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

Preface

PRIMERICA, INC.

Financial Supplement

•

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 associated with the purchase of 80% 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, 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 prior to the dates they can ultimately be redeemed. 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.

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

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

Securities held to maturity

1,346,350

1,362,210

1,368,740

1,376,090

1,379,100

1,390,310

Total investments and cash

4,443,053

4,496,070

4,800,565

4,432,485

4,656,930

4,581,464

Due from reinsurers

4,273,904

4,345,483

4,239,510

4,278,322

4,268,419

4,240,481

Deferred policy acquisition costs

2,629,644

2,712,169

2,808,347

2,877,921

2,943,782

2,994,367

Goodwill

—

—

—

224,180

179,154

179,154

Other assets

899,165

921,236

925,621

1,330,620

1,274,946

1,242,457

Separate account assets

2,659,520

2,638,901

2,745,827

2,672,606

2,799,992

2,696,891

Total assets

$

14,905,286

$

15,113,858

$

15,519,871

$

15,816,135

$

16,123,222

$

15,934,813

Liabilities:

Future policy benefits

$

6,790,557

$

6,885,115

$

6,984,272

$

7,057,599

$

7,138,649

$

7,216,597

Other policy liabilities

984,612

1,020,349

977,373

1,054,925

1,103,642

1,108,047

Income taxes

223,496

235,233

204,197

260,264

241,311

217,326

Other liabilities

618,874

633,719

641,025

668,643

669,631

683,865

Debt obligations

374,415

374,511

499,606

514,702

607,102

598,303

Surplus note

1,345,772

1,361,648

1,368,194

1,375,559

1,378,585

1,389,811

Payable under securities lending

72,154

87,190

80,613

105,264

94,529

93,171

Separate account liabilities

2,659,520

2,638,901

2,745,827

2,672,606

2,799,992

2,696,891

Total liabilities

13,069,401

13,236,666

13,501,107

13,709,563

14,033,442

14,004,011

Redeemable noncontrolling interest

—

—

—

7,631

7,271

4,616

Stockholders’ equity:

Common stock ($0.01 par value) (1)

393

394

394

395

394

388

Paid-in capital

(0

)

8,138

12,880

17,454

5,224

(0

)

Retained earnings

1,705,786

1,785,037

1,894,539

1,988,324

2,004,506

1,980,467

Treasury stock

—

—

—

—

—

—

Accumulated other comprehensive income (loss), net:

Net unrealized gains (losses)

128,128

77,053

96,990

84,701

63,775

(66,439

)

Cumulative translation adjustment

1,578

6,570

13,960

8,068

8,611

11,769

Total stockholders’ equity (2)

1,835,885

1,877,192

2,018,764

2,098,941

2,082,510

1,926,185

Total liabilities and stockholders' equity

$

14,905,286

$

15,113,858

$

15,519,871

$

15,816,135

$

16,123,222

$

15,934,813

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

Less: Net unrealized gains (losses)

128,128

77,053

96,990

84,701

63,775

(66,439

)

Adjusted stockholders’ equity

$

1,707,757

$

1,800,139

$

1,921,774

$

2,014,241

$

2,018,735

$

1,992,624

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

Net Income attributable to Primerica, Inc.

100,084

97,872

128,162

112,456

34,868

81,418

Shareholder dividends

(15,851

)

(18,620

)

(18,660

)

(18,671

)

(18,686

)

(21,645

)

Retirement of shares and warrants

(13,426

)

(5,966

)

(521

)

(88

)

(18,829

)

(103,862

)

Net foreign currency translation adjustment

16,398

4,992

7,390

(5,892

)

543

3,158

Other, net

5,864

14,105

5,264

4,662

6,597

14,820

Balance, end of period

$

1,707,757

$

1,800,139

$

1,921,774

$

2,014,241

$

2,018,735

$

1,992,624

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

General expenses deferred

9,510

10,558

10,055

9,248

9,062

9,519

Commission costs deferred

128,084

134,188

136,085

129,287

124,515

123,739

Amortization of deferred policy acquisition costs

(53,342

)

(66,105

)

(54,286

)

(62,214

)

(68,575

)

(86,063

)

Foreign currency impact and other, net

12,984

3,884

4,324

(6,748

)

858

3,390

Balance, end of period

$

2,629,644

$

2,712,169

$

2,808,347

$

2,877,921

$

2,943,782

$

2,994,367

(1)

Outstanding common shares exclude restricted stock units.

(2)

Reflects the company's permanent stockholders' equity and does not include temporary stockholders' equity

Financial Results and Other Statistical Data

PRIMERICA, INC.

Financial Supplement

YOY Q1

(Dollars in thousands, except per-share data)

Q1

2021

Q2

2021

Q3

2021

Q4

2021

Q1

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

(234,945

)

-0.6

%

Net income attributable to Primerica, Inc.

