·
|
The size of our life-licensed insurance sales force was 91,176 at December 31, 2011 compared with 91,970 at September 30, 2011. The number of new recruits obtaining life licenses increased 5% in the fourth quarter of 2011, compared with the prior year period. Recruiting declined 12% to 43,731 in the fourth quarter of 2011, compared with the fourth quarter of 2010. Sequentially, recruiting declined following the robust post-convention recruiting surge and seasonally higher third quarter. We also modified fourth quarter incentives to focus more on getting new recruits licensed and productive.
|
·
|
Life insurance policies issued increased 9% to 61,361 in the fourth quarter of 2011, compared with the year ago period reflecting a processing cycle which provided five additional business processing days in the fourth quarter of this year. Excluding the extra business days, life insurance policies issued increased 2% year-over-year. Term Life net premium grew by 19% to $121.0 million in the fourth quarter of 2011 compared with the fourth quarter a year ago and increased by 3% from the third quarter as we continue to build the New Term business. Sequentially, life insurance policies issued declined 6% from the third quarter of 2011 reflecting seasonally lower life insurance sales.
|
·
|
Investment and Savings Products sales continued to grow, up 6% to $955.8 million in the fourth quarter of 2011 from $903.0 million in the year ago period primarily driven by a 27% increase in variable annuity sales. Sequentially, Investment and Savings Products sales declined 10% reflecting the choppy market environment. Client redemptions of older variable annuity contracts to purchase the current Prime Elite IV variable annuity that offers an attractive guaranteed income living benefit were higher in the fourth quarter of 2011 compared with the fourth quarter of 2010, but were sequentially lower than the third quarter of 2011. Client asset values decreased 3% to $33.66 billion at December 31, 2011 from $34.87 billion at December 31, 2010 but increased 6% from $31.62 billion at September 30, 2011 primarily reflecting market movement.
|
Actual
|
Operating (1)
|
|||||||||||||||||||||
Q4 2011
|
Q4 2010
|
% Change
|
Q4 2011
|
Q4 2010
|
% Change
|
|||||||||||||||||
Revenues:
|
($ in thousands)
|
($ in thousands)
|
||||||||||||||||||||
Term Life Insurance
|
$
|
144,678
|
$
|
137,068
|
6
|
%
|
$
|
144,678
|
$
|
123,927
|
17
|
%
|
||||||||||
Investment and Savings Products
|
93,785
|
103,022
|
-9
|
%
|
93,785
|
103,022
|
-9
|
%
|
||||||||||||||
Corporate and Other Distributed Products
|
37,392
|
39,297
|
-5
|
%
|
33,136
|
37,597
|
-12
|
%
|
||||||||||||||
Total revenues
|
$
|
275,855
|
$
|
279,387
|
-1
|
%
|
$
|
271,599
|
$
|
264,546
|
3
|
%
|
||||||||||
Income (loss) before income taxes:
|
||||||||||||||||||||||
Term Life Insurance
|
$
|
43,092
|
$
|
52,000
|
-17
|
%
|
$
|
43,092
|
$
|
38,859
|
11
|
%
|
||||||||||
Investment and Savings Products
|
28,821
|
34,770
|
-17
|
%
|
28,821
|
34,770
|
-17
|
%
|
||||||||||||||
Corporate and Other Distributed Products
|
(9,226
|
)
|
(6,247
|
)
|
-48
|
%
|
(10,067
|
)
|
(4,786
|
)
|
-110
|
%
|
||||||||||
Total income before income taxes
|
$
|
62,687
|
$
|
80,523
|
-22
|
%
|
$
|
61,846
|
$
|
68,843
|
-10
|
%
|
||||||||||
(1) See the Non-GAAP Financial Measures section and the Operating Results Reconcilations at the end of this release for additional information.
