a50463369ex99-2.htm

THIRD QUARTER 2012

This document is a financial supplement to our third quarter 2012 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 two different purposes, as follows:

Operating adjustments exclude the expense associated with equity awards granted in connection with our initial public offering (“IPO”) and the impact of realized investment gains and losses. For periods which include the first quarter of 2011, operating adjustments exclude the impact of certain reinsurance recoveries which previously had not been recognized due to the uncertain nature of their recovery.

·	Adjusted when used in describing stockholders’ equity refers to the removal of the impact of net unrealized gains and losses on invested assets.

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.

Effective January 1, 2012, we adopted ASU 2010-26 Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts and no longer defer certain indirect acquisition costs or costs attributable to unsuccessful efforts of acquiring life insurance policies. We adopted this accounting policy change retrospectively and, accordingly, our historical results have been adjusted to reflect all results on a consistent basis across all periods presented. See the table below for the impact on key metrics.

During the first quarter 2012, we closed a redundant reserve financing transaction. In connection with this transaction, we formed Peach Re, Inc. (Peach Re), a special purpose financial captive insurance company and indirect wholly owned subsidiary of the company. In March 2012, Peach Re entered into a letter of credit facility with Deutsche Bank AG New York Branch with a term of approximately 14 years for a maximum amount of $510 million to support certain of its obligations for a portion of the reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies ceded to Peach Re by Primerica Life under a new coinsurance agreement. In connection with this transaction, Primerica Life Insurance Company (PLIC) obtained regulatory approval for the March 2012 payment of an extraordinary dividend of $150 million to Primerica, Inc.

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.

(Dollars in thousands)	Mar 31, 2011			Jun 30, 2011			Sep 30, 2011			Dec 31, 2011			Mar 31, 2012			Jun 30, 2012			Sep 30, 2012
Condensed Balance Sheets
Assets:
Investments and cash	$	2,330,098		$	2,297,013		$	2,319,873		$	2,157,582		$	2,167,231		$	2,016,842		$	2,176,721
Due from reinsurers		3,769,599			3,793,995			3,818,759			3,855,318			3,895,162			3,903,028			3,993,603
Deferred policy acquisition costs		786,055			833,784			864,623			904,485			948,087			990,558			1,036,020
Other assets		582,079			567,482			586,647			525,836			522,123			540,010			597,465
Separate account assets		2,582,881			2,544,429			2,276,705			2,408,598			2,541,313			2,500,640			2,630,630
Total assets	$	10,050,712		$	10,036,703		$	9,866,607		$	9,851,820		$	10,073,917		$	9,951,077		$	10,434,439

Liabilities:
Future policy benefits	$	4,470,185		$	4,532,615		$	4,557,535		$	4,614,860		$	4,676,374		$	4,723,359		$	4,797,815
Other policy liabilities		604,487			588,202			589,826			589,542			606,793			593,956			595,382
Income taxes		100,666			84,859			87,950			81,316			88,503			82,755			96,408
Other liabilities		396,195			363,181			389,319			381,495			331,112			329,539			424,706
Note payable		300,000			300,000			300,000			300,000			300,000			300,000			374,421
Payable under securities lending		186,089			163,342			185,483			149,358			142,507			143,963			177,666
Separate account liabilities		2,582,881			2,544,429			2,276,705			2,408,598			2,541,313			2,500,640			2,630,630
Total liabilities		8,640,502			8,576,628			8,386,817			8,525,169			8,686,602			8,674,211			9,097,028
Stockholders’ equity:
Common stock ($0.01 par value) (1)		732			736			737			649			653			599			597
Paid-in capital		1,016,973			1,021,338			1,026,265			835,232			842,613			693,717			691,885
Retained earnings		240,739			276,089			308,912			344,104			383,847			426,936			468,223
Treasury stock		—			—			—			—			—			—			—
Accumulated other comprehensive income (loss), net:
Net unrealized investment gains (losses) not other-than-temporarily impaired		96,542			105,646			99,257			97,082			107,598			107,187			119,836
Net unrealized investment losses other-than-temporarily impaired		(2,275	)		(2,275	)		(2,363	)		(1,665	)		(1,981	)		(2,031	)		(1,364	)
Cumulative translation adjustment		57,498			58,541			46,982			51,248			54,584			50,457			58,234
Total stockholders’ equity		1,410,210			1,460,076			1,479,790			1,326,650			1,387,314			1,276,866			1,337,411
Total liabilities and stockholders' equity	$	10,050,712		$	10,036,703		$	9,866,607		$	9,851,820		$	10,073,917		$	9,951,077		$	10,434,439

