Equibles

8-K

Primerica, Inc. (PRI)

8-K 2020-02-11 For: 2020-02-11
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported):      February 11, 2020

Primerica, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware 001-34680 27-1204330
(State or Other Jurisdiction of<br>Incorporation) (Commission File Number) (I.R.S. Employer<br>Identification Number)
1 Primerica Parkway<br><br><br>Duluth, Georgia 30099
(Address of Principal Executive Offices, and Zip Code)

(770) 381-1000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock PRI New York Stock Exchange

Item 2.02Results of Operations and Financial Condition.

On February 11, 2020, Primerica, Inc. (the “Company”) announced its results of operations for the quarter ended December 31, 2019. A copy of the press release is attached hereto as Exhibit 99.1.

The information provided pursuant to this Item 2.02, including Exhibit 99.1 in Item 9.01, is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, and shall not be incorporated by reference in any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except to the extent expressly set forth by specific reference in any such filings.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company presents certain non-GAAP financial measures.  Specifically, the Company presents adjusted direct premiums, other ceded premiums, adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income, adjusted stockholders’ equity and diluted adjusted operating earnings per share.  Adjusted direct premiums and other ceded premiums are net of amounts ceded under coinsurance transactions that were executed concurrent with our initial public offering (the “IPO coinsurance transactions”) for all periods presented. 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. Adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income and diluted adjusted operating earnings per share exclude the impact of realized investment gains (losses) and fair value mark-to-market (“MTM”) investment adjustments, including other-than-temporary impairments, for all periods presented. We exclude realized investment gains (losses) and MTM investment adjustments in measuring these non-GAAP financial measures to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains (losses) and market pricing variations prior to an invested asset’s maturity or sale that are not directly associated with the Company’s insurance operations.  In 2018, we excluded from adjusted net operating income and diluted adjusted operating earnings per share the one-time transition impact of adjustments made to finalize the provisional amounts recognized from the enactment of the Tax Cuts and Jobs Act of 2017 in order to present meaningful and useful period-over-period comparisons that could be distorted by the historically infrequent tax law change.  Adjusted stockholders’ equity excludes the impact of net unrealized investment gains (losses) recorded in accumulated other comprehensive income (loss) for all periods presented. We exclude unrealized investment gains (losses) in measuring adjusted stockholders’ equity as unrealized gains (losses) from the Company’s available-for-sale securities 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 available-for-sale security matures or is sold.

Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies.  Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.  Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.  These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Reconciliations of GAAP to non-GAAP financial measures are included as attachments to the press release which has been posted in the “Investor Relations” section of our website at http://investors.primerica.com.

Item 7.01Regulation FD Disclosure.

On February 11, 2020, the Company posted to the “Investor Relations” section of its website certain supplemental financial information relating to the quarter ended December 31, 2019.  A copy of the supplemental financial information is attached hereto as Exhibit 99.2.

The information provided pursuant to this Item 7.01, including Exhibit 99.2 in Item 9.01, is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section, and shall not be incorporated by reference in any filing made by the Company under the Exchange Act or the Securities Act, except to the extent expressly set forth by specific reference in any such filings.

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated February 11, 2019 – Primerica Reports Fourth Quarter 2019 Results
99.2 Primerica, Inc. Supplemental Financial Information –Fourth Quarter 2019
104 Cover Page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  February 11, 2020 PRIMERICA, INC.
/s/ Alison S. Rand
Alison S. Rand
Executive Vice President and Chief Financial Officer

4

pri-ex991_7.htm

Exhibit 99.1

PRIMERICA REPORTS FOURTH QUARTER 2019 RESULTS

Investment and Savings Products sales hit a new record at $2 billion; client asset values also reach record level at $71 billion

Term Life Insurance net premiums grow 9%; adjusted direct premiums grow 10%

Net earnings per diluted share (EPS) of $2.24, up 13%; return on stockholders’ equity (ROE) of 23.0%

Diluted adjusted operating EPS of $2.22, up 10%; adjusted net operating income return on adjusted stockholders’ equity (ROAE) of 23.7%

Board of Directors approves share repurchase program totaling $300 million through June 2021; $250 million in repurchases expected in 2020

Board of Directors approves 18% increase in dividends to $0.40 per share, payable on March 16, 2020

Duluth, GA, February 11, 2020 – Primerica, Inc. (NYSE: PRI) today announced financial results for the quarter ended December 31, 2019. Total revenues of $532.0 million increased 9% compared to the fourth quarter of 2018.  Net income of $93.6 million increased 8%, while earnings per diluted share of $2.24 increased 13% compared to the same quarter last year.  ROE was 23.0% for the current quarter.

Adjusted operating revenues were $530.9 million, increasing 9% compared to the fourth quarter of 2018. Adjusted net operating income of $92.8 million increased 6%, while diluted adjusted operating earnings per share of $2.22 increased 10% compared to the same quarter last year.  ROAE was 23.7% during the fourth quarter of 2019.

Financial results during the quarter reflect strong performance in both the Term Life and Investment and Savings Products (ISP) segments.  The Company’s Term Life segment saw revenues grow 9% year-over-year due principally to a 10% increase in adjusted direct premiums.  Pre-tax income in the Term Life segment increased 14%, reflecting favorable year-over-year trends in persistency.  The Company’s ISP segment saw

revenues increase 11% year-over-year due to robust sales and growth in client asset values.  Pre-tax income in the ISP segment increased 16% year-over-year due in part to lower Canadian segregated fund DAC amortization.  During the quarter, the Company repurchased $44 million of common stock for a total of $225 million during the year and in line with our goal.

Results for the full year ended December 31, 2019 also reflect strong financial performance in both of the Company’s core segments with Term Life and ISP income before taxes growing 14% and 10%, respectively.  Total revenues of $2.1 billion increased 8% year-over-year and set a new annual record for the Company.  Net income of $366.4 million and earnings per diluted share of $8.62 increased 13% and 18%, respectively, also representing new records.

“During 2019, we set new records in investment product sales and client asset values.  The solid financial results in both our Term Life and ISP segments drove record revenues and net income and we are beginning to see momentum in distribution,” said Glenn Williams, Chief Executive Officer.  “As we begin 2020, we are well positioned to deliver strong value to our clients, our field and our stockholders.”

Fourth Quarter Distribution & Segment Results

Distribution Results
Q4 2019 Q4 2018 % Change
Life-Licensed Sales Force ^(1)^ 130,522 130,736 *
Recruits 60,466 61,990 (2 )%
New Life-Licensed Representatives 11,073 11,052 *
Life Insurance Policies Issued 71,469 72,122 (1 )%
Life Productivity^(2)^ 0.18 0.18 *
ISP Product Sales ($ billions) $ 1.98 $ 1.74 14 %
Average Client Asset Values ($ billions) $ 68.24 $ 61.01 12 %
^(1)^ End of period
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^(2)^ Life productivity equals policies issued divided by the average number of life insurance licensed representatives per month
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*     Not calculated or less than 1%

Segment Results
Q4 2019 Q4 2018 % Change
( in thousands)
Adjusted Operating Revenues:
Term Life Insurance $ 291,941 9 %
Investment and Savings Products 164,924 11 %
Corporate and Other Distributed Products ^(1)^ 31,831 (8 )%
Total adjusted operating revenues ^(1)^ $ 488,696 9 %
Adjusted Operating Income (Loss) before<br><br><br>income taxes:
Term Life Insurance $ 72,117 14 %
Investment and Savings Products 45,647 16 %
Corporate and Other Distributed Products ^(1)^ ) (8,471 ) 64 %
Total adjusted operating income before<br><br><br>income taxes ^(1)^ $ 109,293 11 %

All values are in US Dollars.

^(1)^ See the Non-GAAP Financial Measures section and the Adjusted Operating Results reconciliation tables at the end of this release for additional information.

Life Insurance Licensed Sales Force

At the end of the year, the Company had 130,522 independent life-licensed representatives.  The total representative count remained largely unchanged year-over-year as a 3% annual decline in the number of individuals recruited was partly offset by an increase in licensing during the second half of 2019.

Term Life Insurance

Revenues of $319.0 million during the fourth quarter increased 9% compared to the fourth quarter of 2018, driven by 10% growth in adjusted direct premiums.  Persistency continues to trend favorably year-over-year but reflected seasonal weakness during the fourth quarter.  Overall, benefits and claims were in line with historical experience during the quarter, while insurance and other operating expenses increased largely due to growth in the business.  Pre-tax income of $82.0 million increased 14% year-over-year.

New life insurance policies issued during the fourth quarter was 71,469, down 1% compared to the same quarter in 2018.  Productivity for the quarter was 0.18 policies per life insurance licensed representative per month, consistent with the fourth quarter of 2018.

Investment and Savings Products

Revenues of $182.7 million during the fourth quarter increased 11% compared to the same quarter in 2018 driven by an increase in sales and higher average client asset values.  Total product sales during the current quarter were $2.0 billion, a 14% increase compared to the fourth quarter of 2018 due to higher sales of mutual funds and variable annuities.  Average client asset values were $68.2 billion, increasing 12% year-over-year, reflecting the recovery from the market correction during the fourth quarter of 2018 and solid market performance in 2019.  Net client inflows were $387 million, or 8% higher than the fourth quarter of 2018.

Pre-tax income of $53.0 million during the current quarter increased 16% year-over-year and benefited from a $2 million reduction in Canadian segregated fund DAC amortization due to both updated assumptions based on emerging redemption experience and favorable market performance.  Sales and asset-based commission expenses were generally consistent with the associated revenues while insurance and other operating expenses increased with higher allocated technology spending and employee related costs.

Corporate and Other Distributed Products

During the fourth quarter of 2019, the Company recorded an adjusted operating loss before taxes of $13.9 million compared to an adjusted operating loss before taxes of $8.5 million during the fourth quarter of 2018.  The year-over-year increase in pre-tax loss reflects growth of $2.0 million in insurance and other operating expenses, including higher technology costs, and a $1.7 million charge to benefits and claims to write-off amounts ceded on a closed block of business to a reinsurance counterparty ordered into receivership.

Net Investment Income

Consolidated net investment income during the quarter increased approximately $0.7 million due to an increase in the size of the invested asset portfolio and higher earnings on the deposit asset underlying the 10% coinsurance agreement.  These were partly offset by lower investment yields on reinvestment of maturing assets.  On a segment basis, we continue to see growth in investment income allocated from the Corporate and Other Distributed Products segment to the Term Life segment as the block of term business grows.

Taxes

In the fourth quarter of 2019, the effective income tax rate was 23.4%, in line with our full-year rate of 23.2%.  The effective tax rate was lower during the fourth quarter of 2018 due to an adjustment during the period related to the global intangible low-taxed income (“GILTI”) component of the 2017 Tax Reform.

Capital

During the fourth quarter of 2019, the Company repurchased 347,832 shares of common stock for $44 million, bringing the year-to-date total to $225 million.

The Board of Directors authorized the repurchase of up to $300 million of its common stock through June 30, 2021 and approved an 18% increase in stockholder dividends to $0.40 per share, payable on March 16, 2020, to stockholders of record on February 24, 2020.  The Company expects to repurchase $250 million of its common stock during 2020.

Primerica has a strong balance sheet and continues to be well-capitalized to meet future needs.  Primerica Life Insurance Company’s statutory risk-based capital (RBC) ratio was estimated to be about 440% as of December 31, 2019.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company presents certain non-GAAP financial measures.  Specifically, the Company presents adjusted direct premiums, other ceded premiums, adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income, adjusted stockholders’ equity and diluted adjusted operating earnings per share.  Adjusted direct premiums and other ceded premiums are net of amounts ceded under coinsurance transactions that were executed concurrent with our initial public offering (the “IPO coinsurance transactions”) for all periods presented.  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.  Adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income and diluted adjusted operating earnings per share exclude the impact of realized investment gains (losses) and fair value mark-to-market (“MTM”) investment adjustments, including other-than-temporary impairments (“OTTI”), for all periods presented.  We exclude realized investment gains (losses) and MTM investment adjustments in measuring these non-GAAP financial measures to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains (losses) and market pricing variations prior to an invested asset's maturity or sale that are not directly associated with the Company's insurance operations.  In 2018, we excluded from adjusted net operating income and diluted adjusted operating earnings per share the one-time transition impact of adjustments made to finalize the provisional amounts recognized from the enactment of the Tax Cuts and Jobs Act of 2017  in order to present meaningful and useful period-over-period comparisons that could be distorted by the historically infrequent tax law change.  Adjusted stockholders' equity excludes the impact of net unrealized investment gains (losses) recorded in accumulated other comprehensive income (loss) for all periods presented.  We exclude unrealized investment gains (losses) in measuring adjusted stockholders' equity as unrealized gains (losses) from the Company's available-for-sale securities 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 available-for-sale security matures or is sold.

Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies.  Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.  Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of the core ongoing business.  These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of the

Company’s results as reported under GAAP.  Reconciliations of GAAP to non-GAAP financial measures are attached to this release.

Earnings Webcast Information

Primerica will hold a webcast on Wednesday, February 12, 2020 at 10:00 am EST, to discuss the quarter’s results.  To access the webcast go to http://investors.primerica.com at least 15 minutes prior to the event to register, download and install any necessary software.  A replay of the call will be available for approximately 30 days on Primerica’s website, http://investors.primerica.com.  This release and a detailed financial supplement will be posted on Primerica’s website.

Forward-Looking Statements

Except for historical information contained in this press release, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from anticipated or projected results. Those risks and uncertainties include, among others, our failure to continue to attract and license new recruits, retain sales representatives or license or maintain the licensing of  sales representatives; new laws or regulations that could apply to our distribution model, which could require us to modify our distribution structure; changes to the independent contractor status of sales representatives; our or sales representatives’ violation of or non-compliance with laws and regulations; any failure to protect the confidentiality of client information; differences between our actual experience and our expectations regarding mortality or persistency as reflected in the pricing for our insurance policies; the occurrence of a catastrophic event; changes in federal,  state and provincial legislation or regulation that affects our insurance,  investment product, and mortgage businesses; our failure to meet regulatory capital ratios  or other minimum capital and surplus requirements; a downgrade or potential downgrade in our insurance subsidiaries’ financial strength ratings or our senior debt ratings; inadequate or unaffordable reinsurance or the failure of our reinsurers to perform their obligations; the failure of our investment products to remain competitive with other investment options or the change to investment and savings products offered by key providers in a way that is not beneficial to our business or a significant change in the competitive environment in which we operate; fluctuations in the performance of client assets under management; litigation and regulatory investigations and actions concerning us or sales representatives; heightened standards of conduct or more stringent licensing requirements for sales representatives; inadequate policies and procedures regarding suitability review of client transactions; the failure of, or legal challenges to, the support tools we provide to the sales force; the failure of our information technology systems, breach of our information security, failure of our business continuity plan or the loss of the Internet; the effects of credit deterioration and interest rate fluctuations on our invested asset portfolio; incorrectly valuing our investments; changes in accounting standards may impact how we record and report our financial condition and results of operations; economic down cycles that impact our business, financial condition and

results of operations; the inability of our subsidiaries to pay dividends or make distributions; our inability to generate and maintain a sufficient amount of working capital; our non-compliance with the covenants of our senior unsecured debt; the loss of key personnel or sales force leaders; and fluctuations in the market price of our common stock or  Canadian currency exchange rates. These and other risks and uncertainties affecting us are more fully described in our filings with the Securities and Exchange Commission, which are available in the "Investor Relations" section of our website at http://investors.primerica.com. Primerica assumes no duty to update its forward-looking statements as of any future date.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured over 5 million lives and had approximately 2.5 million client investment accounts at December 31, 2019. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in North America in 2018. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

Investor Contact:

Nicole Russell

470-564-6663 Email: investorrelations@primerica.com

Media Contact:

Keith Hancock

470-564-6328

Email: Keith.Hancock@Primerica.com

PRIMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
December 31, 2019 December 31, 2018
(In thousands)
Assets
Investments:
Fixed-maturity securities available-for-sale, at fair value $ 2,356,996 $ 2,069,635
Fixed-maturity security held-to-maturity, at amortized cost 1,184,370 970,390
Short-term investments available-for-sale, at fair value - 8,171
Equity securities, at fair value 40,684 37,679
Trading securities, at fair value 43,233 13,610
Policy loans 32,927 31,501
Total investments 3,658,210 3,130,986
Cash and cash equivalents 256,876 262,138
Accrued investment income 17,361 17,057
Reinsurance recoverables 4,169,823 4,141,569
Deferred policy acquisition costs, net 2,325,750 2,133,920
Agent balances, due premiums and other receivables ^1^ 227,100 215,139
Intangible assets, net 45,275 48,111
Income taxes 70,492 59,336
Operating lease right-of-use assets 47,265 -
Other assets ^1^ 384,634 391,291
Separate account assets 2,485,745 2,195,501
Total assets $ 13,688,531 $ 12,595,048
Liabilities and Stockholders' Equity
Liabilities:
Future policy benefits $ 6,446,569 $ 6,168,157
Unearned and advance premiums 15,470 15,587
Policy claims and other benefits payable 339,954 313,862
Other policyholders' funds 388,663 370,644
Notes payable 374,037 373,661
Surplus note 1,183,728 969,685
Income taxes 209,221 187,104
Operating lease liabilities 53,487 -
Other liabilities 510,443 486,772
Payable under securities lending 28,723 52,562
Separate account liabilities 2,485,745 2,195,501
Total liabilities 12,036,040 11,133,535
Stockholders' equity:
Common stock 412 427
Paid-in capital - -
Retained earnings 1,593,281 1,489,520
Accumulated other comprehensive income (loss),<br><br><br>net of income tax 58,798 (28,434 )
Total stockholders' equity 1,652,491 1,461,513
Total liabilities and stockholders' equity $ 13,688,531 $ 12,595,048
(1) Certain reclassifications have been made to the December 31, 2018 amounts to conform to current-period reporting classifications.  These reclassifications had no impact on net income or total stockholders’ equity.
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PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- ---
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended December 31,
2019 2018
(In thousands, except per-share amounts)
Revenues:
Direct premiums $ 697,060 $ 673,605
Ceded premiums (390,364 ) (392,290 )
Net premiums 306,696 281,315
Commissions and fees 188,302 171,960
Net investment income 22,418 21,760
Realized investment gains (losses), including OTTI 766 (1,651 )
Other, net 13,778 13,941
Total revenues 531,960 487,325
Benefits and expenses:
Benefits and claims 127,784 116,837
Amortization of deferred policy acquisition costs 67,279 66,184
Sales commissions 94,238 85,323
Insurance expenses 45,991 41,671
Insurance commissions 6,624 5,612
Interest expense 7,222 7,192
Other operating expenses 60,677 56,584
Total benefits and expenses 409,815 379,403
Income before income taxes 122,145 107,922
Income taxes 28,588 21,381
Net income $ 93,557 $ 86,541
Earnings per share:
Basic earnings per share $ 2.25 $ 1.99
Diluted earnings per share $ 2.24 $ 1.99
Weighted-average shares used in computing<br><br><br>earnings per share:
Basic 41,471 43,180
Diluted 41,614 43,311
PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- ---
Condensed Consolidated Statements of Income
(Unaudited)
Year ended December 31,
2019 2018
(In thousands, except per-share amounts)
Revenues:
Direct premiums $ 2,753,866 $ 2,667,104
Ceded premiums (1,569,729 ) (1,581,164 )
Net premiums 1,184,137 1,085,940
Commissions and fees 713,804 677,607
Net investment income 94,073 81,430
Realized investment gains (losses), including OTTI 4,965 (2,121 )
Other, net 55,525 56,987
Total revenues 2,052,504 1,899,843
Benefits and expenses:
Benefits and claims 493,820 457,583
Amortization of deferred policy acquisition costs 254,552 239,730
Sales commissions 357,198 335,384
Insurance expenses 178,817 168,156
Insurance commissions 25,051 24,490
Interest expense 28,811 28,809
Other operating expenses 237,144 229,607
Total benefits and expenses 1,575,393 1,483,759
Income before income taxes 477,111 416,084
Income taxes 110,720 91,990
Net income $ 366,391 $ 324,094
Earnings per share:
Basic earnings per share $ 8.65 $ 7.35
Diluted earnings per share $ 8.62 $ 7.33
Shares used in computing earnings per share:
Basic 42,181 43,854
Diluted 42,314 43,985
PRIMERICA, INC. AND SUBSIDIARIES
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Consolidated Adjusted Operating Results Reconciliation
(Unaudited – in thousands, except per share amounts)
Three months ended December 31,
2019 2018 % Change
Total revenues $ 531,960 $ 487,325 9 %
Less: Realized investment gains (losses), including OTTI 766 (1,651 )
Less: 10% deposit asset MTM included in net<br><br><br>investment income (NII) 254 280
Adjusted operating revenues $ 530,940 $ 488,696 9 %
Income before income taxes $ 122,145 $ 107,922 13 %
Less: Realized investment gains (losses), including OTTI 766 (1,651 )
Less: 10% deposit asset MTM included in NII 254 280
Adjusted operating income before income taxes $ 121,125 $ 109,293 11 %
Net income $ 93,557 $ 86,541 8 %
Less: Realized investment gains (losses), including OTTI 766 (1,651 )
Less: 10% deposit asset MTM included in NII 254 280
Less: Tax impact of preceding items (239 ) 272
Adjusted net operating income $ 92,776 $ 87,640 6 %
Diluted earnings per share ^(1)^ $ 2.24 $ 1.99 13 %
Less: Net after-tax impact of operating adjustments 0.02 (0.02 )
Diluted adjusted operating earnings per share ^(1)^ $ 2.22 $ 2.01 10 %
^(1)^ Percentage change in earnings per share is calculated prior to rounding per share amounts.
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PRIMERICA, INC. AND SUBSIDIARIES
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Consolidated Adjusted Operating Results Reconciliation
(Unaudited – in thousands, except per share amounts)
Year ended December 31,
2019 2018 % Change
Total revenues $ 2,052,504 $ 1,899,843 8 %
Less: Realized investment gains (losses), including OTTI 4,965 (2,121 )
Less: 10% deposit asset MTM included in net<br><br><br>investment income (NII) 5,382 (1,680 )
Adjusted operating revenues $ 2,042,157 $ 1,903,644 7 %
Income before income taxes $ 477,111 $ 416,084 15 %
Less: Realized investment gains (losses), including OTTI 4,965 (2,121 )
Less: 10% deposit asset MTM included in NII 5,382 (1,680 )
Adjusted operating income before income taxes $ 466,764 $ 419,885 11 %
Net income $ 366,391 $ 324,094 13 %
Less: Realized investment gains (losses), including OTTI 4,965 (2,121 )
Less: 10% deposit asset MTM included in NII 5,382 (1,680 )
Less: Tax impact of preceding items (2,387 ) 827
Less: Transition impact of tax reform - 2,737
Adjusted net operating income $ 358,431 $ 324,331 11 %
Diluted earnings per share ^(1)^ $ 8.62 $ 7.33 18 %
Less: Net after-tax impact of operating adjustments (0.19 ) 0.00
Diluted adjusted operating earnings per share ^(1)^ $ 8.43 $ 7.33 15 %
^(1)^ Percentage change in earnings per share is calculated prior to rounding per share amounts.
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TERM LIFE INSURANCE SEGMENT
--- --- --- --- --- --- --- --- --- ---
Adjusted Premiums Reconciliation
(Unaudited – in thousands)
Three months ended December 31,
2019 2018 % Change
Direct premiums $ 691,546 $ 667,776 4 %
Less: Premiums ceded to IPO coinsurers 264,786 281,265
Adjusted direct premiums $ 426,760 $ 386,511 10 %
Ceded premiums $ (388,237 ) $ (390,173 )
Less: Premiums ceded to IPO coinsurers (264,786 ) (281,265 )
Other ceded premiums $ (123,451 ) $ (108,908 )
Net premiums $ 303,309 $ 277,603 9 %
CORPORATE AND OTHER DISTRIBUTED PRODUCTS SEGMENT
--- --- --- --- --- --- --- --- --- ---
Adjusted Operating Results Reconciliation
(Unaudited – in thousands)
Three months ended December 31,
2019 2018 % Change
Total revenues $ 30,270 $ 30,460 (1 )%
Less: Realized investment gains (losses), including OTTI 766 (1,651 )
Less: 10% deposit asset MTM included in NII 254 280
Adjusted operating revenues $ 29,250 $ 31,831 (8 )%
Loss before income taxes $ (12,841 ) $ (9,842 ) 30 %
Less: Realized investment gains (losses), including OTTI 766 (1,651 )
Less: 10% deposit asset MTM included in NII 254 280
Adjusted operating loss before income taxes $ (13,861 ) $ (8,471 ) 64 %
PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- --- --- ---
Adjusted Stockholders' Equity Reconciliation
(Unaudited – in thousands)
December 31, 2019 December 31, 2018 % Change
Stockholders' equity $ 1,652,491 $ 1,461,513 13 %
Less: Unrealized net investment gains (losses) recorded<br><br><br>in stockholders' equity, net of income tax 64,563 (7,370 )
Adjusted stockholders' equity $ 1,587,928 $ 1,468,883 8 %

13

pri-ex992_6.htm

Exhibit 99.2

Supplemental Financial Information

Fourth Quarter 2019

Table of Contents PRIMERICA, INC.<br><br><br>Financial Supplement
Page
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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

This document may contain forward-looking statements and information.  Additional information and factors that could cause actual results to differ materially from any forward-looking statements or information in this document is available in our Form 10-K for the year ended December 31, 2018.

