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

Segment operating results  

8

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

Investment portfolio  

13-15

Five-year historical key statistics  

16

Preface

PRIMERICA, INC.

Financial Supplement

•

Operating adjustments exclude the impact of realized investment gains/losses, including credit impairments, and mark-to-market (MTM) investment adjustments.  We exclude realized 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 with the Company's insurance operations.

•

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.

Estimated annualized issued term life premium (1)

($ in millions)

Revised Calculation

Q1 '15

Q2 '15

Q3 '15

Q4 '15

FY 2015

Q1 '16

Q2 '16

Q3 '16

Q4 '16

FY 2016

Q1 '17

Q2 '17

Q3 '17

Q4 '17

FY 2017

Q1 '18

Q2 '18

Q3 '18

Q4 '18

FY 2018

Q1 '19

Q2 '19

Q3 '19

Q4 '19

FY 2019

New

$44.0

$53.9

$52.9

$55.7

$206.5

$52.2

$61.4

$60.2

$64.0

$237.9

$57.6

$68.0

$64.0

$65.8

$255.4

$58.7

$69.2

$62.5

$60.4

$250.8

$54.1

$65.8

$63.1

$61.8

$244.8

Additions

9.9

10.8

10.6

11.0

42.3

10.7

11.9

11.6

12.2

46.4

11.5

12.5

12.4

13.1

49.5

12.9

14.2

13.8

14.3

55.2

13.8

15.8

15.1

15.4

60.2

  Total

$53.9

$64.7

$63.6

$66.7

$248.8

$62.9

$73.3

$71.8

$76.2

$284.3

$69.2

$80.6

$76.3

$78.9

$304.9

$71.7

$83.4

$76.3

$74.7

$306.0

$68.0

$81.6

$78.2

$77.2

$305.0

Prior Calculation

Q1 '15

Q2 '15

Q3 '15

Q4 '15

FY 2015

Q1 '16

Q2 '16

Q3 '16

Q4 '16

FY 2016

Q1 '17

Q2 '17

Q3 '17

Q4 '17

FY 2017

Q1 '18

Q2 '18

Q3 '18

Q4 '18

FY 2018

Q1 '19

Q2 '19

Q3 '19

Q4 '19

FY 2019

New

$45.1

$55.3

$54.5

$57.4

$212.4

$54.0

$63.1

$61.9

$66.2

$245.2

$59.4

$70.2

$65.8

$67.6

$263.1

$60.4

$71.1

$64.6

$62.4

$258.5

$56.1

$68.2

$65.2

$64.0

$253.5

Additions

12.8

14.0

13.7

14.4

54.9

14.0

15.4

15.2

15.9

60.4

15.1

16.5

16.4

17.5

65.5

16.9

18.7

18.4

19.1

73.0

18.4

20.8

20.1

20.5

79.7

  Total

$57.9

$69.3

$68.2

$71.8

$267.3

$68.0

$78.6

$77.1

$82.0

$305.7

$74.5

$86.7

$82.2

$85.1

$328.6

$77.3

$89.8

$82.9

$81.4

$331.5

$74.5

$89.0

$85.3

$84.5

$333.2

(1) Estimated annualized issued term life premium - estimated as average premium per $1,000 of face amounts issued on new policies and additions (before free look returns) multiplied by actual face amount issued on new policies, rider additions and face amount increases.

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

PRIMERICA, INC.

Financial Supplement

(Dollars in thousands)

Dec 31,

2018

Mar 31,

2019

Jun 30,

2019

Sep 30,

2019

Dec 31,

2019

Mar 31,

2020

Condensed Balance Sheets

Assets:

