Exhibit 99.1
 
GRAPHIC
 
PRIMERICA REPORTS SECOND QUARTER 2011 RESULTS

First convention in four years generates momentum with
new product launches and sales force initiatives

Net income of $44.0 million; Diluted EPS of $0.58

21% net operating income growth; Diluted operating EPS of $0.59


Duluth, GA, August 2, 2011 – Primerica, Inc. (NYSE: PRI) announced today financial results for the second quarter ended June 30, 2011.  Total revenues increased by 17% to $275.1 million in the second quarter of 2011, compared with $234.3 million in the second quarter of 2010.  Net income was $44.0 million for the second quarter of 2011, or $0.58 per diluted share.

Operating revenues increased by 17% to $273.1 million in the second quarter of 2011, compared with $233.9 million in the second quarter of 2010.  Net operating income was up 21% to $45.0 million, or $0.59 per diluted share, in the second quarter of 2011, compared with $37.2 million, or $.49 per diluted share, in the second quarter of 2010.  Results were driven by continued growth in New Term premium and strong Investment and Savings Products performance as well as a lower income tax rate partially offset by higher expenses.

Rick Williams, Chairman of the Board and Co-Chief Executive Officer said, “We are pleased to report solid net operating income growth reflecting our strong market position in core businesses.  We continue to focus on developing meaningful shareholder value by growing earnings and building the business to enhance long-term growth.”

John Addison, Chairman of Primerica Distribution and Co-Chief Executive Officer said, “The excitement generated by our convention announcements created a recruiting surge in the last two weeks of June, making June the best recruiting month in the history of the company.  Recruiting momentum carried into July, where we went on to surpass the June recruiting record.”
 
 
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Distribution Results

 
●
Primerica’s first convention in four years was held in June and attended by approximately 40,000 people from the United States, Canada and Puerto Rico.  The sales representatives were excited by the launch of our TermNow insurance product and managed accounts investment product as well as by several new field technology initiatives.  These announcements, combined with a promotion through July lowering the Independent Business Application licensing fee to $50 from $99, have continued to generate a significant surge in recruiting activity post-convention.

 
●
As anticipated, recruiting of new representatives experienced some downward pressure pre-convention during the quarter reflecting the absence of an incentive trip contest in the first half of 2011.  However, recruiting increased significantly in the last two weeks of June following the convention to end the second quarter of 2011 flat, compared with recruiting in the same period a year ago.  The size of our life-licensed insurance sales force was 90,519 at June 30, 2011, a decrease from 96,066 at June 30, 2010 and 92,212 at March 31, 2011.  New life licenses were up 13% to 8,061 from the first quarter of 2011 and declined 18% from 9,887 in the quarter a year ago.  The year-over-year decrease in new life licenses was primarily due to the year-to-date decline in recruiting.

 
●
Term Life net premium grew by 29% to $108.4 million in the second quarter of 2011, compared with $83.8 million in the second quarter of 2010 as we added another quarter of issued life business following the Citi reinsurance transactions.  Life insurance policies issued were flat at 59,826 in the second quarter of 2011, compared with a year ago.  Life insurance policies issued increased by 17% to 59,826 in the second quarter 2011, compared with 51,281 in the first quarter of 2011, reflecting typical seasonality.

 
●
Investment and Savings Products sales continued to grow, up 23% to $1.14 billion in the second quarter of 2011 from $923.3 million in the year ago quarter primarily driven by a 49% increase in variable annuity sales.  Variable annuity sales were positively impacted by clients redeeming older contracts (not incurring surrender charges) to purchase our current Prime Elite IV product that has an attractive guaranteed income living benefit.  The recent addition of annuity clients to our Client Account Manager system has enabled our representatives to revisit existing variable annuity clients who have products that do not have a living benefit.  Improved market conditions drove an increase in client asset values, which grew 21% to $36.02 billion at June 30, 2011 from $29.72 billion at June 30, 2010.


 
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Segment Results

Primerica operates in two primary business segments: Term Life Insurance and Investment and Savings Products, and has a third segment, Corporate and Other Distributed Products.  Results for the segments are shown below.
 