2 of 16

Preface PRIMERICA, INC.<br><br><br>Financial Supplement

Fourth Quarter 2019

This document is a financial supplement to our fourth quarter 2019 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 three different purposes, as follows:

• Operating adjustments exclude the impact of realized investment gains/losses, mark-to-market (MTM) investment adjustments, and the one-time transition impact of the Tax Cuts and Jobs Act of 2017 (Tax Reform).  We exclude realized investment gains/losses 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.  We exclude the provisional one-time transition impact from Tax Reform recognized in the fourth quarter of 2017, as well as all adjustments recognized in 2018 to the provisional one-time transition impact, to present meaningful and useful period-over-period comparisons that could be distorted by this historically infrequent tax law change.
• 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.
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• 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.
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Management utilizes these 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.

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 16

Condensed Balance Sheets and Reconciliation of Balance Sheet Non-GAAP to GAAP Financial Measures PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in thousands) Dec 31,<br><br><br>2017 Mar 31,<br><br><br>2018 Jun 30,<br><br><br>2018 Sep 30,<br><br><br>2018 Dec 31,<br><br><br>2018 Mar 31,<br><br><br>2019 Jun 30,<br><br><br>2019 Sep 30,<br><br><br>2019 Dec 31,<br><br><br>2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Condensed Balance Sheets
Assets:
Investments and cash excluding securities held to maturity $ 2,287,955 $ 2,254,512 $ 2,239,045 $ 2,322,453 $ 2,422,734 $ 2,471,745 $ 2,557,033 $ 2,617,685 $ 2,730,715
Securities held to maturity 737,150 796,450 843,810 891,860 970,390 1,036,110 1,087,790 1,140,250 1,184,370
Total investments and cash 3,025,105 3,050,962 3,082,855 3,214,313 3,393,124 3,507,855 3,644,823 3,757,935 3,915,085
Due from reinsurers 4,205,173 4,263,111 4,199,275 4,196,021 4,141,569 4,202,903 4,185,850 4,166,362 4,169,823
Deferred policy acquisition costs 1,951,892 1,998,985 2,053,445 2,107,814 2,133,920 2,181,741 2,238,315 2,281,560 2,325,750
Other assets 705,661 759,973 772,058 769,387 730,933 814,854 811,426 818,029 792,128
Separate account assets 2,572,872 2,419,707 2,389,007 2,419,997 2,195,501 2,368,760 2,437,291 2,427,852 2,485,745
Total assets $ 12,460,704 $ 12,492,737 $ 12,496,640 $ 12,707,531 $ 12,595,047 $ 13,076,112 $ 13,317,706 $ 13,451,737 $ 13,688,531
Liabilities:
Future policy benefits $ 5,954,524 $ 6,004,101 $ 6,057,112 $ 6,132,750 $ 6,168,157 $ 6,240,864 $ 6,314,403 $ 6,374,327 $ 6,446,569
Other policy liabilities 685,885 693,223 673,912 682,126 700,094 703,123 717,265 714,930 744,087
Income taxes 177,468 184,161 182,140 182,241 187,104 206,180 206,301 207,453 209,221
Other liabilities 451,398 506,535 495,242 511,623 486,772 561,709 551,689 565,894 563,931
Notes payable 373,288 373,381 373,474 373,567 373,661 373,755 373,848 373,942 374,037
Surplus note 736,381 795,697 843,073 891,139 969,685 1,035,421 1,087,117 1,139,592 1,183,728
Payable under securities lending 89,786 89,433 82,096 70,632 52,562 64,914 43,867 39,933 28,723
Separate account liabilities 2,572,872 2,419,707 2,389,007 2,419,997 2,195,501 2,368,760 2,437,291 2,427,852 2,485,745
Total liabilities 11,041,603 11,066,237 11,096,056 11,264,074 11,133,535 11,554,726 11,731,781 11,843,924 12,036,040
Stockholders’ equity:
Common stock (0.01 par value) (1) 443 440 432 430 427 424 420 415 412
Paid-in capital (0 ) (0 ) (0 ) (0 ) (0 ) (0 ) (0 ) (0 ) (0 )
Retained earnings 1,375,090 1,416,564 1,409,104 1,452,841 1,489,520 1,506,944 1,537,537 1,553,286 1,593,281
Treasury stock — — — — — — — — —
Accumulated other comprehensive income (loss), net:
39,686 14,039 1,493 (4,380 ) (7,253 ) 29,022 56,287 66,423 64,595
(113 ) (136 ) (136 ) (135 ) (116 ) (106 ) (60 ) (46 ) (31 )
3,995 (4,406 ) (10,309 ) (5,300 ) (21,064 ) (14,897 ) (8,258 ) (12,265 ) (5,765 )
Total stockholders’ equity 1,419,101 1,426,500 1,400,584 1,443,456 1,461,513 1,521,387 1,585,926 1,607,813 1,652,492
Total liabilities and stockholders' equity $ 12,460,704 $ 12,492,737 $ 12,496,640 $ 12,707,531 $ 12,595,047 $ 13,076,112 $ 13,317,706 $ 13,451,737 $ 13,688,531
Reconciliation of Adjusted Stockholders' Equity to Total Stockholders' Equity
Adjusted stockholders' equity $ 1,379,528 $ 1,412,597 $ 1,399,227 $ 1,447,972 $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436 $ 1,587,928
Reconciling items:
Net unrealized investment gains (losses) not other-than-temporarily impaired 39,686 14,039 1,493 (4,380 ) (7,253 ) 29,022 56,287 66,423 64,595
Net unrealized investment losses other-than-temporarily impaired (113 ) (136 ) (136 ) (135 ) (116 ) (106 ) (60 ) (46 ) (31 )
39,573 13,903 1,357 (4,515 ) (7,370 ) 28,916 56,227 66,377 64,564
Total stockholders’ equity $ 1,419,101 $ 1,426,500 $ 1,400,584 $ 1,443,456 $ 1,461,513 $ 1,521,387 $ 1,585,926 $ 1,607,813 $ 1,652,492
Adjusted Stockholders' Equity Rollforward
Balance, beginning of period $ 1,233,482 $ 1,379,528 $ 1,412,597 $ 1,399,227 $ 1,447,972 $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436
Net Income 168,443 65,714 86,699 85,139 86,541 79,166 97,446 96,223 93,557
Shareholder dividends (9,020 ) (11,278 ) (11,086 ) (10,920 ) (10,856 ) (14,628 ) (14,517 ) (14,324 ) (14,162 )
Retirement of shares and warrants (17,318 ) (51,563 ) (87,448 ) (34,508 ) (43,338 ) (60,288 ) (57,117 ) (70,679 ) (44,137 )
Net foreign currency translation adjustment (497 ) (8,402 ) (5,903 ) 5,009 (15,765 ) 6,167 6,639 (4,007 ) 6,500
Other, net 4,437 38,598 4,367 4,024 4,328 13,171 4,778 4,524 4,734
Balance, end of period $ 1,379,528 $ 1,412,597 $ 1,399,227 $ 1,447,972 $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436 $ 1,587,928
Deferred Policy Acquisition Costs Rollforward
Balance, beginning of period $ 1,900,122 $ 1,951,892 $ 1,998,985 $ 2,053,445 $ 2,107,814 $ 2,133,920 $ 2,181,741 $ 2,238,315 $ 2,281,560
General expenses deferred 8,887 9,599 9,800 8,886 8,497 9,163 9,384 9,468 8,608
Commission costs deferred 99,411 104,314 103,192 100,890 96,697 98,196 100,498 100,913 97,538
Amortization of deferred policy acquisition costs (56,304 ) (60,165 ) (53,847 ) (59,534 ) (66,184 ) (64,628 ) (58,762 ) (63,883 ) (67,279 )
Foreign currency impact and other, net (224 ) (6,655 ) (4,684 ) 4,127 (12,904 ) 5,091 5,455 (3,254 ) 5,322
Balance, end of period $ 1,951,892 $ 1,998,985 $ 2,053,445 $ 2,107,814 $ 2,133,920 $ 2,181,741 $ 2,238,315 $ 2,281,560 $ 2,325,750

All values are in US Dollars.

(1) Outstanding common shares exclude restricted stock units.

4 of 16

Financial Results and Other Statistical Data PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except per-share data) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 /#<br>Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 /#<br>Change %<br><br><br>Change
Earnings per Share
Basic earnings per share:
Weighted-average common shares and fully vested equity awards 44,739,864 44,065,972 43,452,234 43,179,898 42,824,471 42,482,631 41,963,672 41,470,805 ) -4.0 % 43,854,102 42,181,079 ) -3.8%
Net income $ 65,714 $ 86,699 $ 85,139 $ 86,541 $ 79,166 $ 97,446 $ 96,223 $ 93,557 8.1 % $ 324,093 $ 366,391 13.1%
Less income attributable to unvested participating securities (425 ) (483 ) (485 ) (487 ) (401 ) (428 ) (415 ) (402 ) 17.5 % (1,894 ) (1,654 ) 12.6%
Net income used in computing basic EPS $ 65,289 $ 86,216 $ 84,654 $ 86,054 $ 78,765 $ 97,018 $ 95,808 $ 93,155 8.3 % $ 322,200 $ 364,736 13.2%
Basic earnings per share $ 1.46 $ 1.96 $ 1.95 $ 1.99 $ 1.84 $ 2.28 $ 2.28 $ 2.25 12.7 % $ 7.35 $ 8.65 17.7%
Adjusted net operating income $ 66,215 $ 85,984 $ 84,489 $ 87,641 $ 75,303 $ 94,759 $ 95,592 $ 92,776 5.9 % $ 324,330 $ 358,431 10.5%
Less operating income attributable to unvested participating securities (428 ) (479 ) (482 ) (493 ) (381 ) (416 ) (412 ) (399 ) 19.2 % (1,895 ) (1,618 ) 14.6%
Adjusted net operating income used in computing basic operating EPS $ 65,787 $ 85,506 $ 84,008 $ 87,147 $ 74,922 $ 94,343 $ 95,181 $ 92,377 6.0 % $ 322,435 $ 356,812 10.7%
Basic adjusted operating income per share $ 1.47 $ 1.94 $ 1.93 $ 2.02 $ 1.75 $ 2.22 $ 2.27 $ 2.23 10.4 % $ 7.35 $ 8.46 15.1%
Diluted earnings per share:
Weighted-average common shares and fully vested equity awards 44,739,864 44,065,972 43,452,234 43,179,898 42,824,471 42,482,631 41,963,672 41,470,805 ) -4.0 % 43,854,102 42,181,079 ) -3.8%
Dilutive impact of contingently issuable shares 115,421 140,567 136,628 131,384 118,014 135,719 135,887 143,224 9.0 % 131,046 133,211 1.7%
Shares used to calculate diluted EPS 44,855,285 44,206,539 43,588,862 43,311,282 42,942,485 42,618,350 42,099,559 41,614,029 ) -3.9 % 43,985,148 42,314,290 ) -3.8%
Net income $ 65,714 $ 86,699 $ 85,139 $ 86,541 $ 79,166 $ 97,446 $ 96,223 $ 93,557 8.1 % $ 324,093 $ 366,391 13.1%
Less income attributable to unvested participating securities (424 ) (481 ) (484 ) (486 ) (400 ) (427 ) (413 ) (401 ) 17.5 % (1,889 ) (1,650 ) 12.6%
Net income used in computing diluted EPS $ 65,290 $ 86,217 $ 84,655 $ 86,055 $ 78,766 $ 97,019 $ 95,809 $ 93,156 8.3 % $ 322,205 $ 364,741 13.2%
Diluted earnings per share $ 1.46 $ 1.95 $ 1.94 $ 1.99 $ 1.83 $ 2.28 $ 2.28 $ 2.24 12.7 % $ 7.33 $ 8.62 17.7%
Adjusted net operating income $ 66,215 $ 85,984 $ 84,489 $ 87,641 $ 75,303 $ 94,759 $ 95,592 $ 92,776 5.9 % $ 324,330 $ 358,431 10.5%
Less operating income attributable to unvested participating securities (427 ) (478 ) (480 ) (492 ) (381 ) (415 ) (411 ) (398 ) 19.2 % (1,890 ) (1,614 ) 14.6%
Adjusted net operating income used in computing diluted operating EPS $ 65,788 $ 85,507 $ 84,009 $ 87,149 $ 74,923 $ 94,344 $ 95,182 $ 92,379 6.0 % $ 322,440 $ 356,817 10.7%
Diluted adjusted operating income per share $ 1.47 $ 1.93 $ 1.93 $ 2.01 $ 1.74 $ 2.21 $ 2.26 $ 2.22 10.3 % $ 7.33 $ 8.43 15.0%

