a50549445-ex992.htm

Preface

PRIMERICA, INC.

Financial Supplement

FOURTH QUARTER 2012

This document is a financial supplement to our fourth 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.

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 15

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

PRIMERICA, INC.

Financial Supplement

(Dollars in thousands)	Mar 31, 2011			Jun 30, 2011			Sep 30, 2011			Dec 31, 2011			Mar 31, 2012			Jun 30, 2012			Sep 30, 2012			Dec 31, 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		$	2,068,752
Due from reinsurers		3,769,599			3,793,995			3,818,759			3,855,318			3,895,162			3,903,028			3,993,603			4,005,194
Deferred policy acquisition costs		786,055			833,784			864,623			904,485			948,087			990,558			1,036,020			1,066,422
Other assets		582,079			567,482			586,647			525,836			522,123			540,010			597,465			556,669
Separate account assets		2,582,881			2,544,429			2,276,705			2,408,598			2,541,313			2,500,640			2,630,630			2,618,115
Total assets	$	10,050,712		$	10,036,703		$	9,866,607		$	9,851,820		$	10,073,917		$	9,951,077		$	10,434,439		$	10,315,153

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		$	4,850,488
Other policy liabilities		604,487			588,202			589,826			589,542			606,793			593,956			595,382			606,310
Income taxes		100,666			84,859			87,950			81,316			88,503			82,755			96,408			91,887
Other liabilities		396,195			363,181			389,319			381,495			331,112			329,539			424,706			358,577
Notes payable		300,000			300,000			300,000			300,000			300,000			300,000			374,421			374,433
Payable under securities lending		186,089			163,342			185,483			149,358			142,507			143,963			177,666			139,927
Separate account liabilities		2,582,881			2,544,429			2,276,705			2,408,598			2,541,313			2,500,640			2,630,630			2,618,115
Total liabilities		8,640,502			8,576,628			8,386,817			8,525,169			8,686,602			8,674,211			9,097,028			9,039,737
Stockholders’ equity:
Common stock ($0.01 par value) (1)		732			736			737			649			653			599			597			564
Paid-in capital		1,016,973			1,021,338			1,026,265			835,232			842,613			693,717			691,885			602,269
Retained earnings		240,739			276,089			308,912			344,104			383,847			426,936			468,223			503,173
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			114,958
Net unrealized investment losses other-than-temporarily impaired		(2,275	)		(2,275	)		(2,363	)		(1,665	)		(1,981	)		(2,031	)		(1,364	)		(1,035	)
Cumulative translation adjustment		57,498			58,541			46,982			51,248			54,584			50,457			58,234			55,488
Total stockholders’ equity		1,410,210			1,460,076			1,479,790			1,326,650			1,387,314			1,276,866			1,337,411			1,275,416
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		$	10,315,153

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		$	1,161,494
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			114,958
Net unrealized investment losses other-than-temporarily impaired		(2,275	)		(2,275	)		(2,363	)		(1,665	)		(1,981	)		(2,031	)		(1,364	)		(1,035	)
Total reconciling items		94,268			103,372			96,894			95,417			105,617			105,156			118,472			113,923
Total stockholders’ equity	$	1,410,210		$	1,460,076		$	1,479,790		$	1,326,650		$	1,387,314		$	1,276,866		$	1,337,411		$	1,275,416

Deferred Policy Acquisition Costs Rollforward
Balance, beginning of period	$	738,946		$	786,055		$	833,784		$	864,623		$	904,485		$	948,087		$	990,558		$	1,036,020
General expenses deferred		7,381			8,410			7,625			7,754			7,003			7,492			7,234			6,869
Commission costs deferred		56,822			62,091			61,785			58,793			60,116			66,540			61,238			60,349
Amortization of deferred policy acquisition costs		(23,229	)		(23,975	)		(26,645	)		(30,185	)		(26,531	)		(28,205	)		(29,234	)		(34,628	)
Foreign currency impact and other, net		6,135			1,203			(11,927	)		3,501			3,015			(3,356	)		6,223			(2,187	)
Balance, end of period	$	786,055		$	833,784		$	864,623		$	904,485		$	948,087		$	990,558		$	1,036,020		$	1,066,422

(1)	Outstanding common shares exclude restricted stock units.