   
Actual
    
Operating (1)
  
      Q2 2011       Q2 2010    
% Change
       Q2 2011       Q2 2010    
% Change
  
Revenues:
  
($ in thousands)
    
($ in thousands)
  
Term Life Insurance
   $ 131,641     $ 108,389       21 %   $ 131,641     $ 108,389       21 %
Investment and Savings Products
     104,586       88,218       19 %     104,586       88,218       19 %
Corporate and Other Distributed Products
     38,868       37,692       3 %     36,833       37,318       -1 %
  Total revenues
   $ 275,095     $ 234,299       17 %   $ 273,060     $ 233,925       17 %
                                                 
Income (loss) before income taxes:
                                                
Term Life Insurance
   $ 45,781     $ 44,095       4 %   $ 45,781     $ 44,095       4 %
Investment and Savings Products
     30,470       26,735       14 %     30,470       26,735       14 %
Corporate and Other Distributed Products
     (8,090 )     (34,492 )     77 %     (6,579 )     (9,409 )     30 %
  Total income before income taxes
   $ 68,161     $ 36,338       88 %   $ 69,672     $ 61,421       13 %
                                                 
(1) See the Non-GAAP Financial Measures section and the Operating Results Reconcilations at the end of this release for additional information.
  
 
Term Life Insurance.  Operating revenues grew by 21%, or $23.3 million, in the second quarter of 2011, compared with the same period a year ago, primarily reflecting incremental New Term premiums following the Citi reinsurance transactions. Operating income before income taxes increased by 4%, or $1.7 million, over the prior year period primarily driven by growth in New Term premium and favorable seasonal persistency partially offset by higher expenses and continued run-off of the Legacy Term block.  The $9.0 million increase in insurance expenses in the second quarter of 2011 includes $3.2 million of expenses associated with convention initiatives, the largest component of which was the write-off of medical testing materials that are now obsolete due to the new TermNow underwriting process.  Premium taxes were $2.1 million higher due to the continued growth in New Term and the impact of a premium tax recovery in 2010.  Legacy Term policies continued to run-off resulting in lower expense allowances of $1.3 million, compared with a year ago.  Mortality experience was slightly favorable during the second quarter of 2011.

Operating income before income taxes decreased by 6%, or $3.1 million, compared with the first quarter of 2011 reflecting higher expenses in the second quarter and a favorable DAC adjustment in the first quarter of 2011, partially offset by the New Term premium growth, seasonally favorable persistency and improved mortality.

Investment and Savings Products.   Operating revenues and operating income before income taxes in the second quarter of 2011 were driven by higher sales and increased client asset values as well as a shift in product sales mix to higher margin U.S. variable annuity products.  DAC amortization on our Canadian segregated funds was also higher due to lower investment returns during the second quarter of 2011.  Operating income before income taxes increased by 14%, or $3.7 million, compared with the second quarter of 2010.
 
 
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Sequentially, operating revenues increased by 4%, or $3.7 million.  Operating income before income taxes decreased by 2%, or $0.6 million, in the second quarter of 2011, compared with the prior quarter primarily due to higher DAC amortization related to Canadian segregated funds and the first quarter 2011 management compensation accrual release partially offset by the effects of higher sales and slightly higher average client assets.

Corporate and Other Distributed Products.  Operating revenues decreased by 1%, or $0.5 million, in the second quarter of 2011 from the second quarter of 2010.  Operating losses before income taxes were $6.6 million in the second quarter of 2011, compared with $9.4 million in the same period of 2010.  The improvement largely reflects lower expenses due to the one-time IPO-related expenses in the prior year and discontinued Citi expense allocations.  Results for second quarter 2011 also reflect higher claims primarily on short-term disability insurance products underwritten by our New York insurance subsidiary.