|
||||||||||||||||||||||
PRIMERICA, INC. AND SUBSIDIARIES
|
|||||||
Condensed Balance Sheets
|
|||||||
December 31,
|
|||||||
2011 (1)
|
2010
|
||||||
(In thousands)
|
|||||||
Assets
|
|||||||
Investments:
|
|||||||
Fixed maturity securities available for sale, at fair value
|
$
|
1,959,156
|
$
|
2,081,361
|
|||
Equity securities available for sale, at fair value
|
26,712
|
23,213
|
|||||
Trading securities, at fair value
|
9,640
|
22,767
|
|||||
Policy loans and other invested assets
|
25,996
|
26,243
|
|||||
Total investments
|
2,021,504
|
2,153,584
|
|||||
Cash and cash equivalents
|
136,078
|
126,038
|
|||||
Accrued investment income
|
21,579
|
22,328
|
|||||
Due from reinsurers
|
3,855,890
|
3,731,634
|
|||||
Deferred policy acquisition costs
|
1,050,637
|
853,211
|
|||||
Premiums and other receivables
|
163,845
|
168,026
|
|||||
Intangible assets
|
71,928
|
75,357
|
|||||
Other assets
|
268,485
|
307,342
|
|||||
Separate account assets
|
2,408,598
|
2,446,786
|
|||||
Total assets
|
$
|
9,998,544
|
$
|
9,884,306
|
|||
Liabilities and Stockholders' Equity
|
|||||||
Liabilities:
|
|||||||
Future policy benefits
|
$
|
4,614,860
|
$
|
4,409,183
|
|||
Unearned premiums
|
7,022
|
5,563
|
|||||
Policy claims and other benefits payable
|
241,754
|
229,895
|
|||||
Other policyholders' funds
|
340,766
|
357,253
|
|||||
Note payable
|
300,000
|
300,000
|
|||||
Income taxes
|
131,477
|
136,226
|
|||||
Other liabilities
|
382,068
|
386,182
|
|||||
Payable under securities lending
|
149,358
|
181,726
|
|||||
Separate account liabilities
|
2,408,598
|
2,446,786
|
|||||
Total liabilities
|
8,575,903
|
8,452,814
|
|||||
Stockholders' equity:
|
|||||||
Common stock
|
649
|
728
|
|||||
Paid-in capital
|
707,912
|
883,168
|
|||||
Retained earnings
|
566,021
|
395,057
|
|||||
Accumulated other comprehensive income, net of income tax
|
148,059
|
152,539
|
|||||
Total stockholders' equity
|
1,422,641
|
1,431,492
|
|||||
Total liabilities and stockholders' equity
|
$
|
9,998,544
|
$
|
9,884,306
|
|||
(1) Unaudited
|
PRIMERICA, INC. AND SUBSIDIARIES
|
||||||||
Condensed Statements of Income
|
||||||||
Three months ended December 31,
|
||||||||
2011 (1)
|
2010 (1)
|
|||||||
(In thousands, except per-share amounts)
|
||||||||
Revenues:
|
||||||||
Direct premiums
|
$
|
555,778
|
$
|
548,330
|
||||
Ceded premiums
|
(419,630
|
)
|
(417,981
|
)
|
||||
Net premiums
|
136,148
|
130,349
|
||||||
Commissions and fees
|
97,282
|
108,288
|
||||||
Net investment income
|
25,643
|
26,688
|
||||||
Realized investment gains, including OTTI
|
4,256
|
1,700
|
||||||
Other, net
|
12,526
|
12,362
|
||||||
Total revenues
|
275,855
|
279,387
|
||||||
Benefits and expenses:
|
||||||||
Benefits and claims
|
63,688
|
52,033
|
||||||
Amortization of deferred policy acquisition costs
|
35,875
|
29,536
|
||||||
Sales commissions
|
43,816
|
50,267
|
||||||
Insurance expenses
|
16,938
|
15,887
|
||||||
Insurance commissions
|
5,169
|
4,203
|
||||||
Interest expense
|
6,973
|
6,976
|
||||||
Other operating expenses
|
40,709
|
39,962
|
||||||
Total benefits and expenses
|
213,168
|
198,864
|
||||||
Income before income taxes
|
62,687
|
80,523
|
||||||
Income taxes
|
21,502
|
27,634
|
||||||
Net income
|
$
|
41,185
|
$
|
52,889
|
||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.58
|
$
|
0.70
|
||||
Diluted
|
$
|
0.57
|
$
|
0.69
|
||||
Shares used in computing earnings per share:
|
||||||||
Basic
|
69,366
|
72,453
|
||||||
Diluted
|
70,169
|