Reconciliation of Adjusted Stockholders' Equity to Total Stockholders' Equity
Adjusted stockholders' equity	$	1,315,943		$	1,356,704		$	1,382,895		$	1,231,233		$	1,281,697		$	1,171,709		$	1,218,939
Reconciling items:
Net unrealized investment gains (losses) not other-than-temporarily impaired		96,542			105,646			99,257			97,082			107,598			107,187			119,836
Net unrealized investment losses other-than-temporarily impaired		(2,275	)		(2,275	)		(2,363	)		(1,665	)		(1,981	)		(2,031	)		(1,364	)
Total reconciling items		94,268			103,372			96,894			95,417			105,617			105,156			118,472
Total stockholders’ equity	$	1,410,210		$	1,460,076		$	1,479,790		$	1,326,650		$	1,387,314		$	1,276,866		$	1,337,411

Deferred Policy Acquisition Costs Rollforward
Balance, beginning of period	$	738,946		$	786,055		$	833,784		$	864,623		$	904,485		$	948,087		$	990,558
General expenses deferred		7,381			8,410			7,625			7,754			7,003			7,492			7,234
Commission costs deferred		56,822			62,091			61,785			58,793			60,116			66,540			61,238
Amortization of deferred policy acquisition costs		(23,229	)		(23,975	)		(26,645	)		(30,185	)		(26,531	)		(28,205	)		(29,234	)
Foreign currency impact and other, net		6,135			1,203			(11,927	)		3,501			3,015			(3,356	)		6,223
Balance, end of period	$	786,055		$	833,784		$	864,623		$	904,485		$	948,087		$	990,558		$	1,036,020

(1)

Outstanding common shares exclude restricted stock units.

																						YOY Q3												YOY YTD
	Q1			Q2			Q3			Q4			Q1			Q2			Q3			$			%			YTD			YTD			$			%
(Dollars in thousands, except per-share data)	2011			2011			2011			2011			2012			2012			2012			Change			Change			2011			2012			Change			Change
Earnings per Share
Basic earnings per share:
Weighted-average common shares and fully vested equity awards		72,671,481			73,457,333			73,658,253			69,366,432			65,133,035			61,530,879			60,059,741			(13,598,512	)		-18.5	%		73,264,528			62,241,218			(11,023,010	)	-15.0	%

Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	10,503			29.9	%	$	119,988		$	133,535		$	13,547		11.3	%
Less income attributable to unvested participating securities		(1,895	)		(1,097	)		(988	)		(1,111	)		(1,357	)		(1,110	)		(1,116	)		(128	)		-12.9	%		(3,798	)		(3,625	)		174		4.6	%
Net income used in computing basic EPS	$	45,377		$	36,523		$	34,108		$	36,094		$	40,400		$	45,069		$	44,483		$	10,375			30.4	%	$	116,190		$	129,911		$	13,721		11.8	%
Basic earnings per share	$	0.62		$	0.50		$	0.46		$	0.52		$	0.62		$	0.73		$	0.74		$	0.28			59.9	%	$	1.59		$	2.09		$	0.50		31.6	%

Net operating income	$	43,441		$	38,592		$	37,301		$	36,652		$	42,377		$	45,455		$	45,103		$	7,802			20.9	%	$	119,335		$	132,935		$	13,600		11.4	%
Less operating income attributable to unvested participating securities		(1,741	)		(1,126	)		(1,051	)		(1,094	)		(1,377	)		(1,093	)		(1,104	)		(54	)		-5.1	%		(3,783	)		(3,608	)		175		4.6	%
Net operating income used in computing basic operating EPS	$	41,700		$	37,467		$	36,250		$	35,558		$	41,000		$	44,362		$	43,999		$	7,748			21.4	%	$	115,551		$	129,327		$	13,776		11.9	%
Basic operating income per share	$	0.57		$	0.51		$	0.49		$	0.51		$	0.63		$	0.72		$	0.73		$	0.24			48.9	%	$	1.58		$	2.08		$	0.50		31.7	%