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Financial Results and Other Statistical Data

PRIMERICA, INC.

Financial Supplement

																									YOY Q4											YOY YTD
(Dollars in thousands, except per-share data)	Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012			Q4 2012			Change			% Change		YTD 2011			YTD 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			57,415,577			(11,950,855	)	-17.2	%		72,283,068			61,059,404			(11,223,664	)	-15.5	%

Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	40,270		$	3,066		8.2	%	$	157,193		$	173,806		$	16,613		10.6	%
Less income attributable to unvested participating securities		(1,895	)		(1,097	)		(988	)		(1,111	)		(1,357	)		(1,110	)		(1,116	)		(1,026	)		84		7.6	%		(4,906	)		(4,650	)		256		5.2	%
Net income used in computing basic EPS	$	45,377		$	36,523		$	34,108		$	36,094		$	40,400		$	45,069		$	44,483		$	39,244		$	3,150		8.7	%	$	152,287		$	169,156		$	16,869		11.1	%
Basic earnings per share	$	0.62		$	0.50		$	0.46		$	0.52		$	0.62		$	0.73		$	0.74		$	0.68		$	0.16		31.4	%	$	2.11		$	2.77		$	0.66		31.5	%

Net operating income	$	43,441		$	38,592		$	37,301		$	36,652		$	42,377		$	45,455		$	45,103		$	41,603		$	4,950		13.5	%	$	155,987		$	174,538		$	18,551		11.9	%
Less operating income attributable to unvested participating securities		(1,741	)		(1,126	)		(1,051	)		(1,094	)		(1,377	)		(1,093	)		(1,104	)		(1,061	)		34		3.1	%		(4,868	)		(4,670	)		199		4.1	%
Net operating income used in computing basic operating EPS	$	41,700		$	37,467		$	36,250		$	35,558		$	41,000		$	44,362		$	43,999		$	40,542		$	4,984		14.0	%	$	151,119		$	169,868		$	18,749		12.4	%
Basic operating income per share	$	0.57		$	0.51		$	0.49		$	0.51		$	0.63		$	0.72		$	0.73		$	0.71		$	0.19		37.7	%	$	2.09		$	2.78		$	0.69		33.1	%

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			57,415,577			(11,950,855	)	-17.2	%		72,283,068			61,059,404			(11,223,664	)	-15.5	%
Dilutive impact of warrants		1,154,597			743,814			541,184			802,787			1,141,687			1,155,701			1,502,853			1,519,844			717,057		89.3	%		823,497			1,341,887			518,390		62.9	%
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			58,935,421			(11,233,798	)	-16.0	%		73,106,565			62,401,291			(10,705,274	)	-14.6	%

Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	40,270		$	3,066		8.2	%	$	157,193		$	173,806		$	16,613		10.6	%
Less income attributable to unvested participating securities		(1,867	)		(1,087	)		(982	)		(1,099	)		(1,335	)		(1,092	)		(1,092	)		(1,004	)		95		8.6	%		(4,855	)		(4,561	)		294		6.1	%
Net income used in computing diluted EPS	$	45,405		$	36,533		$	34,115		$	36,105		$	40,421		$	45,088		$	44,507		$	39,266		$	3,161		8.8	%	$	152,338		$	169,245		$	16,907		11.1	%
Diluted earnings per share	$	0.62		$	0.49		$	0.46		$	0.51		$	0.61		$	0.72		$	0.72		$	0.67		$	0.15		29.5	%	$	2.08		$	2.71		$	0.63		30.2	%