Investments and cash excluding securities held to maturity

$

2,422,734

$

2,471,745

$

2,557,033

$

2,617,685

$

2,730,715

$

2,626,043

Securities held to maturity

970,390

1,036,110

1,087,790

1,140,250

1,184,370

1,237,270

Total investments and cash

3,393,124

3,507,855

3,644,823

3,757,935

3,915,085

3,863,313

Due from reinsurers

4,141,569

4,202,903

4,185,850

4,166,362

4,169,823

4,132,897

Deferred policy acquisition costs

2,133,920

2,181,741

2,238,315

2,281,560

2,325,750

2,346,656

Other assets

730,933

814,854

811,426

818,029

792,128

799,122

Separate account assets

2,195,501

2,368,760

2,437,291

2,427,852

2,485,745

2,128,924

Total assets

$

12,595,047

$

13,076,112

$

13,317,706

$

13,451,737

$

13,688,531

$

13,270,911

Liabilities:

Future policy benefits

$

6,168,157

$

6,240,864

$

6,314,403

$

6,374,327

$

6,446,569

$

6,472,397

Other policy liabilities

700,094

703,123

717,265

714,930

744,087

737,435

Income taxes

187,104

206,180

206,301

207,453

209,221

208,357

Other liabilities

486,772

561,709

551,689

565,894

563,931

554,014

Notes payable

373,661

373,755

373,848

373,942

374,037

374,131

Surplus note

969,685

1,035,421

1,087,117

1,139,592

1,183,728

1,236,644

Payable under securities lending

52,562

64,914

43,867

39,933

28,723

28,896

Separate account liabilities

2,195,501

2,368,760

2,437,291

2,427,852

2,485,745

2,128,924

Total liabilities

11,133,535

11,554,726

11,731,781

11,843,924

12,036,040

11,740,797

Stockholders’ equity:

Common stock ($0.01 par value) (1)

427

424

420

415

412

405

Paid-in capital

(0

)

(0

)

(0

)

(0

)

(0

)

(0

)

Retained earnings

1,489,520

1,506,944

1,537,537

1,553,286

1,593,281

1,565,803

Treasury stock

—

—

—

—

—

—

Accumulated other comprehensive income (loss), net:

Net unrealized gains (losses)

(7,370

)

28,916

56,227

66,377

64,564

(1,318

)

Cumulative translation adjustment

(21,064

)

(14,897

)

(8,258

)

(12,265

)

(5,765

)

(34,776

)

Total stockholders’ equity

1,461,513

1,521,387

1,585,926

1,607,813

1,652,492

1,530,114

Total liabilities and stockholders' equity

$

12,595,047

$

13,076,112

$

13,317,706

$

13,451,737

$

13,688,531

$

13,270,911

Reconciliation of Total Stockholders' Equity to Adjusted Stockholders' Equity

Total stockholders' equity

$

1,461,513

$

1,521,387

$

1,585,926

$

1,607,813

$

1,652,492

$

1,530,114

Less: Net unrealized gains (losses)

(7,370

)

28,916

56,227

66,377

64,564

(1,318

)

Adjusted stockholders’ equity

$

1,468,882

$

1,492,471

$

1,529,699

$

1,541,436

$

1,587,928

$

1,531,431

Adjusted Stockholders' Equity Rollforward

Balance, beginning of period

$

1,447,972

$

1,468,882

$

1,492,471

$

1,529,699

$

1,541,436

$

1,587,928

Net Income

86,541

79,166

97,446

96,223

93,557

72,469

Shareholder dividends

(10,856

)

(14,628

)

(14,517

)

(14,324

)

(14,162

)

(16,530

)

Retirement of shares and warrants

(43,338

)

(60,288

)

(57,117

)

(70,679

)

(44,137

)

(95,676

)

Net foreign currency translation adjustment

(15,765

)

6,167

6,639

(4,007

)

6,500

(29,011

)

Other, net

4,328

13,171

4,778

4,524

4,734

12,252

Balance, end of period

$

1,468,882

$

1,492,471

$

1,529,699

$

1,541,436

$

1,587,928

$

1,531,431

Deferred Policy Acquisition Costs Rollforward

Balance, beginning of period

$

2,107,814

$

2,133,920

$

2,181,741

$

2,238,315

$

2,281,560

$

2,325,750

General expenses deferred

8,497

9,163

9,384

9,468

8,608

9,726

Commission costs deferred

96,697

98,196

100,498

100,913

97,538

104,793

Amortization of deferred policy acquisition costs

(66,184

)

(64,628

)

(58,762

)

(63,883

)

(67,279

)

(70,311

)

Foreign currency impact and other, net

(12,904

)

5,091

5,455

(3,254

)

5,322

(23,302

)

Balance, end of period

$

2,133,920

$

2,181,741

$

2,238,315

$

2,281,560

$

2,325,750

$

2,346,656

(1)

Outstanding common shares exclude restricted stock units.