Diluted earnings per share:
Weighted-average common shares and fully vested equity awards		72,671,481			73,457,333			73,658,253			69,366,432			65,133,035			61,530,879			60,059,741			(13,598,512	)		-18.5	%		73,264,528			62,241,218			(11,023,010	)	-15.0	%
Dilutive impact of warrants		1,154,597			743,814			541,184			802,787			1,141,687			1,155,701			1,502,853			961,669		nm				830,342			1,277,698			447,356		53.9	%
Shares used to calculate diluted EPS		73,826,078			74,201,147			74,199,437			70,169,219			66,274,722			62,686,580			61,562,594			(12,836,843	)		-17.0	%		74,094,870			63,518,916			(10,575,954	)	-14.3	%

Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	10,503			29.9	%	$	119,988		$	133,535		$	13,547		11.3	%
Less income attributable to unvested participating securities		(1,867	)		(1,087	)		(982	)		(1,099	)		(1,335	)		(1,092	)		(1,092	)		(110	)		-11.2	%		(3,759	)		(3,559	)		200		5.3	%
Net income used in computing diluted EPS	$	45,405		$	36,533		$	34,115		$	36,105		$	40,421		$	45,088		$	44,507		$	10,393			30.5	%	$	116,230		$	129,977		$	13,747		11.8	%
Diluted earnings per share	$	0.62		$	0.49		$	0.46		$	0.51		$	0.61		$	0.72		$	0.72		$	0.26			57.2	%	$	1.57		$	2.05		$	0.48		30.4	%

Net operating income	$	43,441		$	38,592		$	37,301		$	36,652		$	42,377		$	45,455		$	45,103		$	7,802			20.9	%	$	119,335		$	132,935		$	13,600		11.4	%
Less operating income attributable to unvested participating securities		(1,715	)		(1,115	)		(1,044	)		(1,083	)		(1,355	)		(1,074	)		(1,080	)		(37	)		-3.5	%		(3,742	)		(3,542	)		200		5.3	%
Net operating income used in computing diluted operating EPS	$	41,726		$	37,477		$	36,257		$	35,570		$	41,022		$	44,381		$	44,023		$	7,765			21.4	%	$	115,592		$	129,392		$	13,800		11.9	%
Diluted operating income per share	$	0.57		$	0.51		$	0.49		$	0.51		$	0.62		$	0.71		$	0.72		$	0.23			46.3	%	$	1.56		$	2.04		$	0.48		30.6	%

																						YOY Q3												YOY YTD
	Q1			Q2			Q3			Q4			Q1			Q2			Q3			$			%			YTD			YTD			$			%
	2011			2011			2011			2011			2012			2012			2012			Change			Change			2011			2012			Change			Change
Annualized Return on Equity
Average stockholders' equity	$	1,383,369		$	1,435,143		$	1,469,933		$	1,403,220		$	1,356,982		$	1,332,090		$	1,307,138		$	(162,794	)		-11.1	%	$	1,429,482		$	1,332,070		$	(97,411	)		-6.8	%
Average adjusted stockholders' equity	$	1,288,212		$	1,336,324		$	1,369,800		$	1,307,064		$	1,256,465		$	1,226,703		$	1,195,324		$	(174,476	)		-12.7	%	$	1,331,445		$	1,226,164		$	(105,281	)		-7.9	%

Net income return on stockholders' equity		13.7	%		10.5	%		9.6	%		10.6	%		12.3	%		13.9	%		14.0	%		4.4	%	nm				11.2	%		13.4	%		2.2	%	nm
Net income return on adjusted stockholders' equity		14.7	%		11.3	%		10.2	%		11.4	%		13.3	%		15.1	%		15.3	%		5.0	%	nm				12.0	%		14.5	%		2.5	%	nm

Net operating income return on adjusted stockholders' equity		13.5	%		11.6	%		10.9	%		11.2	%		13.5	%		14.8	%		15.1	%		4.2	%	nm				12.0	%		14.5	%		2.5	%	nm