73,240
|
||||||
(1) Unaudited
|
PRIMERICA, INC. AND SUBSIDIARIES
|
|||||||||
Condensed Statements of Income
|
|||||||||
Year ended December 31,
|
|||||||||
2011 (1)
|
2010
|
||||||||
(In thousands, except per-share amounts)
|
|||||||||
Revenues:
|
|||||||||
Direct premiums
|
$
|
2,229,467
|
$
|
2,181,074
|
|||||
Ceded premiums
|
(1,703,075
|
)
|
(1,450,367
|
)
|
|||||
Net premiums
|
526,392
|
730,707
|
|||||||
Commissions and fees
|
412,979
|
382,940
|
|||||||
Net investment income
|
108,601
|
165,111
|
|||||||
Realized investment gains, including OTTI
|
6,440
|
34,145
|
|||||||
Other, net
|
48,681
|
48,960
|
|||||||
Total revenues
|
1,103,093
|
1,361,863
|
|||||||
Benefits and expenses:
|
|||||||||
Benefits and claims
|
242,696
|
317,703
|
|||||||
Amortization of deferred policy acquisition costs
|
119,348
|
168,035
|
|||||||
Sales commissions
|
191,306
|
179,924
|
|||||||
Insurance expenses
|
61,109
|
75,503
|
|||||||
Insurance commissions
|
19,297
|
19,904
|
|||||||
Interest expense
|
27,968
|
20,872
|
|||||||
Other operating expenses
|
165,525
|
180,779
|
|||||||
Total benefits and expenses
|
827,249
|
962,720
|
|||||||
Income before income taxes
|
275,844
|
399,143
|
|||||||
Income taxes
|
97,568
|
141,365
|
|||||||
Net income
|
$
|
178,276
|
$
|
257,778
|
|||||
Earnings per share:
|
|||||||||
Basic
|
$
|
2.39
|
$
|
3.43
|
(2)
|
||||
Diluted
|
$
|
2.36
|
$
|
3.40
|
(2)
|
||||
Shares used in computing earnings per share:
|
|||||||||
Basic
|
72,283
|
72,099
|
(2)
|
||||||
Diluted
|
73,107
|
72,882
|
(2)
|
||||||
(1) Unaudited
|
|||||||||
(2) Pro forma basis using weighted-average shares, including the shares issued or issuable upon lapse of restriction
following our April 1, 2010 corporate reorganization as though they had been issued outstanding on January 1, 2010.
|
PRIMERICA, INC. AND SUBSIDIARIES
|
|||||||||||
Operating Results Reconciliation
|
|||||||||||
(Unaudited – in thousands, except per-share amounts)
|
|||||||||||
Three months ended December 31, 2011
|
|||||||||||
Operating
Results
(Non-GAAP)
|
Operating
adjustments
|
Reported
Results
(GAAP)
|
|||||||||
Revenues:
|
|||||||||||
Direct premiums
|
$
|
555,778
|
$
|
-
|
$
|
555,778
|
|||||
Ceded premiums
|
(419,630
|
)
|
-
|
(419,630
|
)
|
||||||
Net premiums
|
136,148
|
-
|
136,148
|
||||||||
Commissions and fees
|
97,282
|
-
|
97,282
|
||||||||
Net investment income
|
25,643
|
-
|
25,643
|
||||||||
Realized investment gains,
including OTTI
|
-
|
4,256
|
4,256
|
||||||||
Other, net
|
12,526
|
-
|
12,526
|
||||||||
Total revenues
|
271,599
|
4,256
|
275,855
|
||||||||
Benefits and expenses:
|
|||||||||||
Benefits and claims
|
63,688
|
-
|
63,688
|
||||||||
Amortization of DAC
|
35,875
|
-
|
35,875
|
||||||||
Sales commissions
|
43,816
|
-
|
43,816
|
||||||||
Insurance expenses
|
16,938
|
-
|
16,938
|
||||||||
Insurance commissions
|
5,169
|
-
|
5,169
|
||||||||
Interest expense
|
6,973
|
-
|
6,973
|
||||||||
Other operating expenses
|
37,294
|
3,415
|
40,709
|
||||||||
Total benefits and expenses
|
209,753
|
3,415
|
213,168
|
||||||||
Income before income taxes
|
61,846
|
841
|
62,687
|
||||||||
Income taxes
|
21,214
|
288
|
21,502
|
||||||||
Net income
|
$
|
40,632
|
$
|
553
|
$
|
41,185
|
|||||
Earnings per share - diluted
|
$
|
0.56
|
$
|
0.57
|
|||||||
Diluted shares
|
70,169
|
70,169
|
|||||||||
See the Non-GAAP Financial Measures section and the segment Operating Results
|
|||||||||||
Reconciliations for additional information.