All values are in US Dollars.

YOY Q4 YOY YTD
Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 /#<br>Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 /#<br>Change %<br><br><br>Change
Annualized Return on Equity
Average stockholders' equity $ 1,422,801 $ 1,413,542 $ 1,422,020 $ 1,452,485 $ 1,491,450 $ 1,553,656 $ 1,596,869 $ 1,630,152 12.2 % $ 1,427,712 $ 1,568,032 9.8 %
Average adjusted stockholders' equity $ 1,396,063 $ 1,405,912 $ 1,423,599 $ 1,458,427 $ 1,480,676 $ 1,511,085 $ 1,535,567 $ 1,564,682 7.3 % $ 1,421,000 $ 1,523,003 7.2 %
Net income return on stockholders' equity 18.5 % 24.5 % 23.9 % 23.8 % 21.2 % 25.1 % 24.1 % 23.0 % % nm 22.7 % 23.4 % % nm
Net income return on adjusted stockholders' equity 18.8 % 24.7 % 23.9 % 23.7 % 21.4 % 25.8 % 25.1 % 23.9 % % nm 22.8 % 24.1 % % nm
Adjusted net operating income return on adjusted stockholders' equity 19.0 % 24.5 % 23.7 % 24.0 % 20.3 % 25.1 % 24.9 % 23.7 % % nm 22.8 % 23.5 % % nm
Capital Structure
Debt-to-capital (1) 20.7 % 21.1 % 20.6 % 20.4 % 19.7 % 19.1 % 18.9 % 18.5 % % nm 20.4 % 18.5 % % nm
Cash and invested assets to stockholders' equity 2.1 x 2.2 x 2.2 x 2.3 x 2.3 x 2.3 x 2.3 x 2.4 x x nm 2.3 x 2.4 x x nm
Cash and invested assets to adjusted stockholders' equity 2.2 x 2.2 x 2.2 x 2.3 x 2.4 x 2.4 x 2.4 x 2.5 x x nm 2.3 x 2.5 x x nm
Share count, end of period (2) 43,953,046 43,168,005 42,976,742 42,694,258 42,398,643 42,008,450 41,491,998 41,206,504 ) -3.5 % 42,694,258 41,206,504 ) -3.5 %
Adjusted stockholders' equity per share $ 32.14 $ 32.41 $ 33.69 $ 34.40 $ 35.20 $ 36.41 $ 37.15 $ 38.54 12.0 % $ 34.40 $ 38.54 12.0 %
Financial Strength Ratings - Primerica Life Insurance Co
Moody's A2 A2 A1 A1 A1 A1 A1 A1 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
Holding Company Senior Debt Ratings
Moody's Baa2 Baa2 Baa1 Baa1 Baa1 Baa1 Baa1 Baa1 nm nm nm nm nm nm
S&P A- A- A- A- A- A- A- A- nm nm nm nm nm nm
A.M. Best a- a- a- a- a- a- a- a- nm nm nm nm nm nm

All values are in US Dollars.

(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).
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5 of 16

Statements of Income PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 Change %<br><br><br>Change
Statement of Income
Revenues:
Direct premiums $ 656,087 $ 667,191 $ 670,222 $ 673,605 $ 677,286 $ 687,262 $ 692,258 $ 697,060 3.5 % $ 2,667,104 $ 2,753,866 3.3 %
Ceded premiums (394,249 ) (403,449 ) (391,175 ) (392,290 ) (389,795 ) (400,588 ) (388,982 ) (390,364 ) 0.5 % (1,581,164 ) (1,569,729 ) 0.7 %
Net premiums 261,838 263,741 279,047 281,314 287,491 286,675 303,276 306,696 9.0 % 1,085,940 1,184,138 9.0 %
Net investment income 19,017 20,030 20,622 21,760 24,111 24,868 22,675 22,418 3.0 % 81,430 94,073 15.5 %
Commissions and fees:
Sales-based (1) 64,461 64,307 64,181 67,041 66,997 71,438 69,034 75,418 12.5 % 259,991 282,887 8.8 %
Asset-based (2) 74,649 75,672 78,318 75,012 73,639 79,317 81,009 84,184 12.2 % 303,652 318,149 4.8 %
Account-based (3) 20,595 20,438 20,306 20,463 19,613 19,897 20,449 20,598 0.7 % 81,802 80,555 ) -1.5 %
Other commissions and fees 7,122 7,523 8,074 9,444 7,066 7,817 9,227 8,103 ) -14.2 % 32,163 32,213 0.2 %
Realized investment (losses) gains (1,656 ) 1,313 (126 ) (1,651 ) 2,847 1,067 285 766 146.4 % (2,121 ) 4,965 nm
Other, net 13,897 14,790 14,359 13,940 13,223 13,825 14,698 13,778 ) -1.2 % 56,987 55,525 ) -2.6 %
Total revenues 459,923 467,814 484,781 487,324 494,988 504,903 520,654 531,959 9.2 % 1,899,843 2,052,504 8.0 %
Benefits and expenses:
Benefits and claims 116,890 105,069 118,787 116,837 122,284 115,068 128,684 127,784 9.4 % 457,583 493,820 7.9 %
Amortization of DAC 60,165 53,847 59,534 66,184 64,628 58,762 63,883 67,279 1.7 % 239,730 254,552 6.2 %
Insurance commissions 5,877 6,417 6,584 5,612 5,619 5,829 6,980 6,624 18.0 % 24,490 25,051 2.3 %
Insurance expenses 41,109 43,451 41,925 41,671 43,402 44,569 44,854 45,991 10.4 % 168,156 178,817 6.3 %
Sales commissions:
Sales-based (1) 46,259 45,905 45,634 47,424 47,831 50,679 48,652 52,529 10.8 % 185,221 199,690 7.8 %
Asset-based (2) 32,484 33,350 34,813 33,297 32,343 35,665 35,875 37,772 13.4 % 133,943 141,655 5.8 %
Other sales commissions 3,777 3,700 4,141 4,602 3,626 3,755 4,535 3,937 ) -14.5 % 16,220 15,853 ) -2.3 %
Interest expense 7,173 7,229 7,216 7,192 7,180 7,201 7,209 7,222 0.4 % 28,809 28,811 nm
Other operating expenses 63,228 55,083 54,712 56,584 65,706 55,917 54,844 60,676 7.2 % 229,606 237,143 3.3 %
Total benefits and expenses 376,961 354,050 373,346 379,403 392,619 377,444 395,515 409,815 8.0 % 1,483,760 1,575,393 6.2 %
Income before income taxes 82,962 113,764 111,435 107,922 102,368 127,459 125,138 122,145 13.2 % 416,083 477,111 14.7 %
Income taxes 17,248 27,065 26,296 21,380 23,203 30,014 28,916 28,588 33.7 % 91,990 110,720 20.4 %
Net income $ 65,714 $ 86,699 $ 85,139 $ 86,541 $ 79,166 $ 97,446 $ 96,223 $ 93,557 8.1 % $ 324,093 $ 366,391 13.1 %
Income Before Income Taxes by Segment
Term Life $ 59,621 $ 75,827 $ 74,338 $ 72,117 $ 70,339 $ 83,999 $ 83,761 $ 81,995 13.7 % $ 281,903 $ 320,093 13.5 %
Investment & Savings Products 39,985 43,228 45,052 45,647 42,684 47,343 48,794 52,991 16.1 % 173,911 191,812 10.3 %
Corporate & Other Distributed Products (16,644 ) (5,291 ) (7,954 ) (9,842 ) (10,654 ) (3,882 ) (7,416 ) (12,841 ) ) -30.5 % (39,731 ) (34,794 ) 12.4 %
Income before income taxes $ 82,962 $ 113,764 $ 111,435 $ 107,922 $ 102,368 $ 127,459 $ 125,138 $ 122,145 13.2 % $ 416,083 $ 477,111 14.7 %

All values are in US Dollars.

(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.
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(3) Account-based - revenues relating to the fee generating client accounts we administer.
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6 of 16