Capital Structure
Debt-to-capital (1)		17.5	%		17.0	%		16.9	%		18.4	%		17.8	%		19.0	%		21.9	%		5.0	%	nm				16.9	%		21.9	%		5.0	%	nm

Cash and invested assets to stockholders' equity		1.7	x		1.6	x		1.6	x		1.6	x		1.6	x		1.6	x		1.6	x		0.1	x	nm				1.6	x		1.6	x		0.1	x	nm
Cash and invested assets to adjusted stockholders' equity		1.8	x		1.7	x		1.7	x		1.8	x		1.7	x		1.7	x		1.8	x		0.1	x	nm				1.7	x		1.8	x		0.1	x	nm

Share count, end of period (2)		73,187,837			73,603,111			73,740,120			64,882,643			65,303,547			59,868,486			59,722,559			(14,017,561	)		-19.0	%		73,740,120			59,722,559			(14,017,561	)		-19.0	%
Adjusted stockholders' equity per share	$	17.98		$	18.43		$	18.75		$	18.98		$	19.63		$	19.57		$	20.41		$	1.66			8.8	%	$	18.75		$	20.41		$	1.66			8.8	%

Financial Strength Ratings - Primerica Life Insurance Co
Moody's	na			A2			A2			A2			A2			A2			A2			nm			nm			nm			nm			nm			nm
S&P	AA-			AA-			AA-			AA-			AA-			AA-			AA-			nm			nm			nm			nm			nm			nm
A.M. Best	A+			A+			A+			A+			A+			A+			A+			nm			nm			nm			nm			nm			nm
Fitch	A+			A+			A+			A+			A+			A+			A+			nm			nm			nm			nm			nm			nm

Holding Company Senior Debt Ratings
Moody's	na			Baa2			Baa2			Baa2			Baa2			Baa2			Baa2			nm			nm			nm			nm			nm			nm
S&P	na			A-			A-			A-			A-			A-			A-			nm			nm			nm			nm			nm			nm
A.M. Best	na			a-			a-			a-			a-			a-			a-			nm			nm			nm			nm			nm			nm