Taxes
 
Our effective income tax rate for the second quarter of 2011 was 35.4%, compared with 39.4% for the same quarter a year ago.  The higher tax rate in the second quarter of 2010 resulted from permanent differences caused by our IPO-related equity awards granted to Canadian sales force leaders and from other items relating to Canadian earnings that were reversed in the fourth quarter of 2010 when a specific expired provision in the tax law was retroactively extended.
 
Capital and Liquidity

Primerica continues to be well capitalized, with a high-quality invested asset portfolio.  Investments and cash totaled $2.30 billion as of June 30, 2011.  Our invested asset portfolio had a net unrealized gain of $171.1 million (net of unrealized losses of $5.0 million) at June 30, 2011, an increase from a net unrealized gain of $156.1 million at March 31, 2011.  Net realized gains for the quarter were $2.0 million, which included $0.1 million of other-than-temporary impairments. 

As of June 30, 2011, our debt-to-capital ratio remained low at 16.2%, as did our ratio of cash and invested assets to stockholders equity at 1.5x.  Net operating income return on adjusted stockholders’ equity (ROAE) was 12.7% for the quarter ended June 30, 2011, down from 14.2% in the first quarter of 2011 reflecting non-recurring items that enhanced first quarter 2011 ROAE and higher expenses in second quarter of 2011.  Net income return on stockholders’ equity was 11.6% for the second quarter of 2011.

 
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Primerica Life Insurance Company, our primary underwriter, had statutory capital in excess of the applicable statutory requirements to support existing operations and to fund future growth. With a statutory risk-based capital (RBC) ratio estimated to be in excess of 600% as of June 30, 2011, we continue to be well positioned to support anticipated future growth.

Non-GAAP Financial Measures

We report financial results in accordance with U.S. generally accepted accounting principles (GAAP).  We also present operating revenues, operating income before income taxes, net operating income and adjusted stockholders’ equity.  Operating revenues, operating income before income taxes and net operating income exclude the impact of realized investment gains and losses for all periods presented. Operating income before income taxes and net operating income exclude the expense associated with our IPO-related equity awards for all periods presented.  Adjusted stockholders' equity excludes the impact of net unrealized gains and losses on invested assets for all periods presented.  Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies.  Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our financial performance.  Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.  These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP.  Reconciliations of non-GAAP to GAAP financial measures are attached to this release.

Earnings Webcast Information

Primerica will hold a webcast Wednesday, August 3, 2011 at 10:00 am EDT, to discuss second quarter results.  This release and a detailed financial supplement will be posted on Primerica’s website.  Investors are encouraged to review these materials.  To access the webcast go to http://investors.primerica.com at least 15 minutes prior to the event to register, download and install any necessary software.

A replay of the call will be available for approximately 30 days on Primerica’s website, http://investors.primerica.com.

Forward-Looking Statements
 
Except for historical information contained in this press release, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from anticipated or projected results. Those risks and uncertainties include, among others, our failure to continue to attract and license new recruits, retain sales representatives or maintain the licensing of our sales representatives; our or our sales representatives’ violation of or non-compliance with laws and regulations; incorrect assumptions used to price our insurance policies; the failure of our investment products to remain competitive with other investment options; our failure to meet RBC standards or other minimum capital and surplus requirements; a downgrade or potential downgrade in our insurance subsidiaries’ financial strength ratings; inadequate or unaffordable reinsurance or the failure of our reinsurers to perform their obligations; heightened standards of conduct or more stringent licensing requirements for our sales representatives; the inability of our subsidiaries to pay dividends or make distributions; the loss of key personnel; conflicts of interests due to Citi's and Warburg Pincus' significant interests in us; and general changes in economic and financial conditions, including the effects of credit deterioration and interest rate fluctuations on our invested asset portfolio. These and other risks and uncertainties affecting us are more fully described in our filings with the Securities and Exchange Commission, which are available in the "Investor Relations" section of our website at http://investors.primerica.com. Primerica assumes no duty to update its forward-looking statements as of any future date.
 
 
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About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading distributor of financial products to middle-income families in North America.  Primerica representatives assist clients in meeting their needs for term life insurance, mutual funds, loans and other financial products. In addition, Primerica provides an entrepreneurial full or part-time business opportunity for individuals seeking to earn income by distributing its financial products. Primerica insures approximately 4.3 million lives and more than 2 million clients maintain investment accounts with the company.