Reconciliation of Statement of Income GAAP to Non-GAAP Financial Measures PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 Change %<br><br><br>Change
Reconciliation from Term Life Direct Premiums to Term Life Adjusted Direct Premiums
Term Life direct premiums $ 649,366 $ 660,505 $ 663,183 $ 667,776 $ 670,755 $ 681,004 $ 685,539 $ 691,546 3.6 % $ 2,640,830 $ 2,728,844 3.3 %
Less: Premiums ceded to IPO Coinsurers 294,301 290,956 284,742 281,265 276,150 272,596 267,856 264,786 ) -5.9 % 1,151,264 1,081,388 ) -6.1 %
Term Life adjusted direct premiums $ 355,065 $ 369,548 $ 378,441 $ 386,511 $ 394,605 $ 408,408 $ 417,683 $ 426,761 10.4 % $ 1,489,566 $ 1,647,456 10.6 %
Reconciliation from Term Life Ceded Premiums to Term Life Other Ceded Premiums
Term Life ceded premiums $ (392,561 ) $ (401,686 ) $ (389,332 ) $ (390,173 ) $ (388,100 ) $ (398,927 ) $ (387,120 ) $ (388,237 ) 0.5 % $ (1,573,751 ) $ (1,562,383 ) 0.7 %
Less: Premiums ceded to IPO Coinsurers (294,301 ) (290,956 ) (284,742 ) (281,265 ) (276,150 ) (272,596 ) (267,856 ) (264,786 ) 5.9 % (1,151,264 ) (1,081,388 ) 6.1 %
Term Life other ceded premiums $ (98,260 ) $ (110,730 ) $ (104,590 ) $ (108,908 ) $ (111,950 ) $ (126,330 ) $ (119,264 ) $ (123,451 ) ) -13.4 % $ (422,487 ) $ (480,995 ) ) -13.8 %
Reconciliation from Net Investment Income to Adjusted Net Investment Income
Net Investment Income $ 19,017 $ 20,030 $ 20,622 $ 21,760 $ 24,111 $ 24,868 $ 22,675 $ 22,418 3.0 % $ 81,430 $ 94,073 15.5 %
Less: MTM investment adjustments (1,288 ) (375 ) (297 ) 280 2,147 2,447 534 254 nm nm (1,680 ) 5,382 nm nm
Adjusted net investment income $ 20,305 $ 20,405 $ 20,920 $ 21,480 $ 21,964 $ 22,421 $ 22,141 $ 22,165 3.2 % $ 83,110 $ 88,691 6.7 %
Reconciliation from Total Revenues to Adjusted Operating Revenues
Total revenues $ 459,923 $ 467,814 $ 484,781 $ 487,324 $ 494,988 $ 504,903 $ 520,654 $ 531,959 9.2 % $ 1,899,843 $ 2,052,504 8.0 %
Less: Realized investment gains/(losses) (1,656 ) 1,313 (126 ) (1,651 ) 2,847 1,067 285 766 nm nm (2,121 ) 4,965 nm nm
Less: MTM investment adjustments (1,288 ) (375 ) (297 ) 280 2,147 2,447 534 254 nm nm (1,680 ) 5,382 nm nm
Adjusted operating revenues $ 462,866 $ 466,877 $ 485,205 $ 488,695 $ 489,993 $ 501,389 $ 519,834 $ 530,940 8.6 % $ 1,903,644 $ 2,042,157 7.3 %
Reconciliation from Income Before Income Taxes to Adjusted Operating Income Before Income Taxes
Income before income taxes $ 82,962 $ 113,764 $ 111,435 $ 107,922 $ 102,368 $ 127,459 $ 125,138 $ 122,145 13.2 % $ 416,083 $ 477,111 14.7 %
Less: Realized investment gains/(losses) (1,656 ) 1,313 (126 ) (1,651 ) 2,847 1,067 285 766 nm nm (2,121 ) 4,965 nm nm
Less: MTM investment adjustments (1,288 ) (375 ) (297 ) 280 2,147 2,447 534 254 nm nm (1,680 ) 5,382 nm nm
Adjusted operating income before income taxes $ 85,906 $ 112,827 $ 111,859 $ 109,293 $ 97,374 $ 123,945 $ 124,319 $ 121,125 10.8 % $ 419,884 $ 466,764 11.2 %
Reconciliation from Net Income to Adjusted Net Operating Income
Net income $ 65,714 $ 86,699 $ 85,139 $ 86,541 $ 79,166 $ 97,446 $ 96,223 $ 93,557 8.1 % $ 324,093 $ 366,391 13.1 %
Less: Income before income taxes reconciling items (2,944 ) 937 (424 ) (1,371 ) 4,994 3,514 819 1,019 nm nm (3,801 ) 10,347 nm nm
Less: Tax impact of income before income taxes reconciling items 675 (223 ) 104 272 (1,132 ) (828 ) (189 ) (239 ) nm nm 827 (2,387 ) nm nm
Less: Transition impact of tax reform (1) 1,768 — 970 — — — — — nm nm 2,737 — nm nm
Adjusted net operating income $ 66,215 $ 85,984 $ 84,489 $ 87,641 $ 75,303 $ 94,759 $ 95,592 $ 92,776 5.9 % $ 324,330 $ 358,431 10.5 %

All values are in US Dollars.

(1) Represents the transition effect of revaluing deferred tax assets and liabilities to a 21% tax rate and the inclusion of tax on mandatory deemed repatriated foreign earnings due to the enactment of Tax Reform, which was signed into law on December 22, 2017.  Amounts recognized in 2018 represent adjustments to the provisional amounts estimated as of December 31, 2017.

7 of 16

Segment Operating Results PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 Change %<br><br><br>Change
Term Life Insurance
Revenues:
Direct Premiums $ 649,366 $ 660,505 $ 663,183 $ 667,776 $ 670,755 $ 681,004 $ 685,539 $ 691,546 3.6 % $ 2,640,830 $ 2,728,844 3.3 %
Premiums ceded to IPO coinsurers (1) (294,301 ) (290,956 ) (284,742 ) (281,265 ) (276,150 ) (272,596 ) (267,856 ) (264,786 ) 5.9 % (1,151,264 ) (1,081,388 ) 6.1 %
Adjusted direct premiums (2) 355,065 369,548 378,441 386,511 394,605 408,408 417,683 426,761 10.4 % 1,489,566 1,647,456 10.6 %
Other ceded premiums (3) (98,260 ) (110,730 ) (104,590 ) (108,908 ) (111,950 ) (126,330 ) (119,264 ) (123,451 ) ) -13.4 % (422,487 ) (480,995 ) ) -13.8 %
Net premiums 256,805 258,818 273,851 277,603 282,655 282,077 298,419 303,310 9.3 % 1,067,078 1,166,461 9.3 %
Allocated net investment income 3,089 3,246 3,506 3,907 4,444 4,736 5,123 5,619 43.8 % 13,747 19,922 44.9 %
Other, net 10,415 10,913 10,615 10,431 9,744 10,055 10,985 10,063 ) -3.5 % 42,374 40,848 ) -3.6 %
Revenues 270,309 272,978 287,972 291,941 296,843 296,869 314,527 318,992 9.3 % 1,123,199 1,227,231 9.3 %
Benefits and expenses:
Benefits and claims 112,831 101,755 113,988 113,201 118,443 111,480 122,751 122,657 8.4 % 441,775 475,330 7.6 %
Amortization of DAC 56,673 51,257 56,904 63,779 64,066 56,179 61,548 66,918 4.9 % 228,613 248,711 8.8 %
Insurance commissions 2,228 2,856 2,936 2,244 2,163 2,298 3,311 3,009 34.1 % 10,263 10,781 5.0 %
Insurance expenses 38,956 41,282 39,807 40,600 41,832 42,914 43,157 44,413 9.4 % 160,645 172,316 7.3 %
Benefits and expenses 210,688 197,150 213,635 219,824 226,504 212,870 230,766 236,997 7.8 % 841,297 907,138 7.8 %
Income before income taxes $ 59,621 $ 75,827 $ 74,338 $ 72,117 $ 70,339 $ 83,999 $ 83,761 $ 81,995 13.7 % $ 281,903 $ 320,093 13.5 %
Investment & Savings Products
Revenues:
Commissions and fees:
Sales-based $ 64,461 $ 64,307 $ 64,181 $ 67,041 $ 66,997 $ 71,438 $ 69,034 $ 75,418 12.5 % $ 259,991 $ 282,887 8.8 %
Asset-based 74,649 75,672 78,318 75,012 73,639 79,317 81,009 84,184 12.2 % 303,652 318,149 4.8 %
Account-based 20,595 20,438 20,306 20,463 19,613 19,897 20,449 20,598 0.7 % 81,802 80,555 ) -1.5 %
Other, net 2,336 2,424 2,464 2,408 2,423 2,434 2,661 2,500 3.8 % 9,631 10,017 4.0 %
Revenues 162,042 162,841 165,269 164,924 162,671 173,085 173,153 182,699 10.8 % 655,075 691,608 5.6 %
Benefits and expenses:
Amortization of DAC 3,442 2,080 2,349 1,896 477 2,101 2,044 (74 ) ) -103.9 % 9,766 4,549 ) -53.4 %
Insurance commissions 3,199 3,132 3,193 3,042 3,025 3,155 3,257 3,297 8.4 % 12,567 12,735 1.3 %
Sales commissions:
Sales-based 46,259 45,905 45,634 47,424 47,831 50,679 48,652 52,529 10.8 % 185,221 199,690 7.8 %
Asset-based 32,484 33,350 34,813 33,297 32,343 35,665 35,875 37,772 13.4 % 133,943 141,655 5.8 %
Other operating expenses 36,673 35,147 34,228 33,619 36,312 34,143 34,530 36,182 7.6 % 139,667 141,168 1.1 %
Benefits and expenses 122,057 119,613 120,217 119,277 119,988 125,742 124,359 129,707 8.7 % 481,164 499,796 3.9 %
Income before income taxes $ 39,985 $ 43,228 $ 45,052 $ 45,647 $ 42,684 $ 47,343 $ 48,794 $ 52,991 16.1 % $ 173,911 $ 191,812 10.3 %
Corporate & Other Distributed Products
Revenues:
Direct premiums $ 6,721 $ 6,686 $ 7,039 $ 5,829 $ 6,531 $ 6,258 $ 6,719 $ 5,514 ) -5.4 % $ 26,274 $ 25,022 ) -4.8 %
Ceded premiums (1,688 ) (1,763 ) (1,843 ) (2,118 ) (1,695 ) (1,661 ) (1,862 ) (2,128 ) ) -0.5 % (7,413 ) (7,345 ) 0.9 %
Net premiums 5,033 4,923 5,195 3,711 4,836 4,597 4,858 3,386 ) -8.8 % 18,862 17,677 ) -6.3 %
Allocated net investment income 17,216 17,159 17,413 17,574 17,521 17,684 17,018 16,545 ) -5.9 % 69,363 68,768 ) -0.9 %
Commissions and fees:
Prepaid Legal Services 3,669 3,607 4,431 4,586 3,737 4,159 4,776 3,905 ) -14.9 % 16,293 16,577 1.7 %
Auto and Homeowners Insurance 1,347 1,800 1,516 2,386 1,500 1,877 2,165 1,766 ) -26.0 % 7,048 7,308 3.7 %
Other sales commissions 2,106 2,116 2,127 2,472 1,829 1,781 2,286 2,432 ) -1.6 % 8,821 8,328 ) -5.6 %
Other, net 1,145 1,453 1,281 1,102 1,056 1,336 1,052 1,215 10.3 % 4,982 4,660 ) -6.5 %
Adjusted operating revenues 30,516 31,058 31,964 31,831 30,479 31,435 32,154 29,250 ) -8.1 % 125,369 123,318 ) -1.6 %
Benefits and expenses:
Benefits and claims 4,059 3,314 4,799 3,636 3,842 3,588 5,933 5,127 41.0 % 15,808 18,490 17.0 %
Amortization of DAC 50 510 282 509 85 482 291 434 ) -14.6 % 1,351 1,293 ) -4.3 %
Insurance commissions 450 428 455 326 431 376 411 318 ) -2.7 % 1,660 1,535 ) -7.5 %
Insurance expenses 2,153 2,169 2,118 1,071 1,570 1,656 1,697 1,578 47.3 % 7,511 6,501 ) -13.4 %
Sales commissions 3,777 3,700 4,141 4,602 3,626 3,755 4,535 3,937 ) -14.5 % 16,220 15,853 ) -2.3 %
Interest expense 7,173 7,229 7,216 7,192 7,180 7,201 7,209 7,222 0.4 % 28,809 28,811 nm
Other operating expenses 26,554 19,936 20,484 22,965 29,394 21,774 20,314 24,494 6.7 % 89,939 95,976 6.7 %
Benefits and expenses 44,216 37,287 39,495 40,301 46,127 38,831 40,390 43,110 7.0 % 161,299 168,459 4.4 %
Adjusted operating income before income taxes $ (13,700 ) $ (6,228 ) $ (7,531 ) $ (8,471 ) $ (15,648 ) $ (7,396 ) $ (8,236 ) $ (13,861 ) ) -63.6 % $ (35,930 ) $ (45,141 ) ) -25.6 %

All values are in US Dollars.