																						YOY Q3											YOY YTD
	Q1			Q2			Q3			Q4			Q1			Q2			Q3			$			%		YTD			YTD			$			%
(Dollars in thousands)	2011			2011			2011			2011			2012			2012				2012		Change			Change		2011			2012			Change			Change
Statement of Income
Revenues:
Direct premiums	$	552,069		$	560,881		$	560,739		$	555,778		$	561,037		$	570,073		$	567,273		$	6,534		1.2	%	$	1,673,689		$	1,698,383		$	24,695			1.5	%
Ceded premiums		(422,238	)		(435,564	)		(425,643	)		(419,630	)		(418,163	)		(415,814	)		(414,992	)		10,651		2.5	%		(1,283,444	)		(1,248,969	)		34,475			2.7	%
Net premiums		129,831			125,317			135,096			136,148			142,874			154,259			152,282			17,186		12.7	%		390,244			449,414			59,170			15.2	%
Net investment income		28,626			27,229			27,103			25,644			26,097			23,605			26,882			(222	)	-0.8	%		82,958			76,583			(6,375	)		-7.7	%
Commissions and fees:
Sales-based (1)		43,128			44,904			42,244			40,086			44,467			47,269			43,120			876		2.1	%		130,276			134,856			4,580			3.5	%
Asset-based (2)		44,825			45,348			41,996			40,889			43,722			43,751			45,627			3,631		8.6	%		132,170			133,099			929			0.7	%
Account-based (3)		10,432			11,811			10,140			9,615			9,373			9,494			9,826			(314	)	-3.1	%		32,382			28,693			(3,689	)		-11.4	%
Other commissions and fees		7,731			6,635			6,502			6,693			6,343			6,248			5,764			(739	)	-11.4	%		20,868			18,355			(2,513	)		-12.0	%
Realized investment (losses) gains		327			2,035			(178	)		4,256			2,132			4,320			3,872			4,050		nm			2,184			10,324			8,140		nm
Other, net		11,452			11,816			12,887			12,526			11,594			11,581			11,715			(1,172	)	-9.1	%		36,155			34,889			(1,266	)		-3.5	%
Total revenues		276,352			275,095			275,790			275,855			286,601			300,525			299,087			23,297		8.4	%		827,237			886,214			58,977			7.1	%
Benefits and expenses:
Benefits and claims		57,635			57,272			64,101			63,688			67,933			68,925			70,738			6,636		10.4	%		179,008			207,596			28,587			16.0	%
Amortization of DAC		23,229			23,975			26,645			30,185			26,531			28,205			29,234			2,588		9.7	%		73,849			83,970			10,121			13.7	%
Insurance commissions		8,998			9,532			10,536			9,553			8,496			6,457			6,684			(3,851	)	-36.6	%		29,066			21,638			(7,427	)		-25.6	%
Insurance expenses		15,798			26,988			22,133			24,273			22,444			24,589			23,744			1,611		7.3	%		64,920			70,777			5,858			9.0	%
Sales commissions:
Sales-based (1)		30,553			31,389			29,640			26,805			31,600			33,285			30,521			882		3.0	%		91,582			95,406			3,824			4.2	%
Asset-based (2)		15,451			15,111			13,805			13,534			14,745			15,031			15,557			1,752		12.7	%		44,368			45,334			966			2.2	%
Other sales commissions		4,434			3,774			3,692			3,534			3,371			3,159			3,292			(400	)	-10.8	%		11,900			9,823			(2,078	)		-17.5	%
Interest expense		6,997			6,998			7,000			6,973			6,910			8,505			8,829			1,829		26.1	%		20,994			24,244			3,250			15.5	%
Other operating expenses		40,001			41,590			42,732			40,630			41,104			40,447			39,933			(2,800	)	-6.6	%		124,324			121,484			(2,840	)		-2.3	%
Total benefits and expenses		203,095			216,630			220,285			219,175			223,135			228,605			228,532			8,247		3.7	%		640,010			680,272			40,262			6.3	%
Income before income taxes		73,256			58,465			55,505			56,681			63,466			71,921			70,556			15,050		27.1	%		187,227			205,942			18,715			10.0	%
Income taxes		25,985			20,845			20,409			19,477			21,709			25,741			24,956			4,547		22.3	%		67,239			72,407			5,168			7.7	%
Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	10,503		29.9	%	$	119,988		$	133,535		$	13,547			11.3	%

Income Before Income Taxes by Segment
Term Life	$	49,716		$	36,027		$	39,663		$	37,045		$	44,283		$	51,722		$	48,577		$	8,915		22.5	%	$	125,405		$	144,583		$	19,178			15.3	%
Investment & Savings Products		31,039			30,470			26,746			28,821			28,869			29,444			31,608			4,862		18.2	%		88,255			89,922			1,667			1.9	%
Corporate & Other Distributed Products		(7,498	)		(8,032	)		(10,903	)		(9,185	)		(9,687	)		(9,246	)		(9,629	)		1,274		11.7	%		(26,433	)		(28,563	)		(2,130	)		-8.1	%
Income before income taxes	$	73,256		$	58,465		$	55,505		$	56,681		$	63,466		$	71,921		$	70,556		$	15,050		27.1	%	$	187,227		$	205,942		$	18,715			10.0	%

																						YOY Q3											YOY YTD
	Q1			Q2			Q3			Q4			Q1			Q2			Q3			$		%			YTD			YTD			$		%
(Dollars in thousands)	2011			2011			2011			2011			2012			2012			2012			Change		Change			2011			2012			Change		Change
Reconciliation from Operating Revenues to Total Revenues
Operating revenues	$	267,296		$	273,060		$	275,968		$	271,600		$	284,469		$	296,206		$	295,215		$	19,247		7.0	%	$	816,324		$	875,890		$	59,565		7.3	%

Operating revenues reconciling items:
Realized investment gains/losses		327			2,035			(178	)		4,256			2,132			4,320			3,872		nm		nm				2,184			10,324		nm		nm
Ceded premiums - reinsurance recoveries		8,729			—			—			—			—			—			—		nm		nm				8,729			—		nm		nm
Total operating revenues reconciling items		9,056			2,035			(178	)		4,256			2,132			4,320			3,872		nm		nm				10,913			10,324		nm		nm