Financial Results and Other Statistical Data

PRIMERICA, INC.

Financial Supplement

YOY Q1

(Dollars in thousands, except per-share data)

Q1

2019

Q2

2019

Q3

2019

Q4

2019

Q1

2020

$/#

Change

%

Change

Earnings per Share

Basic earnings per share:

Weighted-average common shares and fully vested equity awards

42,824,471

42,482,631

41,963,672

41,470,805

41,131,200

(1,693,271

)

-4.0

%

Net income

$

79,166

$

97,446

$

96,223

$

93,557

$

72,469

$

(6,697

)

-8.5

%

Less income attributable to unvested participating securities

(401

)

(428

)

(415

)

(402

)

(310

)

90

22.6

%

Net income used in computing basic EPS

$

78,765

$

97,018

$

95,808

$

93,155

$

72,159

$

(6,606

)

-8.4

%

Basic earnings per share

$

1.84

$

2.28

$

2.28

$

2.25

$

1.75

$

(0.08

)

-4.6

%

Adjusted net operating income

$

75,303

$

94,759

$

95,592

$

92,776

$

85,047

$

9,743

12.9

%

Less operating income attributable to unvested participating securities

(381

)

(416

)

(412

)

(399

)

(364

)

17

4.5

%

Adjusted net operating income used in computing basic operating EPS

$

74,922

$

94,343

$

95,181

$

92,377

$

84,682

$

9,761

13.0

%

Basic adjusted operating income per share

$

1.75

$

2.22

$

2.27

$

2.23

$

2.06

$

0.31

17.7

%

Diluted earnings per share:

Weighted-average common shares and fully vested equity awards

42,824,471

42,482,631

41,963,672

41,470,805

41,131,200

(1,693,271

)

-4.0

%

Dilutive impact of contingently issuable shares

118,014

135,719

135,887

143,224

107,361

(10,653

)

-9.0

%

Shares used to calculate diluted EPS

42,942,485

42,618,350

42,099,559

41,614,029

41,238,561

(1,703,924

)

-4.0

%

Net income

$

79,166

$

97,446

$

96,223

$

93,557

$

72,469

$

(6,697

)

-8.5

%

Less income attributable to unvested participating securities

(400

)

(427

)

(413

)

(401

)

(310

)

90

22.5

%

Net income used in computing diluted EPS

$

78,766

$

97,019

$

95,809

$

93,156

$

72,159

$

(6,606

)

-8.4

%

Diluted earnings per share

$

1.83

$

2.28

$

2.28

$

2.24

$

1.75

$

(0.08

)

-4.6

%

Adjusted net operating income

$

75,303

$

94,759

$

95,592

$

92,776

$

85,047

$

9,743

12.9

%

Less operating income attributable to unvested participating securities

(381

)

(415

)

(411

)

(398

)

(364

)

17

4.4

%

Adjusted net operating income used in computing diluted operating EPS

$

74,923

$

94,344

$

95,182

$

92,379

$

84,683

$

9,760

13.0

%

Diluted adjusted operating income per share

$

1.74

$

2.21

$

2.26

$

2.22

$

2.05

$

0.31

17.7

%

YOY Q1

Q1

2019

Q2

2019

Q3

2019

Q4

2019

Q1

2020

$/#

Change

%

Change

Annualized Return on Equity

Average stockholders' equity

$

1,491,450

$

1,553,656

$

1,596,869

$

1,630,152

$

1,591,303

$

99,853

6.7

%

Average adjusted stockholders' equity

$

1,480,676

$

1,511,085

$

1,535,567

$

1,564,682

$

1,559,680

$

79,003

5.3

%

Net income return on stockholders' equity

21.2

%

25.1

%

24.1

%

23.0

%

18.2

%

-3.0

%

nm

Net income return on adjusted stockholders' equity

21.4

%

25.8

%

25.1

%

23.9

%

18.6

%

-2.8

%

nm

Adjusted net operating income return on adjusted stockholders' equity

20.3

%

25.1

%

24.9

%

23.7

%

21.8

%

1.5

%

nm

Capital Structure

Debt-to-capital (1)