Investor Contact:
Kathryn Kieser
770-564-7757
Email: investorrelations@primerica.com


Media Contact:
Mark L. Supic
770-564-6329
Email: mark.supic@primerica.com
 
 
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 PRIMERICA, INC.
Condensed Balance Sheets
(In thousands)
 
   
June 30, 2011
    
December 31,
  
   
(Unaudited)
    
2010
  
Assets
            
Investments:
            
Fixed maturity securities available for sale, at fair value
   $ 2,099,236     $ 2,081,361  
Equity securities available for sale, at fair value
     22,786       23,213  
Trading securities, at fair value
     35,877       22,767  
Policy loans and other invested assets
     25,063       26,243  
Total investments
     2,182,962       2,153,584  
Cash and cash equivalents
     114,051       126,038  
Accrued investment income
     23,446       22,328  
Due from reinsurers
     3,795,348       3,731,634  
Deferred policy acquisition costs
     966,094       853,211  
Premiums and other receivables
     178,917       168,026  
Intangible assets
     73,629       75,357  
Other assets
     291,490       307,342  
Separate account assets
     2,544,429       2,446,786  
Total assets
   $ 10,170,366     $ 9,884,306  
                 
Liabilities and Stockholders' Equity
                
Liabilities:
                
Future policy benefits
   $ 4,532,615     $ 4,409,183  
Unearned premiums
     8,102       5,563  
Policy claims and other benefits payable
     233,964       229,895  
Other policyholders' funds
     346,136       357,253  
Note payable
     300,000       300,000  
Income taxes
     130,283       136,226  
Other liabilities
     364,533       386,182  
Payable under securities lending
     163,342       181,726  
Separate account liabilities
     2,544,429       2,446,786  
Total liabilities
     8,623,404       8,452,814  
                 
Stockholders' equity:
                
Common stock
     736       728  
Paid-in capital
     894,018       883,168  
Retained earnings
     488,520       395,057  
Accumulated other comprehensive income, net of income tax
     163,688       152,539  
Total stockholders' equity
     1,546,962       1,431,492  
Total liabilities and stockholders' equity
   $ 10,170,366     $ 9,884,306  
 
 
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PRIMERICA, INC.
Condensed Statements of Income
(Unaudited – in thousands, except per-share amounts)
 
     
Three months ended June 30,
  
     
2011
    
2010
  
Revenues:
            
Direct premiums
   $ 560,881     $ 547,455  
Ceded premiums
     (435,564 )     (447,213 )
 
Net premiums
     125,317       100,242  
Commissions and fees
     108,698       93,226  
Net investment income
     27,229       27,991  
Realized investment gains, including OTTI
     2,035       374  
Other, net
     11,816       12,466  
 
Total revenues
     275,095       234,299  
                   
Benefits and expenses:
                
Benefits and claims
     57,272       45,124  
Amortization of deferred policy acquisition costs
     27,385       22,899  
Sales commissions
     50,163       43,511  
Insurance commissions
     19,154       10,083  
Insurance expenses
     4,219       4,233  
Interest expense
     6,998       6,928  
Other operating expenses
     41,743       65,183  
 
Total benefits and expenses
     206,934       197,961  
 
Income before income taxes
     68,161       36,338  
Income taxes
     24,138       14,330  
 
Net income
   $ 44,023     $ 22,008  
                   
Earnings per share:
                
 
Basic
   $ 0.58     $ 0.29  
 
Diluted
   $ 0.58     $ 0.29  
                   
Shares used in computing earnings per share:
                
 
Basic
     73,457       71,844  
 
Diluted
     74,201       72,734  
 
 
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PRIMERICA, INC.
Operating Results Reconciliation
(Unaudited – in thousands, except per-share amounts)
 
   
Three months ended June 30, 2011
  
   
Operating
Results 
(Non-GAAP)
    
