeleQuote transaction-related expenses/recoveries, and non-cash goodwill impairment charges in our non-GAAP financial measures as such expenses are non-recurring items that will cause incomparability between period-over-period results. We exclude adjustments to share-based compensation expense for shares exchanged in the business combination to eliminate period-over-period fluctuations that may obscure comparisons of operating results primarily due to the volatility of changes in the fair value of shares, which were ultimately redeemed at zero value. Adjusted operating income before income taxes and adjusted net operating income exclude income attributable to the noncontrolling interest to present only the income that is attributable to stockholders of the Company.

 

•
Adjusted stockholders’ equity refers to the removal of the impact of net unrealized gains and losses on invested assets. We exclude unrealized investment gains and losses in measuring adjusted stockholders' equity as unrealized gains and losses from the Company's invested assets are largely caused by market movements in interest rates and credit spreads that do not necessarily correlate with the cash flows we will ultimately realize when an invested asset matures or is sold.

 

•
IPO coinsurance transactions adjustments relate to transactions in the first quarter of 2010, where we coinsured between 80% and 90% of our business that was in-force at year-end 2009 to entities then affiliated with Citigroup Inc. that were executed concurrent with our initial public offering (IPO). We exclude amounts ceded under the IPO coinsurance transactions in measuring adjusted direct premiums and other ceded premiums to present meaningful comparisons of the actual premiums economically maintained by the Company. Amounts ceded under the IPO coinsurance transactions will continue to decline over time as policies terminate within this block of business.

 

Management utilizes these 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.

 

3 of 18

 

 

 

Condensed Balance Sheets and Reconciliation of Balance Sheet Non-GAAP to GAAP Financial Measures

PRIMERICA, INC.

Financial Supplement

 

(Dollars in thousands)

Dec 31,
2020

 

Mar 31,
2021

 

Jun 30,
2021

 

Sep 30,
2021

 

Dec 31,
2021

 

Mar 31,
2022

 

Jun 30,
2022

 

Sep 30,
2022

 

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments and cash excluding securities held to maturity

$

3,096,703

 

$

3,133,860

 

$

3,431,825

 

$

3,056,395

 

$

3,277,830

 

$

3,191,154

 

$

3,048,974

 

$

2,981,598

 

 

Securities held to maturity

 

1,346,350

 

 

1,362,210

 

 

1,368,740

 

 

1,376,090

 

 

1,379,100

 

 

1,390,310

 

 

1,415,940

 

 

1,433,760

 

 

 

 

Total investments and cash

 

4,443,053

 

 

4,496,070

 

 

4,800,565

 

 

4,432,485

 

 

4,656,930

 

 

4,581,464

 

 

4,464,914

 

 

4,415,358

 

 

Due from reinsurers

 

4,273,904

 

 

4,345,483

 

 

4,239,510

 

 

4,278,322

 

 

4,268,419

 

 

4,240,481

 

 

4,069,039

 

 

4,033,897

 

 

Deferred policy acquisition costs

 

2,629,644

 

 

2,712,169

 

 

2,808,347

 

 

2,877,921

 

 

2,943,782

 

 

2,994,367

 

 

3,028,511

 

 

3,049,102

 

 

Goodwill

 

—

 

 

—

 

 

—

 

 

224,180

 

 

179,154

 

 

179,154

 

 

187,707

 

 

127,707

 

 

Other assets

 

899,165

 

 

921,236

 

 

925,621

 

 

1,330,620

 

 

1,274,946

 

 

1,242,457

 

 

1,219,847

 

 

1,209,471

 

 

Separate account assets

 

2,659,520

 

 

2,638,901

 

 

2,745,827

 

 

2,672,606

 

 

2,799,992

 

 

2,696,891

 

 

2,358,987

 

 

2,206,608

 

 

 

 

Total assets

$

14,905,286

 

$

15,113,858

 

$

15,519,871

 

$

15,816,135

 

$

16,123,222

 

$

15,934,813

 