Total revenues	$	276,352		$	275,095		$	275,790		$	275,855		$	286,601		$	300,525		$	299,087		$	23,297		8.4	%	$	827,237		$	886,214		$	58,977		7.1	%


Reconciliation from Operating Income Before Income Taxes to Income Before Income Taxes
Operating income before income taxes	$	67,321		$	59,976		$	58,992		$	55,840		$	64,409		$	70,793		$	69,787		$	10,795		18.3	%	$	186,288		$	204,989		$	18,700		10.0	%

Operating income before income taxes reconciling items:
Realized investment gains/losses		327			2,035			(178	)		4,256			2,132			4,320			3,872		nm		nm				2,184			10,324		nm		nm
Ceded premiums - reinsurance recoveries		8,729			—			—			—			—			—			—		nm		nm				8,729			—		nm		nm
Initial & accelerated management / field grant expense		(3,120	)		(3,546	)		(3,309	)		(3,415	)		(3,075	)		(3,192	)		(3,104	)	nm		nm				(9,974	)		(9,371	)	nm		nm
Total operating income before income taxes reconciling items		5,936			(1,510	)		(3,487	)		841			(943	)		1,128			768		nm		nm				939			953		nm		nm

Income before income taxes	$	73,256		$	58,465		$	55,505		$	56,681		$	63,466		$	71,921		$	70,556		$	15,050		27.1	%	$	187,227		$	205,942		$	18,715		10.0	%


Reconciliation from Net Operating Income to Net Income
Net operating income	$	43,441		$	38,592		$	37,301		$	36,652		$	42,377		$	45,455		$	45,103		$	7,802		20.9	%	$	119,335		$	132,935		$	13,600		11.4	%

Net operating income reconciling items:
Operating income before income taxes reconciling items		5,936			(1,510	)		(3,487	)		841			(943	)		1,128			768		nm		nm				939			953		nm		nm
Tax impact of operating income reconciling items at effective tax rate		(2,105	)		539			1,282			(289	)		323			(404	)		(272	)	nm		nm				(285	)		(353	)	nm		nm
Total net operating income reconciling items		3,830			(972	)		(2,205	)		552			(621	)		724			497		nm		nm				654			600		nm		nm

Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	10,503		29.9	%	$	119,988		$	133,535		$	13,547		11.3	%

																						YOY Q3												YOY YTD
(Dollars in thousands)	Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012			$ Change			% Change			YTD 2011			YTD 2012			$ Change			% Change
Term Life Insurance
Revenues:
Direct premiums	$	532,167		$	540,283		$	539,693		$	537,450		$	542,157		$	550,329		$	549,069		$	9,376			1.7	%	$	1,612,144		$	1,641,555		$	29,412			1.8	%
Ceded premiums		(427,382	)		(431,890	)		(421,933	)		(416,477	)		(414,559	)		(412,038	)		(411,240	)		10,693			2.5	%		(1,281,205	)		(1,237,837	)		43,368			3.4	%
Net premiums		104,786			108,393			117,760			120,973			127,598			138,292			137,829			20,069			17.0	%		330,939			403,718			72,780			22.0	%
Allocated net investment income		15,794			15,669			15,664			15,560			16,659			16,685			18,395			2,731			17.4	%		47,127			51,740			4,613			9.8	%
Other, net		7,653			7,580			8,289			8,144			7,547			7,753			7,788			(500	)		-6.0	%		23,522			23,089			(433	)		-1.8	%
Operating revenues		128,233			131,641			141,713			144,678			151,805			162,730			164,012			22,299			15.7	%		401,588			478,547			76,959			19.2	%
Benefits and expenses:
Benefits and claims		47,351			43,921			52,067			53,820			57,509			59,984			60,733			8,666			16.6	%		143,339			178,226			34,888			24.3	%
Amortization of DAC		20,127			19,894			22,289			27,163			23,933			22,547			27,645			5,356			24.0	%		62,311			74,125			11,814			19.0	%
Insurance commissions		4,063			5,320			5,633			4,380			3,577			2,314			2,168			(3,465	)		-61.5	%		15,016			8,060			(6,957	)		-46.3	%
Insurance expenses		12,833			23,607			19,186			19,421			19,717			21,782			20,532			1,345			7.0	%		55,626			62,030			6,404			11.5	%
Interest expense		2,872			2,873			2,875			2,848			2,785			4,380			4,357			1,482			51.6	%		8,619			11,523			2,903			33.7	%
Operating benefits and expenses		87,246			95,615			102,050			107,633			107,521			111,008			115,435			13,385			13.1	%		284,912			333,964			49,053			17.2	%
Operating income before income taxes	$	40,987		$	36,027		$	39,663		$	37,045		$	44,283		$	51,722		$	48,577		$	8,915			22.5	%	$	116,676		$	144,583		$	27,907			23.9	%