|
PRIMERICA, INC. AND SUBSIDIARIES
|
|||||||||||
Operating Results Reconciliation
|
|||||||||||
(Unaudited – in thousands, except per-share amounts)
|
|||||||||||
Three months ended December 31, 2010
|
|||||||||||
Operating
Results
(Non-GAAP)
|
Operating
adjustments
|
Reported
Results
(GAAP)
|
|||||||||
Revenues:
|
|||||||||||
Direct premiums
|
$
|
548,330
|
$
|
-
|
$
|
548,330
|
|||||
Ceded premiums
|
(431,122
|
)
|
13,141
|
(417,981
|
)
|
||||||
Net premiums
|
117,208
|
13,141
|
130,349
|
||||||||
Commissions and fees
|
108,288
|
-
|
108,288
|
||||||||
Net investment income
|
26,688
|
-
|
26,688
|
||||||||
Realized investment gains,
including OTTI
|
-
|
1,700
|
1,700
|
||||||||
Other, net
|
12,362
|
-
|
12,362
|
||||||||
Total revenues
|
264,546
|
14,841
|
279,387
|
||||||||
Benefits and expenses:
|
|||||||||||
Benefits and claims
|
52,033
|
-
|
52,033
|
||||||||
Amortization of DAC
|
29,536
|
-
|
29,536
|
||||||||
Sales commissions
|
50,267
|
-
|
50,267
|
||||||||
Insurance expenses
|
15,887
|
-
|
15,887
|
||||||||
Insurance commissions
|
4,203
|
-
|
4,203
|
||||||||
Interest expense
|
6,976
|
-
|
6,976
|
||||||||
Other operating expenses
|
36,801
|
3,161
|
39,962
|
||||||||
Total benefits and expenses
|
195,703
|
3,161
|
198,864
|
||||||||
Income before income taxes
|
68,843
|
11,680
|
80,523
|
||||||||
Income taxes
|
23,626
|
4,008
|
27,634
|
||||||||
Net income
|
$
|
45,217
|
$
|
7,672
|
$
|
52,889
|
|||||
Earnings per share - diluted
|
$
|
0.59
|
$
|
0.69
|
|||||||
Diluted shares
|
73,240
|
73,240
|
|||||||||
See the Non-GAAP Financial Measures section and the segment Operating Results
|
|||||||||||
Reconciliations for additional information.
|
PRIMERICA, INC. AND SUBSIDIARIES
|
|||||||||||
Operating Results Reconciliation
|
|||||||||||
(Unaudited – in thousands, except per-share amounts)
|
|||||||||||
Year ended December 31, 2011
|
|||||||||||
Operating
Results
(Non-GAAP)
|
Operating
adjustments
|
Reported
Results
(GAAP)
|
|||||||||
Revenues:
|
|||||||||||
Direct premiums
|
$
|
2,229,467
|
$
|
-
|
$
|
2,229,467
|
|||||
Ceded premiums
|
(1,711,804
|
)
|
8,729
|
(1,703,075
|
)
|
||||||
Net premiums
|
517,663
|
8,729
|
526,392
|
||||||||
Commissions and fees
|
412,979
|
-
|
412,979
|
||||||||
Net investment income
|
108,601
|
-
|
108,601
|
||||||||
Realized investment gains,
including OTTI
|
-
|
6,440
|
6,440
|
||||||||
Other, net
|
48,681
|
-
|
48,681
|
||||||||
Total revenues
|
1,087,924
|
15,169
|
l |
1,103,093
|
|||||||
Benefits and expenses:
|
|||||||||||
Benefits and claims
|
242,696
|
-
|
242,696
|
||||||||
Amortization of DAC
|
119,348
|
-
|
119,348
|
||||||||
Sales commissions
|
191,306
|
-
|
191,306
|
||||||||
Insurance expenses
|
61,109
|
-
|
61,109
|
||||||||
Insurance commissions
|
19,297
|
-
|
19,297
|
||||||||
Interest expense
|
27,968
|
-
|
27,968
|
||||||||
Other operating expenses
|
152,136
|
13,389
|
165,525
|
||||||||
Total benefits and expenses
|
813,860
|
13,389
|
827,249
|
||||||||
Income before income taxes
|
274,064
|
1,780
|
275,844
|
||||||||
Income taxes
|
96,986
|
582
|
97,568
|
||||||||
Net income
|
$
|
177,078
|
$
|
1,198
|
$
|
178,276
|
|||||
See the Non-GAAP Financial Measures section for additional information.