$

15,329,005

 

$

15,042,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Future policy benefits

$

6,790,557

 

$

6,885,115

 

$

6,984,272

 

$

7,057,599

 

$

7,138,649

 

$

7,216,597

 

$

7,276,278

 

$

7,314,688

 

 

Other policy liabilities

 

984,612

 

 

1,020,349

 

 

977,373

 

 

1,054,925

 

 

1,103,642

 

 

1,108,047

 

 

999,789

 

 

1,005,195

 

 

Income taxes

 

223,496

 

 

235,233

 

 

204,197

 

 

260,264

 

 

241,311

 

 

217,326

 

 

164,971

 

 

129,347

 

 

Other liabilities

 

618,874

 

 

633,719

 

 

641,025

 

 

668,643

 

 

669,631

 

 

683,865

 

 

646,660

 

 

659,582

 

 

Debt obligations

 

374,415

 

 

374,511

 

 

499,606

 

 

514,702

 

 

607,102

 

 

598,303

 

 

592,504

 

 

592,705

 

 

Surplus note

 

1,345,772

 

 

1,361,648

 

 

1,368,194

 

 

1,375,559

 

 

1,378,585

 

 

1,389,811

 

 

1,415,457

 

 

1,433,293

 

 

Payable under securities lending

 

72,154

 

 

87,190

 

 

80,613

 

 

105,264

 

 

94,529

 

 

93,171

 

 

96,603

 

 

80,754

 

 

Separate account liabilities

 

2,659,520

 

 

2,638,901

 

 

2,745,827

 

 

2,672,606

 

 

2,799,992

 

 

2,696,891

 

 

2,358,987

 

 

2,206,608

 

 

 

 

Total liabilities

 

13,069,401

 

 

13,236,666

 

 

13,501,107

 

 

13,709,563

 

 

14,033,442

 

 

14,004,011

 

 

13,551,249

 

 

13,422,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interest

$

—

 

$

—

 

$

—

 

$

7,631

 

$

7,271

 

$

4,616

 

$

2,233

 

$

(0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock ($0.01 par value) (1)

 

393

 

 

394

 

 

394

 

 

395

 

 

394

 

 

388

 

 

378

 

 

370

 

 

Paid-in capital

 

(0

)

 

8,138

 

 

12,880

 

 

17,454

 

 

5,224

 

 

(0

)

 

(0

)

 

(0

)

 

Retained earnings

 

1,705,786

 

 

1,785,037

 

 

1,894,539

 

 

1,988,324

 

 

2,004,506

 

 

1,980,467

 

 

1,948,244

 

 

1,887,952

 

 

Treasury stock

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

Accumulated other comprehensive income (loss), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses)

 

128,128

 

 

77,053

 

 

96,990

 

 

84,701

 

 

63,775

 

 

(66,439

)

 

(175,746

)

 

(252,913

)

 

 

Cumulative translation adjustment

 

1,578

 

 

6,570

 

 

13,960

 

 

8,068

 

 

8,611

 

 

11,769

 

 

2,648

 

 

(15,437

)

 

 

 

Total stockholders’ equity (2)

 

1,835,885

 

 

1,877,192

 

 

2,018,764

 

 

2,098,941

 

 

2,082,510

 

 

1,926,185

 

 

1,775,524

 

 

1,619,971

 

 

 

 

Total liabilities and stockholders' equity

$

14,905,286

 

$

15,113,858

 

$

15,519,871

 

$

15,816,135

 

$

16,123,222

 

$

15,934,813

 

$

15,329,005

 

$

15,042,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Total Stockholders' Equity to Adjusted Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

$

1,835,885

 

$

1,877,192

 

$

2,018,764

 

$

2,098,941

 

$

2,082,510

 

$

1,926,185

 

$

1,775,524

 

$

1,619,971

 

 

Less: Net unrealized gains (losses)

 

128,128

 

 

77,053

 

 

96,990

 

 

84,701

 

 

63,775

 

 

(66,439

)

 

(175,746

)

 

(252,913

)

 

 

 

Adjusted stockholders’ equity

$

1,707,757

 

$

1,800,139

 

$

1,921,774

 

$

2,014,241

 

$

2,018,735

 

$

1,992,624

 

$

1,951,270

 

$

1,872,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Stockholders' Equity Rollforward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

1,614,688

 

$

1,707,757

 

$

1,800,139

 

$

1,921,774

 

$

2,014,241

 

$

2,018,735

 

$

1,992,624

 

$

1,951,270

 

 

Net Income attributable to Primerica, Inc.