19.7

%

19.1

%

18.9

%

18.5

%

19.6

%

-0.1

%

nm

Cash and invested assets to stockholders' equity

2.3

x

2.3

x

2.3

x

2.4

x

2.5

x

0.2

x

nm

Cash and invested assets to adjusted stockholders' equity

2.4

x

2.4

x

2.4

x

2.5

x

2.5

x

0.2

x

nm

Share count, end of period (2)

42,398,643

42,008,450

41,491,998

41,206,504

40,459,767

(1,938,876

)

-4.6

%

Adjusted stockholders' equity per share

$

35.20

$

36.41

$

37.15

$

38.54

$

37.85

$

2.65

7.5

%

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)

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

(2)

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

2019

Q2

2019

Q3

2019

Q4

2019

Q1

2020

$

Change

%

Change

Statement of Income

Revenues:

Direct premiums

$

677,286

$

687,262

$

692,258

$

697,060

$

702,637

$

25,351

3.7

%

Ceded premiums

(389,795

)

(400,588

)

(388,982

)

(390,364

)

(386,825

)

2,970

0.8

%

Net premiums

287,491

286,675

303,276

306,696

315,813

28,322

9.9

%

Net investment income

24,111

24,868

22,675

22,418

15,420

(8,692

)

-36.0

%

Commissions and fees:

Sales-based (1)

66,997

71,438

69,034

75,418

80,891

13,895

20.7

%

Asset-based (2)

73,639

79,317

81,009

84,184

81,395

7,756

10.5

%

Account-based (3)

19,613

19,897

20,449

20,598

20,204

591

3.0

%

Other commissions and fees

7,066

7,817

9,227

8,103

7,579

512

7.3

%

Realized investment (losses) gains

2,847

1,067

285

766

(10,030

)

(12,877

)

nm

Other, net

13,223

13,825

14,698

13,778

13,665

442

3.3

%

                  Total revenues

494,988

504,903

520,654

531,959

524,936

29,949

6.1

%

Benefits and expenses:

Benefits and claims

122,284

115,068

128,684

127,784

134,813

12,529

10.2

%

Amortization of DAC

64,628

58,762

63,883

67,279

70,311

5,683

8.8

%

Insurance commissions

5,619

5,829

6,980

6,624

6,844

1,226

21.8

%

Insurance expenses

43,402

44,569

44,854

45,991

48,709

5,307

12.2

%

Sales commissions:

Sales-based (1)

47,831

50,679

48,652

52,529

56,561

8,730

18.3

%

Asset-based (2)

32,343

35,665

35,875

37,772

36,323

3,981

12.3

%

Other sales commissions

3,626

3,755

4,535

3,937

3,723

97

2.7

%

Interest expense

7,180

7,201

7,209

7,222

7,192

12

0.2

%

Other operating expenses

65,706

55,917

54,844

60,676

65,914

208

0.3

%

                  Total benefits and expenses

392,619

377,444

395,515

409,815

430,391

37,772

9.6

%

Income before income taxes

102,368

127,459

125,138

122,145

94,546

(7,823

)

-7.6

%

Income taxes

23,203

30,014

28,916

28,588

22,077

(1,126

)

-4.9

%

                  Net income

$

79,166

$

97,446

$

96,223

$

93,557

$

72,469

$

(6,697

)

-8.5

%

Income Before Income Taxes by Segment

Term Life

$

70,339

$

83,999

$

83,761

$

81,995

$

82,892

$

12,553

17.8

%

Investment & Savings Products

42,684

47,343

48,794