|
PRIMERICA, INC. AND SUBSIDIARIES
|
||||||||||||
Operating Results Reconciliation
|
||||||||||||
(Unaudited – in thousands, except per-share amounts)
|
||||||||||||
Year ended December 31, 2010
|
||||||||||||
Operating
Results
(Non-GAAP)
|
Operating
adjustments
|
Reported
Results
(GAAP)
|
||||||||||
Revenues:
|
||||||||||||
Direct premiums
|
$
|
2,181,074
|
$
|
-
|
$
|
2,181,074
|
||||||
Ceded premiums
|
(1,759,836
|
)
|
309,469
|
(1,450,367
|
)
|
|||||||
Net premiums
|
421,238
|
309,469
|
730,707
|
|||||||||
Commissions and fees
|
382,940
|
-
|
382,940
|
|||||||||
Net investment income
|
110,376
|
54,735
|
165,111
|
|||||||||
Realized investment gains,
including OTTI
|
-
|
34,145
|
34,145
|
|||||||||
Other, net
|
48,960
|
-
|
48,960
|
|||||||||
Total revenues
|
963,514
|
398,349
|
1,361,863
|
|||||||||
Benefits and expenses:
|
||||||||||||
Benefits and claims
|
189,499
|
128,204
|
317,703
|
|||||||||
Amortization of DAC
|
96,646
|
71,389
|
168,035
|
|||||||||
Sales commissions
|
179,924
|
-
|
179,924
|
|||||||||
Insurance expenses
|
49,420
|
26,083
|
75,503
|
|||||||||
Insurance commissions
|
18,235
|
1,669
|
19,904
|
|||||||||
Interest expense
|
27,809
|
(6,937
|
)
|
20,872
|
||||||||
Other operating expenses
|
149,085
|
31,694
|
180,779
|
|||||||||
Total benefits and expenses
|
710,618
|
252,102
|
962,720
|
|||||||||
Income before income taxes
|
252,896
|
146,247
|
399,143
|
|||||||||
Income taxes
|
91,409
|
49,956
|
141,365
|
|||||||||
Net income
|
$
|
161,487
|
$
|
96,291
|
$
|
257,778
|
||||||
See the Non-GAAP Financial Measures section for additional information.
|
PRIMERICA, INC. AND SUBSIDIARIES
|
||||||||
Term Life Insurance Segment Operating Results Reconciliation
|
||||||||
(Unaudited – in thousands)
|
||||||||
Three months ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Operating revenues
|
$ | 144,678 | $ | 123,927 | ||||
Reinsurance recoveries adjustment
|
- | 13,141 | ||||||
Total revenues
|
$ | 144,678 | $ | 137,068 | ||||
Operating income before income taxes
|
$ | 43,092 | $ | 38,859 | ||||
Reinsurance recoveries adjustment
|
- | 13,141 | ||||||
Income before income taxes
|
$ | 43,092 | $ | 52,000 |
Corporate and Other Distributed Products Segment Operating Results Reconciliation
|
||||||||
(Unaudited – in thousands)
|
||||||||
Three months ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Operating revenues
|
$
|
33,136
|
$
|
37,597
|
||||
Realized investment gains, including OTTI
|
4,256
|
1,700
|
||||||
Total revenues
|
$
|
37,392
|
$
|
39,297
|
||||
Operating loss before income taxes
|
$
|
(10,067
|
)
|
$
|
(4,786
|
)
|
||
Realized investment gains, including OTTI
|
4,256
|
1,700
|
||||||
Other operating expense - equity awards
|
(3,415
|
)
|
(3,161
|
)
|
||||
Loss before income taxes
|
$
|
(9,226
|
)
|
$
|
(6,247
|
)
|
Adjusted Stockholders' Equity Reconciliation
|
||||
(Unaudited – in thousands)
|
||||
December 31,
2011
|
||||
Adjusted stockholders' equity
|
$ | 1,327,224 | ||
Unrealized net investment gains recorded in stockholders' equity
|
95,417 | |||
Stockholders' equity
|
$ | 1,422,641 |