 

100,084

 

 

97,872

 

 

128,162

 

 

112,456

 

 

34,868

 

 

81,418

 

 

107,947

 

 

51,807

 

 

Shareholder dividends

 

(15,851

)

 

(18,620

)

 

(18,660

)

 

(18,671

)

 

(18,686

)

 

(21,645

)

 

(21,178

)

 

(20,571

)

 

Retirement of shares and warrants

 

(13,426

)

 

(5,966

)

 

(521

)

 

(88

)

 

(18,829

)

 

(103,862

)

 

(127,963

)

 

(97,515

)

 

Net foreign currency translation adjustment

 

16,398

 

 

4,992

 

 

7,390

 

 

(5,892

)

 

543

 

 

3,158

 

 

(9,121

)

 

(18,086

)

 

Other, net

 

5,864

 

 

14,105

 

 

5,264

 

 

4,662

 

 

6,597

 

 

14,820

 

 

8,961

 

 

5,979

 

Balance, end of period

$

1,707,757

 

$

1,800,139

 

$

1,921,774

 

$

2,014,241

 

$

2,018,735

 

$

1,992,624

 

$

1,951,270

 

$

1,872,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Policy Acquisition Costs Rollforward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

2,532,409

 

$

2,629,644

 

$

2,712,169

 

$

2,808,347

 

$

2,877,921

 

$

2,943,782

 

$

2,994,367

 

$

3,028,511

 

 

General expenses deferred

 

9,510

 

 

10,558

 

 

10,055

 

 

9,248

 

 

9,062

 

 

9,519

 

 

9,321

 

 

9,726

 

 

Commission costs deferred

 

128,084

 

 

134,188

 

 

136,085

 

 

129,287

 

 

124,515

 

 

123,739

 

 

119,794

 

 

119,734

 

 

Amortization of deferred policy acquisition costs

 

(53,342

)

 

(66,105

)

 

(54,286

)

 

(62,214

)

 

(68,575

)

 

(86,063

)

 

(85,379

)

 

(90,925

)

 

Foreign currency impact and other, net

 

12,984

 

 

3,884

 

 

4,324

 

 

(6,748

)

 

858

 

 

3,390

 

 

(9,593

)

 

(17,943

)

Balance, end of period

$

2,629,644

 

$

2,712,169

 

$

2,808,347

 

$

2,877,921

 

$

2,943,782

 

$

2,994,367

 

$

3,028,511

 

$

3,049,102

 

 

(1)
Outstanding common shares exclude restricted stock units.
(2)
Reflects the company's permanent stockholders' equity and does not include temporary stockholders' equity.

 

 

 

4 of 18

 

 

Financial Results and Other Statistical Data

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q3

 

 

 

 

 

YOY YTD

 

(Dollars in thousands, except per-share data)

Q1
2021

 

Q2
2021

 

Q3
2021

 

Q4
2021

 

Q1
2022

 

Q2
2022

 

Q3
2022

 

$/#
Change

 

%
Change

 

YTD
2021

 

YTD
2022

 

$/#
Change

 

%
Change

 

Earnings per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares and fully vested equity awards

 

39,455,948

 

 

39,530,691

 

 

39,560,786

 

 

39,568,470

 

 

39,221,003

 

 

38,385,520

 

 

37,438,254

 

 

(2,122,532

)

 

-5.4

%

 

39,516,193

 

 

38,341,729

 

 

(1,174,464

)

 

-3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Primerica, Inc.