Net operating income	$	43,441		$	38,592		$	37,301		$	36,652		$	42,377		$	45,455		$	45,103		$	41,603		$	4,950		13.5	%	$	155,987		$	174,538		$	18,551		11.9	%
Less operating income attributable to unvested participating securities		(1,715	)		(1,115	)		(1,044	)		(1,083	)		(1,355	)		(1,074	)		(1,080	)		(1,037	)		45		4.2	%		(4,818	)		(4,580	)		237		4.9	%
Net operating income used in computing diluted operating EPS	$	41,726		$	37,477		$	36,257		$	35,570		$	41,022		$	44,381		$	44,023		$	40,566		$	4,996		14.0	%	$	151,169		$	169,958		$	18,788		12.4	%
Diluted operating income per share	$	0.57		$	0.51		$	0.49		$	0.51		$	0.62		$	0.71		$	0.72		$	0.69		$	0.18		35.8	%	$	2.07		$	2.72		$	0.66		31.7	%

																									YOY Q4											YOY YTD
	Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012			Q4 2012			Change			% Change		YTD 2011			YTD 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		$	1,306,413		$	(96,807	)	-6.9	%	$	1,422,916		$	1,325,656		$	(97,260	)	-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		$	1,190,216		$	(116,848	)	-8.9	%	$	1,325,350		$	1,217,177		$	(108,173	)	-8.2	%

Net income return on stockholders' equity		13.7	%		10.5	%		9.6	%		10.6	%		12.3	%		13.9	%		14.0	%		12.3	%		1.7	%	nm			11.0	%		13.1	%		2.1	%	nm
Net income return on adjusted stockholders' equity		14.7	%		11.3	%		10.2	%		11.4	%		13.3	%		15.1	%		15.3	%		13.5	%		2.1	%	nm			11.9	%		14.3	%		2.4	%	nm

Net operating income return on adjusted stockholders' equity		13.5	%		11.6	%		10.9	%		11.2	%		13.5	%		14.8	%		15.1	%		14.0	%		2.8	%	nm			11.8	%		14.3	%		2.6	%	nm

Capital Structure
Debt-to-capital (1)		17.5	%		17.0	%		16.9	%		18.4	%		17.8	%		19.0	%		21.9	%		22.7	%		4.3	%	nm			18.4	%		22.7	%		4.3	%	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		1.6	x		(0.0x	)	nm			1.6	x		1.6	x		(0.0x	)	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		1.8	x		0.0	x	nm			1.8	x		1.8	x		0.0	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			56,373,795			(8,508,848	)	-13.1	%		64,882,643			56,373,795			(8,508,848	)	-13.1	%
Adjusted stockholders' equity per share	$	17.98		$	18.43		$	18.75		$	18.98		$	19.63		$	19.57		$	20.41		$	20.60		$	1.63		8.6	%	$	18.98		$	20.60		$	1.63		8.6	%

Financial Strength Ratings - Primerica Life Insurance Co
Moody's	na			A2			A2			A2			A2			A2			A2			A2			nm			nm		nm			nm			nm			nm
S&P	AA-			AA-			AA-			AA-			AA-			AA-			AA-			AA-			nm			nm		nm			nm			nm			nm
A.M. Best	A+			A+			A+			A+			A+			A+			A+			A+			nm			nm		nm			nm			nm			nm
Fitch	A+			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			Baa2			nm			nm		nm			nm			nm			nm
S&P	na			A-			A-			A-			A-			A-			A-			A-			nm			nm		nm			nm			nm			nm
A.M. Best	na			a-			a-			a-			a-			a-			a-			a-			nm			nm		nm			nm			nm			nm

(1)	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).