Operating
adjustments
    
Reported
Results
(GAAP)
  
Revenues:
                  
Direct premiums
   $ 560,881     $ -     $ 560,881  
Ceded premiums
     (435,564 )     -       (435,564 )
Net premiums
     125,317       -       125,317  
Commissions and fees
     108,698       -       108,698  
Net investment income
     27,229       -       27,229  
Realized investment gains,
                        
including OTTI
     -       2,035       2,035  
Other, net
     11,816       -       11,816  
Total revenues
     273,060       2,035       275,095  
                         
Benefits and expenses:
                        
Benefits and claims
     57,272       -       57,272  
Amortization of DAC
     27,385       -       27,385  
Insurance commissions
     50,163       -       50,163  
Insurance expenses
     19,154       -       19,154  
Sales commissions
     4,219       -       4,219  
Interest expense
     6,998       -       6,998  
Other operating expenses
     38,197       3,546       41,743  
Total benefits and expenses
     203,388       3,546       206,934  
Income before income taxes
     69,672       (1,511 )     68,161  
Income taxes
     24,673       (535 )     24,138  
Net income
   $ 44,999     $ (976 )   $ 44,023  
                         
Earnings per share - diluted
   $ 0.59             $ 0.58  
Diluted shares
     74,201               74,201  
 
See the Non-GAAP Financial Measures section and the segment Operating Results
Reconciliations for additional information.
        
 
 
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PRIMERICA, INC.
Operating Results Reconciliation
(Unaudited – in thousands, except per-share amounts)
 
   
Three months ended June 30, 2010
  
   
Operating
Results 
(Non-GAAP)
    
Operating
adjustments
    
Reported
Results
(GAAP)
  
Revenues:
                  
Direct premiums
   $ 547,455     $ -     $ 547,455  
Ceded premiums
     (447,213 )     -       (447,213 )
Net premiums
     100,242       -       100,242  
Commissions and fees
     93,226       -       93,226  
Net investment income
     27,991       -       27,991  
Realized investment gains,
                        
including OTTI
     -       374       374  
Other, net
     12,466       -       12,466  
Total revenues
     233,925       374       234,299  
                         
Benefits and expenses:
                        
Benefits and claims
     45,124       -       45,124  
Amortization of DAC
     22,899       -       22,899  
Insurance commissions
     43,511       -       43,511  
Insurance expenses
     10,083       -       10,083  
Sales commissions
     4,233       -       4,233  
Interest expense
     6,928       -       6,928  
Other operating expenses
     39,726       25,457       65,183  
Total benefits and expenses
     172,504       25,457       197,961  
Income before income taxes
     61,421       (25,083 )     36,338  
Income taxes
     24,222       (9,892 )     14,330  
Net income
   $ 37,199     $ (15,191 )   $ 22,008  
                         
Earnings per share - diluted
   $ 0.49             $ 0.29  
Diluted shares
     72,734               72,734  
                         
See the Non-GAAP Financial Measures section and the segment Operating Results
  
Reconciliations for additional information.
                  
 
 
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PRIMERICA, INC.
Corporate and Other Distributed Products Operating Results Reconciliation
(Unaudited – in thousands)

   
Three months ended June 30,
  
   
2011
    
2010
  
             
Operating revenues
   $ 36,833     $ 37,318  
Realized investment gains, including OTTI
     2,035       374  
Total revenues
   $ 38,868     $ 37,692  
                 
                 
Operating loss before income taxes
   $ (6,579 )   $ (9,409 )
Realized investment gains, including OTTI
     2,035       374  
Other operating expense - equity awards
     (3,546 )     (25,457 )
Loss before income taxes
   $ (8,090 )   $ (34,492 )
                 
 
PRIMERICA, INC.
Adjusted Stockholders' Equity Reconciliation
(Unaudited – in thousands)

   
June 30,
  
   
2011
  
Adjusted stockholders' equity
   $ 1,443,590  
Unrealized net investment gains recorded in stockholders' equity
     103,372  
Stockholders' equity
   $ 1,546,962  
 
 
 
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