$

97,872

 

$

128,162

 

$

112,456

 

$

34,868

 

$

81,418

 

$

107,947

 

$

51,807

 

$

(60,649

)

 

-53.9

%

$

338,489

 

$

241,172

 

$

(97,317

)

 

-28.8

%

 

Less income attributable to unvested participating securities

 

(417

)

 

(525

)

 

(458

)

 

(141

)

 

(337

)

 

(477

)

 

(244

)

 

214

 

 

46.7

%

 

(1,403

)

 

(1,067

)

 

336

 

 

23.9

%

 

 

Net income used in computing basic EPS

$

97,455

 

$

127,636

 

$

111,997

 

$

34,728

 

$

81,081

 

$

107,470

 

$

51,563

 

$

(60,435

)

 

-54.0

%

$

337,086

 

$

240,105

 

$

(96,981

)

 

-28.8

%

 

 

Basic earnings per share

$

2.47

 

$

3.23

 

$

2.83

 

$

0.88

 

$

2.07

 

$

2.80

 

$

1.38

 

$

(1.45

)

 

-51.4

%

$

8.53

 

$

6.26

 

$

(2.27

)

 

-26.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net operating income

$

97,129

 

$

129,355

 

$

118,708

 

$

117,007

 

$

83,333

 

$

110,701

 

$

113,928

 

$

(4,780

)

 

-4.0

%

$

345,193

 

$

307,962

 

$

(37,231

)

 

-10.8

%

 

Less operating income attributable to unvested participating securities

 

(414

)

 

(530

)

 

(484

)

 

(472

)

 

(345

)

 

(490

)

 

(537

)

 

(53

)

 

-11.0

%

 

(1,431

)

 

(1,362

)

 

68

 

 

4.8

%

 

 

Adjusted net operating income used in computing basic operating EPS

$

96,715

 

$

128,825

 

$

118,224

 

$

116,535

 

$

82,988

 

$

110,212

 

$

113,391

 

$

(4,833

)

 

-4.1

%

$

343,762

 

$

306,599

 

$

(37,163

)

 

-10.8

%

 

 

Basic adjusted operating income per share

$

2.45

 

$

3.26

 

$

2.99

 

$

2.95

 

$

2.12

 

$

2.87

 

$

3.03

 

$

0.04

 

 

1.3

%

$

8.70

 

$

8.00

 

$

(0.70

)

 

-8.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares and fully vested equity awards

 

39,455,948

 

 

39,530,691

 

 

39,560,786

 

 

39,568,470

 

 

39,221,003

 

 

38,385,520

 

 

37,438,254

 

 

(2,122,532

)

 

-5.4

%

 

39,516,193

 

 

38,341,729

 

 

(1,174,464

)

 

-3.0

%

 

Dilutive impact of contingently issuable shares

 

124,505

 

 

121,595

 

 

117,923

 

 

122,929

 

 

110,941

 

 

115,058

 

 

102,810

 

 

(15,113

)

 

-12.8

%

 

121,341

 

 

109,603

 

 

(11,738

)

 

-9.7

%

 

 

Shares used to calculate diluted EPS

 

39,580,453

 

 

39,652,286

 

 

39,678,709

 

 

39,691,399

 

 

39,331,944

 

 

38,500,578

 

 

37,541,064

 

 

(2,137,645

)

 

-5.4

%

 

39,637,534

 

 

38,451,332

 

 

(1,186,202

)

 

-3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Primerica, Inc.

$

97,872

 

$

128,162

 

$

112,456

 

$

34,868

 

$

81,418

 

$

107,947

 

$

51,807

 

$

(60,649

)

 

-53.9

%

$

338,489

 

$

241,172

 

$

(97,317

)

 

-28.8

%

 

Less income attributable to unvested participating securities

 

(416

)

 

(524

)

 

(457

)

 

(140

)

 

(337

)

 

(476

)

 

(244

)

 

213