$

97,872

$

128,162

$

112,456

$

34,868

$

81,418

$

(16,454

)

-16.8

%

Less income attributable to unvested participating securities

(417

)

(525

)

(458

)

(141

)

(337

)

80

19.1

%

Net income used in computing basic EPS

$

97,455

$

127,636

$

111,997

$

34,728

$

81,081

$

(16,374

)

-16.8

%

Basic earnings per share

$

2.47

$

3.23

$

2.83

$

0.88

$

2.07

$

(0.40

)

-16.3

%

Adjusted net operating income

$

97,129

$

129,355

$

118,708

$

117,007

$

83,333

$

(13,797

)

-14.2

%

Less operating income attributable to unvested participating securities

(414

)

(530

)

(484

)

(472

)

(345

)

69

16.6

%

Adjusted net operating income used in computing basic operating EPS

$

96,715

$

128,825

$

118,224

$

116,535

$

82,988

$

(13,728

)

-14.2

%

Basic adjusted operating income per share

$

2.45

$

3.26

$

2.99

$

2.95

$

2.12

$

(0.34

)

-13.7

%

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

(234,945

)

-0.6

%

Dilutive impact of contingently issuable shares

124,505

121,595

117,923

122,929

110,941

(13,564

)

-10.9

%

Shares used to calculate diluted EPS

39,580,453

39,652,286

39,678,709

39,691,399

39,331,944

(248,509

)

-0.6

%

Net income attributable to Primerica, Inc.

$

97,872

$

128,162

$

112,456

$

34,868

$

81,418

$

(16,454

)

-16.8

%

Less income attributable to unvested participating securities

(416

)

(524

)

(457

)

(140

)

(337

)

79

19.1

%

Net income used in computing diluted EPS

$

97,456

$

127,638

$

111,998

$

34,728

$

81,081

$

(16,374

)

-16.8

%

Diluted earnings per share

$

2.46

$

3.22

$

2.82

$

0.87

$

2.06

$

(0.40

)

-16.3

%

Adjusted net operating income

$

97,129

$

129,355

$

118,708

$

117,007

$

83,333

$

(13,797

)

-14.2

%

Less operating income attributable to unvested participating securities

(413

)

(529

)

(483

)

(471

)

(344

)

68

16.6

%

Adjusted net operating income used in computing diluted operating EPS

$

96,717

$

128,827

$

118,225

$

116,536

$

82,988

$

(13,728

)

-14.2

%

Diluted adjusted operating income per share

$

2.44

$

3.25

$

2.98

$

2.94

$

2.11

$

(0.33

)

-13.7

%

YOY Q1

Q1

2021

Q2

2021

Q3

2021

Q4

2021

Q1

2022

$/#

Change

%

Change

Annualized Return on Equity

Average stockholders' equity (1)

$

1,856,539

$

1,947,978

$

2,058,852

$

2,090,726

$

2,004,348

$

147,809

8.0

%

Average adjusted stockholders' equity  (1)

$

1,753,948

$

1,860,956

$

1,968,007

$

2,016,488

$

2,005,679

$

251,731

14.4

%

Net income attributable to Primerica, Inc. return on stockholders' equity

21.1

%

26.3

%

21.8

%

6.7

%

16.2

%

-4.8

%

nm

Net income attributable to Primerica, Inc. return on adjusted stockholders' equity

22.3

%

27.5

%

22.9

%

6.9

%

16.2

%

-6.1

%

nm

Adjusted net operating income return on adjusted stockholders' equity

22.2

%

27.8

%

24.1

%

23.2

%

16.6

%

-5.5

%

nm

Capital Structure

Debt-to-capital (2)

16.6

%

19.8

%

19.7

%

22.6

%

23.7

%

7.1

%

nm

Debt-to-capital, excluding AOCI (2)

17.3

%

20.8

%

20.4

%

23.2

%

23.2

%

5.9

%

nm

Cash and invested assets to stockholders' equity

2.4

x

2.4

x

2.1

x

2.2

x

2.4

x

(0.0

x)

nm

Cash and invested assets to adjusted stockholders' equity

2.5

x

2.5

x

2.2

x

2.3

x

2.3

x

(0.2

x)

nm

Share count, end of period (3)

39,414,085

39,443,561

39,470,748

39,367,754

38,751,885

(662,200

)

-1.7

%

Adjusted stockholders' equity per share

$

45.67

$

48.72

$

51.03

$

51.28

$

51.42

$

5.75

12.6

%

Financial Strength Ratings - Primerica Life Insurance Co

Moody's

A1

A1

A1

A1

A1

nm

nm

S&P

AA-

AA-

AA-

AA-

AA-

nm

nm

A.M. Best

A+

A+

A+

A+

A+

nm

nm

Holding Company Senior Debt Ratings

Moody's

Baa1

Baa1

Baa1

Baa1

Baa1

nm

nm

S&P

A-

A-

A-

A-

A-

nm

nm

A.M. Best

a-

a-

a-

a-

a-

nm

nm

(1)

Reflects the company's permanent stockholders' equity and does not include temporary stockholders' equity

(2)

Debt-to-capital is that of the parent company only.  Capital in the debt-to-capital ratio includes stockholders' equity and the note payable.

(3)

Share count reflects outstanding common shares, but excludes restricted stock units (RSUs).