(1) Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.
(2) Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.
--- ---
(3) Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.
--- ---

8 of 16

Term Life Insurance - Financial Results and Analysis PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 Change %<br><br><br>Change
Term Life Insurance Income Before Income Taxes
Revenues:
Direct Premiums $ 649,366 $ 660,505 $ 663,183 $ 667,776 $ 670,755 $ 681,004 $ 685,539 $ 691,546 3.6 % $ 2,640,830 $ 2,728,844 3.3 %
Premiums ceded to IPO coinsurers (1) (294,301 ) (290,956 ) (284,742 ) (281,265 ) (276,150 ) (272,596 ) (267,856 ) (264,786 ) 5.9 % (1,151,264 ) (1,081,388 ) 6.1 %
Adjusted direct premiums (2) 355,065 369,548 378,441 386,511 394,605 408,408 417,683 426,761 10.4 % 1,489,566 1,647,456 10.6 %
Other ceded premiums (3) (98,260 ) (110,730 ) (104,590 ) (108,908 ) (111,950 ) (126,330 ) (119,264 ) (123,451 ) ) -13.4 % (422,487 ) (480,995 ) ) -13.8 %
Net premiums 256,805 258,818 273,851 277,603 282,655 282,077 298,419 303,310 9.3 % 1,067,078 1,166,461 9.3 %
Allocated net investment income 3,089 3,246 3,506 3,907 4,444 4,736 5,123 5,619 43.8 % 13,747 19,922 44.9 %
Other, net 10,415 10,913 10,615 10,431 9,744 10,055 10,985 10,063 ) -3.5 % 42,374 40,848 ) -3.6 %
Revenues 270,309 272,978 287,972 291,941 296,843 296,869 314,527 318,992 9.3 % 1,123,199 1,227,231 9.3 %
Benefits and expenses:
Benefits and claims 112,831 101,755 113,988 113,201 118,443 111,480 122,751 122,657 8.4 % 441,775 475,330 7.6 %
Amortization of DAC 56,673 51,257 56,904 63,779 64,066 56,179 61,548 66,918 4.9 % 228,613 248,711 8.8 %
Insurance commissions 2,228 2,856 2,936 2,244 2,163 2,298 3,311 3,009 34.1 % 10,263 10,781 5.0 %
Insurance expenses 38,956 41,282 39,807 40,600 41,832 42,914 43,157 44,413 9.4 % 160,645 172,316 7.3 %
Benefits and expenses 210,688 197,150 213,635 219,824 226,504 212,870 230,766 236,997 7.8 % 841,297 907,138 7.8 %
Income before income taxes $ 59,621 $ 75,827 $ 74,338 $ 72,117 $ 70,339 $ 83,999 $ 83,761 $ 81,995 13.7 % $ 281,903 $ 320,093 13.5 %
Total Term Life Insurance - Financial Analysis
Post-IPO direct premiums (4) $ 267,615 $ 280,209 $ 287,554 $ 294,006 $ 300,708 $ 312,436 $ 320,424 $ 327,939 11.5 % $ 1,129,385 $ 1,261,507 11.7 %
Pre-IPO direct premiums (5) 381,751 380,295 375,629 373,770 370,047 368,568 365,115 363,607 ) -2.7 % 1,511,445 1,467,337 ) -2.9 %
Total direct premiums $ 649,366 $ 660,505 $ 663,183 $ 667,776 $ 670,755 $ 681,004 $ 685,539 $ 691,546 3.6 % $ 2,640,830 $ 2,728,844 3.3 %
Premiums ceded to IPO coinsurers $ 294,301 $ 290,956 $ 284,742 $ 281,265 $ 276,150 $ 272,596 $ 267,856 $ 264,786 ) -5.9 % $ 1,151,264 $ 1,081,388 ) -6.1 %
% of Pre-IPO direct premiums 77.1 % 76.5 % 75.8 % 75.3 % 74.6 % 74.0 % 73.4 % 72.8 % nm nm 76.2 % 73.7 % nm nm
Benefits and claims, net (6) $ 211,091 $ 212,485 $ 218,577 $ 222,109 $ 230,392 $ 237,810 $ 242,016 $ 246,108 10.8 % $ 864,262 $ 956,326 10.7 %
% of adjusted direct premiums 59.5 % 57.5 % 57.8 % 57.5 % 58.4 % 58.2 % 57.9 % 57.7 % nm nm 58.0 % 58.0 % nm nm
DAC amortization & insurance commissions $ 58,901 $ 54,113 $ 59,839 $ 66,023 $ 66,229 $ 58,477 $ 64,858 $ 69,927 5.9 % $ 238,876 $ 259,492 8.6 %
% of adjusted direct premiums 16.6 % 14.6 % 15.8 % 17.1 % 16.8 % 14.3 % 15.5 % 16.4 % nm nm 16.0 % 15.8 % nm nm
Insurance expenses, net (7) $ 28,541 $ 30,369 $ 29,193 $ 30,169 $ 32,088 $ 32,858 $ 32,171 $ 34,351 13.9 % $ 118,272 $ 131,468 11.2 %
% of adjusted direct premiums 8.0 % 8.2 % 7.7 % 7.8 % 8.1 % 8.0 % 7.7 % 8.0 % nm nm 7.9 % 8.0 % nm nm
Total Term Life income before income taxes $ 59,621 $ 75,827 $ 74,338 $ 72,117 $ 70,339 $ 83,999 $ 83,761 $ 81,995 13.7 % $ 281,903 $ 320,093 13.5 %
Term Life operating margin (8) 16.8 % 20.5 % 19.6 % 18.7 % 17.8 % 20.6 % 20.1 % 19.2 % nm nm 18.9 % 19.4 % nm nm

All values are in US Dollars.

(1) Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.
(2) Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.
--- ---
(3) Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.
--- ---
(4) Post-IPO direct premiums - direct premiums not subject to the 2010 IPO coinsurance transactions.
--- ---
(5) Pre-IPO direct premiums - direct premiums subject to the 2010 IPO coinsurance transactions.
--- ---
(6) Benefits and claims, net - benefits & claims net of other ceded premiums which are largely YRT.
--- ---
(7) Insurance expenses, net - insurance expenses net of other, net revenues.
--- ---
(8) Term Life operating margin - Term Life operating income before income taxes as a percentage of adjusted direct premiums.
--- ---

9 of 16

Term Life Insurance - Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 /#<br>Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 /#<br>Change %<br><br><br>Change
Key Statistics
Life-insurance licensed sales force, beginning of period 126,121 127,182 130,156 130,658 130,736 129,821 129,550 130,871 0.2 % 126,121 130,736 3.7 %
11,730 13,544 11,715 11,052 10,065 10,919 12,682 11,073 0.2 % 48,041 44,739 ) -6.9 %
(10,669 ) (10,570 ) (11,213 ) (10,974 ) (10,980 ) (11,190 ) (11,361 ) (11,422 ) ) -4.1 % (43,426 ) (44,953 ) ) -3.5 %
Life-insurance licensed sales force, end of period 127,182 130,156 130,658 130,736 129,821 129,550 130,871 130,522 ) -0.2 % 130,736 130,522 ) -0.2 %
Estimated annualized issued term life premium (mills) (1):
$ 60.4 $ 71.1 $ 64.6 $ 62.4 $ 56.1 $ 68.2 $ 65.2 $ 64.0 2.5 % $ 258.5 $ 253.5 ) -1.9 %
16.9 18.7 18.4 19.1 18.4 20.8 20.1 20.5 7.6 % 73.0 79.7 9.2 %
Total estimated annualized issued term life premium $ 77.3 $ 89.8 $ 82.9 $ 81.4 $ 74.5 $ 89.0 $ 85.3 $ 84.5 3.7 % $ 331.5 $ 333.2 0.5 %
Issued term life policies 70,821 83,754 74,892 72,122 64,242 78,664 73,434 71,469 ) -0.9 % 301,589 287,809 ) -4.6 %
Estimated average annualized issued term life premium per policy (1)(2) $ 853 $ 849 $ 862 $ 865 $ 874 $ 867 $ 888 $ 895 3.5 % $ 857 $ 881 2.8 %
Term life face amount in-force, beginning of period (mills) $ 763,831 $ 765,732 $ 773,604 $ 781,276 $ 781,041 $ 785,552 $ 796,376 $ 801,494 2.6 % $ 763,831 $ 781,041 2.3 %
22,258 26,001 23,728 23,222 20,925 25,300 24,087 23,682 2.0 % 95,209 93,994 ) -1.3 %
(17,788 ) (16,341 ) (17,638 ) (18,525 ) (18,383 ) (16,512 ) (17,740 ) (18,884 ) ) -1.9 % (70,291 ) (71,519 ) ) -1.7 %
(2,570 ) (1,788 ) 1,582 (4,932 ) 1,969 2,036 (1,228 ) 1,970 139.9 % (7,708 ) 4,746 nm
Term life face amount in-force, end of period $ 765,732 $ 773,604 $ 781,276 $ 781,041 $ 785,552 $ 796,376 $ 801,494 $ 808,262 3.5 % $ 781,041 $ 808,262 3.5 %

All values are in US Dollars.

(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.

(2)     In whole dollars.

(3)     Issued term life face amount - includes face amount on issued term life policies, additional riders added to existing policies, and face increases under increasing benefit riders.

10 of 16

Investment and Savings Products - Financial Results and Financial Analysis PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 Change %<br><br><br>Change
Investment & Savings Products Income Before Income Taxes
Revenues:
Commissions and fees:
Sales-based $ 64,461 $ 64,307 $ 64,181 $ 67,041 $ 66,997 $ 71,438 $ 69,034 $ 75,418 12.5 % $ 259,991 $ 282,887 8.8 %
Asset-based 74,649 75,672 78,318 75,012 73,639 79,317 81,009 84,184 12.2 % 303,652 318,149 4.8 %
Account-based 20,595 20,438 20,306 20,463 19,613 19,897 20,449 20,598 0.7 % 81,802 80,555 ) -1.5 %
Other, net 2,336 2,424 2,464 2,408 2,423 2,434 2,661 2,500 3.8 % 9,631 10,017 4.0 %
Revenues 162,042 162,841 165,269 164,924 162,671 173,085 173,153 182,699 10.8 % 655,075 691,608 5.6 %
Benefits and expenses:
Amortization of DAC 3,442 2,080 2,349 1,896 477 2,101 2,044 (74 ) ) -103.9 % 9,766 4,549 ) -53.4 %
Insurance commissions 3,199 3,132 3,193 3,042 3,025 3,155 3,257 3,297 8.4 % 12,567 12,735 1.3 %
Sales commissions:
Sales-based 46,259 45,905 45,634 47,424 47,831 50,679 48,652 52,529 10.8 % 185,221 199,690 7.8 %
Asset-based 32,484 33,350 34,813 33,297 32,343 35,665 35,875 37,772 13.4 % 133,943 141,655 5.8 %
Other operating expenses 36,673 35,147 34,228 33,619 36,312 34,143 34,530 36,182 7.6 % 139,667 141,168 1.1 %
Benefits and expenses 122,057 119,613 120,217 119,277 119,988 125,742 124,359 129,707 8.7 % 481,164 499,796 3.9 %
Income before income taxes $ 39,985 $ 43,228 $ 45,052 $ 45,647 $ 42,684 $ 47,343 $ 48,794 $ 52,991 16.1 % $ 173,911 $ 191,812 10.3 %
Financial Analysis
Fees paid based on client asset values (1) $ 5,690 $ 5,833 $ 6,037 $ 5,962 $ 5,898 $ 5,705 $ 6,225 $ 6,169 3.5 % $ 23,522 $ 23,998 2.0 %
Fees paid based on fee-generating positions (2) 12,495 10,854 10,223 10,219 11,159 9,658 9,354 9,648 ) -5.6 % 43,792 39,820 ) -9.1 %
Other operating expenses 18,488 18,460 17,968 17,437 19,254 18,780 18,951 20,365 16.8 % 72,354 77,351 6.9 %
Total other operating expenses $ 36,673 $ 35,147 $ 34,228 $ 33,619 $ 36,312 $ 34,143 $ 34,530 $ 36,182 7.6 % $ 139,667 $ 141,168 1.1 %
Sales-based net revenue as % of revenue-generating sales (3)
U.S. 1.24 % 1.27 % 1.26 % 1.35 % 1.33 % 1.29 % 1.31 % 1.41 % nm nm 1.28 % 1.34 % nm nm
Canada 1.05 % 0.95 % 0.90 % 0.90 % 1.00 % 0.97 % 0.96 % 0.94 % nm nm 0.96 % 0.97 % nm nm
Total 1.20 % 1.22 % 1.21 % 1.29 % 1.28 % 1.25 % 1.27 % 1.35 % nm nm 1.23 % 1.29 % nm nm
Asset-based net revenue as % of average asset values (4)
U.S. 0.036 % 0.037 % 0.037 % 0.037 % 0.036 % 0.038 % 0.038 % 0.039 % nm nm 0.148 % 0.151 % nm nm
Canada 0.111 % 0.123 % 0.121 % 0.122 % 0.136 % 0.120 % 0.121 % 0.138 % nm nm 0.478 % 0.514 % nm nm
Total 0.048 % 0.051 % 0.050 % 0.051 % 0.052 % 0.051 % 0.051 % 0.054 % nm nm 0.200 % 0.208 % nm nm
Account-based net revenue per average fee generating position (5)(6) $ 2.90 $ 3.49 $ 3.70 $ 3.80 $ 3.20 $ 3.88 $ 4.18 $ 4.10 nm nm $ 13.87 $ 15.37 nm nm

All values are in US Dollars.