																									YOY Q4												YOY YTD
(Dollars in thousands)	Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012			Q4 2012			$ Change			% Change			YTD 2011			YTD 2012			$ Change			% Change
Statement of Income
Revenues:
Direct premiums	$	552,069		$	560,881		$	560,739		$	555,778		$	561,037		$	570,073		$	567,273		$	569,591		$	13,813			2.5	%	$	2,229,467		$	2,267,975		$	38,508			1.7	%
Ceded premiums		(422,238	)		(435,564	)		(425,643	)		(419,630	)		(418,163	)		(415,814	)		(414,992	)		(414,783	)		4,847			1.2	%		(1,703,075	)		(1,663,753	)		39,322			2.3	%
Net premiums		129,831			125,317			135,096			136,148			142,874			154,259			152,282			154,808			18,660			13.7	%		526,392			604,222			77,830			14.8	%
Net investment income		28,626			27,229			27,103			25,644			26,097			23,605			26,882			24,221			(1,423	)		-5.5	%		108,601			100,804			(7,797	)		-7.2	%
Commissions and fees:
Sales-based (1)		43,128			44,904			42,244			40,086			44,467			47,269			43,120			50,142			10,055			25.1	%		170,362			184,998			14,635			8.6	%
Asset-based (2)		44,825			45,348			41,996			40,889			43,722			43,751			45,627			46,626			5,737			14.0	%		173,059			179,725			6,666			3.9	%
Account-based (3)		10,432			11,811			10,140			9,615			9,373			9,494			9,826			9,817			202			2.1	%		41,997			38,510			(3,487	)		-8.3	%
Other commissions and fees		7,731			6,635			6,502			6,693			6,343			6,248			5,764			6,188			(504	)		-7.5	%		27,560			24,543			(3,017	)		-10.9	%
Realized investment (losses) gains		327			2,035			(178	)		4,256			2,132			4,320			3,872			1,058			(3,198	)		-75.1	%		6,440			11,382			4,942			76.7	%
Other, net		11,452			11,816			12,887			12,526			11,594			11,581			11,715			11,642			(884	)		-7.1	%		48,681			46,532			(2,150	)		-4.4	%
Total revenues		276,352			275,095			275,790			275,855			286,601			300,525			299,087			304,501			28,646			10.4	%		1,103,093			1,190,715			87,622			7.9	%
Benefits and expenses:
Benefits and claims		57,635			57,272			64,101			63,688			67,933			68,925			70,738			71,151			7,463			11.7	%		242,696			278,747			36,051			14.9	%
Amortization of DAC		23,229			23,975			26,645			30,185			26,531			28,205			29,234			34,628			4,443			14.7	%		104,034			118,598			14,564			14.0	%
Insurance commissions		8,998			9,532			10,536			9,553			8,496			6,457			6,684			5,916			(3,636	)		-38.1	%		38,618			27,555			(11,064	)		-28.6	%
Insurance expenses		15,798			26,988			22,133			24,273			22,444			24,589			23,744			25,764			1,491			6.1	%		89,192			96,541			7,348			8.2	%
Sales commissions:
Sales-based (1)		30,553			31,389			29,640			26,805			31,600			33,285			30,521			34,508			7,703			28.7	%		118,387			129,914			11,527			9.7	%
Asset-based (2)		15,451			15,111			13,805			13,534			14,745			15,031			15,557			16,157			2,623			19.4	%		57,901			61,491			3,590			6.2	%
Other sales commissions		4,434			3,774			3,692			3,534			3,371			3,159			3,292			3,342			(192	)		-5.4	%		15,434			13,164			(2,270	)		-14.7	%
Interest expense		6,997			6,998			7,000			6,973			6,910			8,505			8,829			8,857			1,883			27.0	%		27,968			33,101			5,133			18.4	%
Other operating expenses		40,001			41,590			42,732			40,630			41,104			40,447			39,933			43,233			2,603			6.4	%		164,954			164,717			(237	)		-0.1	%
Total benefits and expenses		203,095			216,630			220,285			219,175			223,135			228,605			228,532			243,555			24,381			11.1	%		859,185			923,827			64,643			7.5	%
Income before income taxes		73,256			58,465			55,505			56,681			63,466			71,921			70,556			60,946			4,265			7.5	%		243,908			266,888			22,980			9.4	%
Income taxes		25,985			20,845			20,409			19,477			21,709			25,741			24,956			20,675			1,199			6.2	%		86,715			93,082			6,367			7.3	%
Net income	$	47,272		$	37,620		$	35,096		$	37,204		$	41,756		$	46,179		$	45,600		$	40,270		$	3,066			8.2	%	$	157,193		$	173,806		$	16,613			10.6	%