Investment & Savings Products
Revenues:
Commissions and fees:
Sales-based	$	43,128		$	44,904		$	42,244		$	40,086		$	44,467		$	47,269		$	43,120		$	876			2.1	%	$	130,276		$	134,856		$	4,580			3.5	%
Asset-based		44,825			45,348			41,996			40,889			43,722			43,751			45,627			3,631			8.6	%		132,170			133,099			929			0.7	%
Account-based		10,432			11,811			10,140			9,615			9,373			9,494			9,826			(314	)		-3.1	%		32,382			28,693			(3,689	)		-11.4	%
Other, net		2,461			2,522			3,105			3,196			2,572			2,454			2,590			(515	)		-16.6	%		8,089			7,616			(473	)		-5.8	%
Operating revenues		100,846			104,586			97,486			93,786			100,133			102,967			101,163			3,678			3.8	%		302,917			304,264			1,347			0.4	%
Benefits and expenses:
Amortization of DAC		2,785			3,751			4,034			1,913			3,223			2,881			1,411			(2,623	)		-65.0	%		10,569			7,514			(3,055	)		-28.9	%
Insurance commissions		2,140			2,344			2,277			2,089			2,149			2,252			2,323			45			2.0	%		6,762			6,723			(38	)		-0.6	%
Sales commissions:
Sales-based		30,553			31,389			29,640			26,805			31,600			33,285			30,521			882			3.0	%		91,582			95,406			3,824			4.2	%
Asset-based		15,451			15,111			13,805			13,534			14,745			15,031			15,557			1,752			12.7	%		44,368			45,334			966			2.2	%
Other operating expenses		18,878			21,519			20,984			20,624			19,547			20,074			19,744			(1,240	)		-5.9	%		61,382			59,365			(2,016	)		-3.3	%
Operating benefits and expenses		69,807			74,115			70,740			64,964			71,264			73,523			69,556			(1,184	)		-1.7	%		214,662			214,342			(320	)		-0.1	%
Operating income before income taxes	$	31,039		$	30,470		$	26,746		$	28,821		$	28,869		$	29,444		$	31,608		$	4,862			18.2	%	$	88,255		$	89,922		$	1,667			1.9	%

Corporate & Other Distributed Products
Revenues:
Direct premiums	$	19,902		$	20,597		$	21,046		$	18,328		$	18,880		$	19,744		$	18,204		$	(2,841	)		-13.5	%	$	61,545		$	56,828		$	(4,717	)		-7.7	%
Ceded premiums		(3,585	)		(3,674	)		(3,710	)		(3,153	)		(3,604	)		(3,777	)		(3,752	)		(42	)		-1.1	%		(10,969	)		(11,133	)		(164	)		-1.5	%
Net premiums		16,317			16,924			17,336			15,174			15,276			15,967			14,453			(2,883	)		-16.6	%		50,576			45,695			(4,881	)		-9.7	%
Allocated net investment income		12,831			11,560

	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, key statistics, and financial analysis	11

Investment portfolio	12-14

Five-year historical key statistics	15

(1)	Capital in the debt-to-capital ratio includes stockholders' equity and the notes payable.
(2)	Share count reflects outstanding common shares, including restricted shares, but excludes restricted stock units (RSUs).

(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

Reconciliation of Statement of Income Non-GAAP to GAAP Financial Measures	PRIMERICA, INC.
	Financial Supplement