Statements of Income

PRIMERICA, INC.

Financial Supplement

YOY Q1

(Dollars in thousands)

Q1

2021

Q2

2021

Q3

2021

Q4

2021

Q1

2022

$

Change

%

Change

Statement of Income

Revenues:

Direct premiums

$

762,227

$

780,299

$

785,277

$

794,344

$

798,666

$

36,439

4.8

%

Ceded premiums

(395,973

)

(413,850

)

(401,295

)

(405,147

)

(399,885

)

(3,913

)

-1.0

%

Net premiums

366,254

366,450

383,983

389,197

398,781

32,526

8.9

%

Net investment income

20,052

20,535

20,000

20,001

18,905

(1,148

)

-5.7

%

Commissions and fees:

Sales-based (1)

98,112

104,716

95,229

103,451

103,242

5,129

5.2

%

Asset-based (2)

101,241

108,490

113,558

118,015

113,112

11,871

11.7

%

Account-based (3)

21,120

21,848

21,456

22,514

21,541

421

2.0

%

Other commissions and fees

13,571

15,635

39,553

44,304

13,905

335

2.5

%

Investment (losses) gains

1,766

701

1,410

1,995

751

(1,015

)

-57.5

%

Other, net

15,595

16,313

18,051

24,616

20,988

5,394

34.6

%

                  Total revenues

637,711

654,687

693,240

724,094

691,225

53,514

8.4

%

Benefits and expenses:

Benefits and claims

183,789

168,347

183,425

187,192

187,069

3,280

1.8

%

Amortization of DAC

66,105

54,286

62,214

68,575

86,063

19,958

30.2

%

Insurance commissions

8,740

8,838

8,412

8,542

7,721

(1,019

)

-11.7

%

Insurance expenses

48,766

48,579

51,901

53,359

59,509

10,743

22.0

%

Sales commissions:

Sales-based (1)

68,594

73,629

67,745

77,390

74,606

6,011

8.8

%

Asset-based (2)

46,866

50,488

53,233

55,614

53,366

6,500

13.9

%

Other sales commissions

6,434

7,185

8,290

6,839

5,952

(482

)

-7.5

%

Interest expense

7,145

7,141

7,529

8,804

6,853

(292

)

-4.1

%

Contract acquisition costs (4)

—

—

23,524

29,264

20,649

20,649

#DIV/0

!

Other operating expenses

72,964

66,730

79,866

77,292

86,434

13,470

18.5

%

Goodwill impairment

—

—

—

76,000

—

—

#DIV/0

!

Loss on extinguishment of debt

—

—

—

8,927

—

—

#DIV/0

!

                  Total benefits and expenses

509,403

485,222

546,138

657,797

588,222

78,819

15.5

%

Income before income taxes

128,308

169,465

147,102

66,296

103,003

(25,305

)

-19.7

%

Income taxes

30,437

41,304

35,663

31,788

24,239

(6,197

)

-20.4

%

Net income

$

97,872

$

128,162

$

111,439

$

34,508

$

78,764

$

(19,108

)

-19.5

%

Net income attributable to noncontrolling interests

—

—

(1,017

)

(360

)

(2,654

)

(2,654

)

#DIV/0

!

Net Income attributable to Primerica, Inc.

$

97,872

$

128,162

$

112,456

$

34,868

$

81,418

$

(16,454

)

-16.8

%

Income Before Income Taxes by Segment

Term Life

$

88,236

$

116,778

$

107,589

$

102,019

$

91,577

$

3,341

3.8

%

Investment & Savings Products

63,363

71,154

69,369

70,699

64,560

1,197

1.9

%

Senior Health

—

—

(8,489

)

(76,561

)

(23,085

)

(23,085

)

#DIV/0

!

Corporate & Other Distributed Products

(23,290

)

(18,467

)

(21,367

)

(29,861

)

(30,048

)

(6,758

)

-29.0

%

Income before income taxes

$

128,308

$

169,465

$

147,102

$

66,296

$

103,003

$

(25,305

)

-19.7

%

(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.

(4)

Contract acquisition costs (CAC) - Includes direct marketing costs incurred to acquire Senior Health product leads through internal and external sources, including commissions paid to Primerica representatives, as well as ETQ agent compensation, training and licensing costs

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

PRIMERICA, INC.

Financial Supplement

YOY Q1

(Dollars in thousands)

Q1

2021

Q2

2021

Q3

2021

Q4

2021

Q1

2022

$

Change

%

Change

Reconciliation from Term Life Direct Premiums to Term Life Adjusted Direct Premiums

Term Life direct premiums

$

756,514

$

774,500

$

779,490

$

789,325

$

793,254

$

36,740

4.9

%

Less: Premiums ceded to IPO Coinsurers

249,944

246,874

241,439

239,828

234,614

(15,330

)

-6.1

%

Term Life adjusted direct premiums

$

506,570

$

527,626

$

538,051

$

549,496

$

558,640

$

52,070

10.3

%

Reconciliation from Term Life Ceded Premiums to Term Life Other Ceded Premiums