Income Before Income Taxes by Segment
Term Life	$	49,716		$	36,027		$	39,663		$	37,045		$	44,283		$	51,722		$	48,577		$	44,246		$	7,201			19.4	%	$	162,450		$	188,829		$	26,379			16.2	%
Investment & Savings Products		31,039			30,470			26,746			28,821			28,869			29,444			31,608			31,194			2,373			8.2	%		117,076			121,116			4,040			3.5	%
Corporate & Other Distributed Products		(7,498	)		(8,032	)		(10,903	)		(9,185	)		(9,687	)		(9,246	)		(9,629	)		(14,495	)		(5,309	)		-57.8	%		(35,618	)		(43,057	)		(7,439	)		-20.9	%
Income before income taxes	$	73,256		$	58,465		$	55,505		$	56,681		$	63,466		$	71,921		$	70,556		$	60,946		$	4,265			7.5	%	$	243,908		$	266,888		$	22,980			9.4	%

Reconciliation of Statement of Income Non-GAAP to GAAP Financial Measures

PRIMERICA, INC.

Financial Supplement


																										YOY Q4										YOY YTD
		Q1 2011			Q2 2011			Q3 2011			Q4 2011			Q1 2012			Q2 2012			Q3 2012			Q4 2012			$ Change	% Change			YTD 2011			YTD 2012			$ Change	% Change
(Dollars in thousands)
Reconciliation from Operating Revenues to Total Revenues
Operating revenues	$	267,296		$	273,060		$	275,968		$	271,600		$	284,469		$	296,206		$	295,215		$	303,443		$	31,844	11.7	%	$	1,087,924		$	1,179,333		$	91,409	8.4	%

Operating revenues reconciling items:
Realized investment gains/losses		327			2,035			(178	)		4,256			2,132			4,320			3,872			1,058			nm	nm			6,440			11,382			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			1,058			nm	nm			15,169			11,382			nm	nm

Total revenues	$	276,352		$	275,095		$	275,790		$	275,855		$	286,601		$	300,525		$	299,087		$	304,501		$	28,646	10.4	%	$	1,103,093			$1,190,715			$87,622	7.9	%


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		$	62,962		$	7,122	12.8	%	$	242,129		$	267,951		$	25,823	10.7	%

Operating income before income taxes reconciling items:
Realized investment gains/losses		327			2,035			(178	)		4,256			2,132			4,320			3,872			1,058			nm	nm			6,440			11,382			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	)		(3,074	)		nm	nm			(13,389	)		(12,445	)		nm	nm
Total operating income before income taxes reconciling items		5,936			(1,510	)		(3,487	)		841			(943	)		1,128			768			(2,016	)		nm	nm			1,779			(1,063	)		nm	nm

Income before income taxes	$	73,256		$	58,465		$	55,505		$	56,681		$	63,466		$	71,921		$	70,556		$	60,946		$	4,265	7.5	%	$	243,908			$ 266,888			$22,980	9.4	%


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		$	41,603		$	4,950	13.5	%	$	155,987		$	174,538		$	18,551	11.9	%

Net operating income reconciling items:
Operating income before income taxes reconciling items		5,936			(1,510	)		(3,487	)		841			(943	)		1,128			768			(2,016	)		nm	nm			1,779			(1,063	)		nm	nm
Tax impact of operating income reconciling items at effective tax rate		(2,105	)		539			1,282			(289	)		323			(404	)		(272	)		684			nm	nm			(574	)		331			nm	nm
Total net operating income reconciling items		3,830			(972	)		(2,205	)		552			(621	)		724			497			(1,332	)		nm	nm

	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)	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