(1) Fees paid based on client asset values - administration fees on Canadian Segregated Funds and advisory fees on Managed Accounts that vary directly with client asset values.
(2) Fees paid based on fee-generating positions - recordkeeping fees that vary with the number of fee-generating positions.
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(3) Sales-based net revenue - commission and fee revenue less commissions paid to the sales force based on product sales activity.
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(4) Asset-based net revenue - commission and fee revenue less administration and advisory fees paid to third-party providers and commissions paid to the sales force earned based on product account values including amortization of deferred acquisition costs for segregated funds.
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(5) Account-based net revenue - fee revenue less recordkeeping fees paid to third-party providers based on fee-generating positions and certain direct general expenses.
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(6) In whole dollars.
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11 of 16

Investment and Savings Products - Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4 YOY YTD
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 /#<br>Change %<br><br><br>Change YTD<br><br><br>2018 YTD<br><br><br>2019 /#<br>Change %<br><br><br>Change
Key Statistics
Product sales (mills)
$ 792.4 $ 800.6 $ 763.3 $ 767.8 $ 710.2 $ 855.9 $ 829.7 $ 831.9 8.4 % $ 3,124.0 $ 3,227.8 3.3 %
276.2 199.2 181.7 182.6 244.1 199.7 184.9 199.0 9.0 % 839.7 827.6 ) -1.4 %
67.5 71.9 78.8 88.2 81.0 88.2 75.0 76.3 ) -13.4 % 306.5 320.4 4.5 %
376.1 432.2 504.5 476.8 465.8 514.2 512.8 583.7 22.4 % 1,789.6 2,076.6 16.0 %
Total sales-based revenue generating product sales 1,512.2 1,504.0 1,528.3 1,515.3 1,501.1 1,658.0 1,602.4 1,691.0 11.6 % 6,059.8 6,452.5 6.5 %
188.8 204.3 190.5 169.4 161.6 203.5 176.9 197.4 16.5 % 753.0 739.4 ) -1.8 %
82.0 50.6 43.7 50.9 94.3 76.0 76.4 94.6 85.7 % 227.3 341.2 50.2 %
Total product sales $ 1,783.0 $ 1,758.9 $ 1,762.4 $ 1,735.7 $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0 14.2 % $ 7,040.1 $ 7,533.2 7.0 %
$ 276.2 $ 199.2 $ 181.7 $ 182.6 $ 244.1 $ 199.7 $ 184.9 $ 199.0 9.0 % $ 839.7 $ 827.6 ) -1.4 %
82.0 50.6 43.7 50.9 94.3 76.0 76.4 94.6 85.7 % 227.3 341.2 50.2 %
Total Canada product sales 358.2 249.8 225.4 233.6 338.4 275.6 261.3 293.6 25.7 % 1,067.0 1,168.9 9.5 %
Total U.S. product sales 1,424.8 1,509.1 1,537.1 1,502.1 1,418.6 1,661.8 1,594.4 1,689.4 12.5 % 5,973.1 6,364.3 6.5 %
Total product sales $ 1,783.0 $ 1,758.9 $ 1,762.4 $ 1,735.7 $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0 14.2 % $ 7,040.1 $ 7,533.2 7.0 %
Client asset values, beginning of period (mills) $ 61,167 $ 60,821 $ 61,777 $ 64,234 $ 57,704 $ 63,602 $ 65,878 $ 66,222 3.1 % $ 61,167 $ 57,704 ) -5.7 %
1,783 1,759 1,762 1,736 1,757 1,937 1,856 1,983 14.2 % 7,040 7,533 7.0 %
(1,571 ) (1,498 ) (1,499 ) (1,376 ) (1,530 ) (1,633 ) (1,669 ) (1,596 ) ) -15.9 % (5,944 ) (6,428 ) ) -8.1 %
Net flows 212 261 264 360 227 305 186 387 7.7 % 1,096 1,105 nm
(283 ) (195 ) 174 (543 ) 201 225 (136 ) 217 140.0 % (847 ) 507 nm
(276 ) 891 2,019 (6,346 ) 5,470 1,746 294 3,710 nm (3,712 ) 11,221 nm
Client asset values, end of period $ 60,821 $ 61,777 $ 64,234 $ 57,704 $ 63,602 $ 65,878 $ 66,222 $ 70,537 22.2 % $ 57,704 $ 70,537 22.2 %
1.4 % 1.7 % 1.7 % 2.2 % 1.6 % 1.9 % 1.1 % 2.3 % % nm 1.8 % 1.9 % % nm
Average client asset values (mills)
$ 30,674 $ 30,348 $ 31,439 $ 30,156 $ 30,266 $ 31,744 $ 32,521 $ 33,658 11.6 % $ 30,654 $ 32,047 4.5 %
7,508 7,444 7,610 7,252 7,390 7,795 7,991 8,218 13.3 % 7,454 7,849 5.3 %
2,739 2,930 3,179 3,189 3,241 3,455 3,652 3,901 22.4 % 3,009 3,563 18.4 %
1,939 1,997 2,049 2,117 2,182 2,247 2,296 2,342 10.6 % 2,025 2,267 11.9 %
16,333 16,176 16,669 15,982 16,057 16,807 17,114 17,661 10.5 % 16,290 16,910 3.8 %
2,510 2,402 2,417 2,311 2,314 2,378 2,428 2,455 6.3 % 2,410 2,394 ) -0.7 %
Total $ 61,704 $ 61,297 $ 63,363 $ 61,006 $ 61,451 $ 64,426 $ 66,002 $ 68,236 11.9 % $ 61,842 $ 65,029 5.2 %
$ 7,508 $ 7,444 $ 7,610 $ 7,252 $ 7,390 $ 7,795 $ 7,991 $ 8,218 13.3 % $ 7,454 $ 7,849 5.3 %
2,510 2,402 2,417 2,311 2,314 2,378 2,428 2,455 6.3 % 2,410 2,394 ) -0.7 %
Total Canada average client assets 10,018 9,846 10,027 9,562 9,704 10,173 10,418 10,674 11.6 % 9,864 10,242 3.8 %
Total U.S. average client assets 51,685 51,451 53,336 51,444 51,747 54,253 55,583 57,563 11.9 % 51,979 54,787 5.4 %
Total average client assets $ 61,704 $ 61,297 $ 63,363 $ 61,006 $ 61,451 $ 64,426 $ 66,002 $ 68,236 11.9 % $ 61,842 $ 65,029 5.2 %
Average number of fee-generating positions (thous) (3)
2,130 2,086 2,066 2,042 1,998 1,996 2,007 2,020 ) -1.1 % 2,081 2,005 ) -3.6 %
665 660 657 652 641 641 646 650 ) -0.2 % 658 644 ) -2.1 %
Total 2,795 2,746 2,723 2,694 2,639 2,637 2,653 2,670 ) -0.9 % 2,739 2,650 ) -3.3 %

All values are in US Dollars.

(1) Asset value outflows - include (a) redemptions of assets, (b) sales charges on the inflow sales figures, and (c) the net flow of money market funds sold and redeemed on the company's recordkeeping platform.  The redemptions of assets must be estimated for approximately 4% of account values as these figures are not readily available.  Actual redemptions as a percentage of account values for similar known account values are used to estimate the unknown redemption values.
(2) Change in market value, net - market value fluctuations net of fees and expenses.
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(3) Fee generating positions - mutual fund positions for which we receive recordkeeping fees. An individual client account may include multiple mutual fund positions. We may also receive fees earned for custodial services that we provide to clients with retirement plan accounts that hold positions in these mutual funds.
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12 of 16

Investment Portfolio - Summary of Holdings PRIMERICA, INC.<br><br><br>Financial Supplement
As of or for the period ended December 31, 2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
% of Total Avg
Market Amortized Unrealized Market Amortized Book Avg
(Dollars in thousands) Value Cost G/(L) Value Cost Yield Rating
Investment Portfolio by Asset Class
Cash, Cash Equivalents, and Short Term $ 256,876 $ 256,876 $ - 9.5 % 9.8 %
Fixed Income:
Treasury 28,696 28,269 428 1.1 % 1.1 % 2.37 % AAA
Government 234,985 227,876 7,109 8.7 % 8.7 % 3.11 % AA-
Tax-Exempt Municipal 30,343 28,873 1,469 1.1 % 1.1 % 3.39 % AA
Corporate 1,399,999 1,343,200 56,800 51.9 % 51.4 % 3.71 % BBB+
Mortgage Backed 323,856 317,132 6,724 12.0 % 12.1 % 3.07 % AAA
Asset Backed 103,106 102,604 501 3.8 % 3.9 % 3.03 % AA+
Cmbs 132,005 128,913 3,092 4.9 % 4.9 % 3.15 % AA+
Private 141,374 135,689 5,685 5.2 % 5.2 % 4.70 % BBB
Redeemable Preferred 5,865 5,447 417 0.2 % 0.2 % 5.47 % BBB
Total Fixed Income 2,400,229 2,318,003 82,226 89.0 % 88.6 % 3.54 % A
Equities:
Perpetual Preferred 13,465 13,465 - 0.5 % 0.5 %
Common Stock 19,336 19,336 0 0.7 % 0.7 %
Mutual Fund 7,883 7,883 - 0.3 % 0.3 %
Other - - - 0.0 % 0.0 %
Total Equities 40,684 40,684 0 1.5 % 1.6 %
Total Invested Assets $ 2,697,789 $ 2,615,563 $ 82,226 100.0 % 100.0 %
Corporate Portfolio by Sector
Consumer Non Cyclical $ 189,986 $ 183,072 $ 6,914 13.6 % 13.6 %
Banking 187,836 182,886 4,951 13.4 % 13.6 %
Reits 134,986 129,166 5,820 9.6 % 9.6 %
Energy 129,338 123,752 5,586 9.2 % 9.2 %
Insurance 112,281 106,527 5,754 8.0 % 7.9 %
Technology 111,948 107,488 4,461 8.0 % 8.0 %
Consumer Cyclical 94,233 90,105 4,128 6.7 % 6.7 %
Capital Goods 93,820 91,083 2,737 6.7 % 6.8 %
Communications 77,404 73,511 3,893 5.5 % 5.5 %
Transportation 68,522 66,408 2,115 4.9 % 4.9 %
Electric 65,907 62,307 3,600 4.7 % 4.6 %
Basic Industry 56,283 53,535 2,749 4.0 % 4.0 %
Brokerage 34,490 32,174 2,316 2.5 % 2.4 %
Finance Companies 16,675 15,640 1,036 1.2 % 1.2 %
Industrial Other 10,876 10,505 371 0.8 % 0.8 %
Natural Gas 7,710 7,487 223 0.6 % 0.6 %
Financial Other 3,550 3,451 99 0.3 % 0.3 %
Owned No Guarantee 3,106 3,106 - 0.2 % 0.2 %
Utility Other 1,047 998 49 0.1 % 0.1 %
Total Corporate portfolio $ 1,399,999 $ 1,343,200 $ 56,800 100.0 % 100.0 %
Fixed-Maturity Securities - Effective Maturity
Effective maturity
< 1 Yr. $ 299,815 $ 298,280 $ 1,535 12.5 % 12.9 % 2.98 %
1-2 Yrs. 288,105 283,979 4,126 12.0 % 12.3 % 3.37 %
2-5 Yrs. 1,009,071 973,014 36,058 42.0 % 42.0 % 3.63 %
5-10 Yrs. 665,998 633,864 32,134 27.7 % 27.3 % 3.72 %
> 10 Yrs. 137,239 128,865 8,373 5.7 % 5.6 % 3.76 %
Total Fixed Income $ 2,400,229 $ 2,318,003 $ 82,226 100.0 % 100.0 % 3.54 %
Duration
Fixed Income portfolio duration 3.6 years

Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

13 of 16

Investment Portfolio - Quality Ratings As of December 31, 2019 PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in thousands)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Investment Portfolio Quality Ratings (1)
Amortized  Cost % of Total
Total Fixed Income portfolio:
Rating
AAA $ 555,640 24.0 %
AA 271,936 11.7 %
A 543,351 23.4 %
BBB 885,497 38.2 %
Below Investment Grade 59,190 2.6 %
NA 2,389 0.1 %
Total Fixed Income $ 2,318,003 100.0 %
Amortized  Cost % of Total Amortized  Cost % of Total
Corporate asset class: Private asset class:
Rating Rating
AAA $ 14,492 1.1 % AAA $ - —
AA 96,563 7.2 % AA 888 0.7 %
A 430,072 32.0 % A 11,979 8.8 %
BBB 744,729 55.4 % BBB 121,273 89.4 %
Below Investment Grade 56,395 4.2 % Below Investment Grade 1,549 1.1 %
NA 948 0.1 % NA - —
Total Corporate $ 1,343,200 100.0 % Total Private $ 135,689 100.0 %
CMBS asset class: Mortgage-Backed asset class:
Rating Rating
AAA $ 106,629 82.7 % AAA $ 290,843 91.7 %
AA - — AA 20,380 6.4 %
A 22,005 17.1 % A 5,564 1.8 %
BBB - — BBB 224 0.1 %
Below Investment Grade 279 0.2 % Below Investment Grade 52 0.0 %
NA - — NA 68 0.0 %
Total CMBS $ 128,913 100.0 % Total Mortgage-Backed $ 317,132 100.0 %
Asset-Backed asset class: Treasury & Government asset classes:
Rating Rating
AAA $ 71,277 69.5 % AAA $ 68,559 26.8 %
AA 5,087 5.0 % AA 129,431 50.5 %
A 23,982 23.4 % A 47,791 18.7 %
BBB 768 0.7 % BBB 9,566 3.7 %
Below Investment Grade 118 0.1 % Below Investment Grade 797 0.3 %
NA 1,372 1.3 % NA 0 0.0 %
Total Asset-Backed $ 102,604 100.0 % Total Treasury & Government $ 256,144 100.0 %
NAIC Designations
1 $ 1,034,342 56.0 %
2 755,734 40.9 %
3 48,202 2.6 %
4 7,530 0.4 %
5 497 0.0 %
6 0 0.0 % `
U.S. Insurer Fixed Income (2) 1,846,306 100.0 %
Other (3) 512,381
Cash and cash equivalents 256,876
Total Invested Assets $ 2,615,563
(1) Ratings method for split ratings: If by 2 NRSROs, use lower of the two; if by 3 or more NRSROs, use second lowest.
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(2) NAIC ratings for our U.S. insurance companies' fixed income portfolios.
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(3) Other consists of assets held by our non-life companies, Canadian insurance company, and unrated equities.
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Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

14 of 16

Investment Portfolio - Supplemental Data and Trends PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q4
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Change %<br><br><br>Change
Net Investment Income by Source
Fixed-maturity securities (available-for-sale) $ 19,289 $ 19,743 $ 20,142 $ 20,183 $ 20,333 $ 20,345 $ 20,380 $ 20,772 2.9%
Fixed-maturity securities (held-to-maturity) 8,373 9,052 9,592 10,467 10,674 11,769 12,769 13,113 25.3%
Equity Securities 513 466 482 495 487 446 448 464 ) -6.2%
Deposit asset underlying 10% reinsurance treaty 1,181 1,270 1,392 1,480 1,755 2,141 2,105 2,046 38.2%
Deposit asset - Mark to Market (1,288 ) (375 ) (297 ) 280 2,147 2,447 534 254 ) -9.3%
Policy loans and other invested assets 411 390 391 478 467 299 234 215 ) -55.0%
Cash & cash equivalents 586 641 664 1,030 1,056 1,414 1,191 950 ) -7.8%
Total investment income 29,065 31,187 32,366 34,413 36,919 38,862 37,661 37,814 9.9%
Investment expenses 1,675 2,105 2,152 2,186 2,134 2,225 2,217 2,283 4.5%
Interest Expense on Surplus Note 8,373 9,052 9,592 10,467 10,674 11,769 12,769 13,113 25.3%
Net investment income $ 19,017 $ 20,030 $ 20,622 $ 21,760 $ 24,111 $ 24,868 $ 22,675 $ 22,418 3.0%
Fixed income book yield, end of period 3.92 % 3.91 % 3.88 % 3.89 % 3.85 % 3.74 % 3.65 % 3.54 %
New money yield 2.43 % 3.16 % 3.34 % 2.81 % 3.56 % 3.10 % 2.73 % 2.73 %
YOY Q4
Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 % Pt<br>Change
Fixed Income Portfolio Quality Ratings
Rating
AAA 19.8 % 20.9 % 22.0 % 21.2 % 21.4 % 20.9 % 23.0 % 24.0 % %
AA 8.6 % 9.8 % 10.6 % 10.4 % 10.9 % 11.3 % 11.0 % 11.7 % %
A 23.4 % 23.0 % 22.2 % 22.4 % 22.9 % 22.9 % 22.1 % 23.4 % %
BBB 44.6 % 43.0 % 42.2 % 42.9 % 41.8 % 41.8 % 41.0 % 38.2 % %
Below Investment Grade 3.4 % 3.1 % 2.7 % 2.8 % 2.9 % 3.0 % 2.8 % 2.6 % %
NA 0.2 % 0.2 % 0.2 % 0.2 % 0.1 % 0.1 % 0.1 % 0.1 % %
Total Fixed Income 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Average rating by amortized cost A A A A A A A A

All values are in US Dollars.

As of December 31, 2019 As of December 31, 2019 As of December 31, 2019
Market<br><br><br>Value Amortized<br><br><br>Cost Credit<br><br><br>Rating Market<br><br><br>Value Amortized<br><br><br>Cost Market<br><br><br>Value Amortized<br><br><br>Cost
Top 25 Exposures Foreign Exposure (1) Government Investments (1)
1 Canada $ 23,938 $ 23,717 AAA Canada $ 62,979 $ 60,033 AAA $ 3,284 $ 3,251
2 Province of Quebec Canada 13,811 12,764 AA- United Kingdom 49,875 48,390 AA 12,884 12,585
3 Enbridge Inc 11,553 11,211 A+ Australia 39,829 37,989 A 6,103 5,820
4 Cigna Corp 11,224 10,844 A- France 19,516 19,031 BBB 8,819 8,126
5 Province of Ontario Canada 10,888 10,488 A+ Switzerland 18,847 18,556 Below Investment Grade 816 797
6 Province of Alberta Canada 10,743 10,375 A+ Germany 16,841 16,604 NA — —
7 Province of British Columbia Canada 10,693 10,494 AAA Bermuda 16,092 15,660 Total $ 31,906 $ 30,579
8 Wells Fargo & Co 10,320 9,997 A- Netherlands 14,153 13,087
9 Bank of America Corp 10,190 9,916 A- Ireland 13,116 12,549
10 City of Houston TX 9,940 10,088 AA- Cayman Islands 10,841 10,740 Non-Government Investments (1)
11 Province of New Brunswick Canada 9,798 9,506 A+ Japan 7,301 6,949
12 Province of Manitoba Canada 9,346 9,066 A+ Israel 5,559 5,020 AAA $ 4,813 $ 4,784
13 City of Toronto Canada 9,134 8,896 AA Korea Republic Of 5,135 5,105 AA 33,773 33,375
14 Honda Motor Co Ltd 8,887 8,606 A Norway 5,036 5,053 A 87,421 85,041
15 Municipal Finance Authority of British Columbia 8,844 8,717 AAA Mexico 4,564 4,258 BBB 163,248 156,074
16 Williams Cos Inc/The 8,664 8,486 BBB Emerging Markets  (2) 10,697 10,360 Below Investment Grade 7,818 6,983
17 AbbVie Inc 8,612 8,503 A- All Other 28,597 27,452 NA — —
18 Truist Financial Corp 8,505 8,196 A- Total $ 328,980 $ 316,835 Total $ 297,074 $ 286,256
19 Morgan Stanley 7,859 7,516 A+
20 American Airlines Group Inc 7,680 7,415 AA-
21 General Mills Inc 7,626 7,334 BBB
22 PNC Financial Services Group 7,585 7,430 A-
23 Comcast Corp 7,576 7,276 A-
24 Gilead Sciences Inc 7,535 7,415 A
25 Goldman Sachs Group Inc/The 7,517 7,323 BBB+
Total $ 248,468 $ 241,578
% of total fixed income portfolio 9.2 % 9.2 %
(1) US$ denominated investments in issuers outside of the United States based on country of risk.
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(2) Emerging markets is as defined by MSCI, Inc. which include Chile, India, Peru, Poland and South Africa.
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Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

15 of 16

Five-Year Historical Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in millions) 2015 2016 2017 2018 2019 Q1<br><br><br>2018 Q2<br><br><br>2018 Q3<br><br><br>2018 Q4<br><br><br>2018 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Recruits 228,115 262,732 303,867 290,886 282,207 76,230 76,520 76,146 61,990 63,223 86,173 72,345 60,466
Life-insurance licensed sales force, beginning of period 98,358 106,710 116,827 126,121 130,736 126,121 127,182 130,156 130,658 130,736 129,821 129,550 130,871
New life-licensed representatives 39,632 44,724 48,535 48,041 44,739 11,730 13,544 11,715 11,052 10,065 10,919 12,682 11,073
Non-renewal and terminated representatives (31,280 ) (34,607 ) (39,241 ) (43,426 ) (44,953 ) (10,669 ) (10,570 ) (11,213 ) (10,974 ) (10,980 ) (11,190 ) (11,361 ) (11,422 )
Life-insurance licensed sales force, end of period 106,710 116,827 126,121 130,736 130,522 127,182 130,156 130,658 130,736 129,821 129,550 130,871 130,522
Issued term life policies 260,059 298,244 312,799 301,589 287,809 70,821 83,754 74,892 72,122 64,242 78,664 73,434 71,469
Issued term life face amount $ 79,111 $ 89,869 $ 95,635 $ 95,209 $ 93,994 $ 22,258 $ 26,001 $ 23,728 $ 23,222 $ 20,925 $ 25,300 $ 24,087 $ 23,682
Term life face amount in force, beginning of period $ 681,927 $ 693,194 $ 728,385 $ 763,831 $ 781,041 $ 763,831 $ 765,732 $ 773,604 $ 781,276 $ 781,041 $ 785,552 $ 796,376 $ 801,494
Issued term life face amount 79,111 89,869 95,635 95,209 93,994 22,258 26,001 23,728 23,222 20,925 25,300 24,087 23,682
Terminated term life face amount (53,580 ) (57,238 ) (65,958 ) (70,291 ) (71,519 ) (17,788 ) (16,341 ) (17,638 ) (18,525 ) (18,383 ) (16,512 ) (17,740 ) (18,884 )
Foreign currency impact, net (14,263 ) 2,560 5,769 (7,708 ) 4,746 (2,570 ) (1,788 ) 1,582 (4,932 ) 1,969 2,036 (1,228 ) 1,970
Term life face amount in force, end of period $ 693,194 $ 728,385 $ 763,831 $ 781,041 $ 808,262 $ 765,732 $ 773,604 $ 781,276 $ 781,041 $ 785,552 $ 796,376 $ 801,494 $ 808,262
Estimated annualized issued term life premium
Premium from new policies $ 212.4 $ 245.2 $ 263.1 $ 258.5 $ 253.5 $ 60.4 $ 71.1 $ 64.6 $ 62.4 $ 56.1 $ 68.2 $ 65.2 $ 64.0
Additions and increases in premium 54.9 60.4 65.5 73.0 79.7 16.9 18.7 18.4 19.1 18.4 20.8 20.1 20.5
Total estimated annualized issued term life premium $ 267.3 $ 305.7 $ 328.6 $ 331.5 $ 333.2 $ 77.3 $ 89.8 $ 82.9 $ 81.4 $ 74.5 $ 89.0 $ 85.3 $ 84.5
Investment & Savings product sales $ 5,856.8 $ 5,594.3 $ 6,192.2 $ 7,040.1 $ 7,533.2 $ 1,783.0 $ 1,758.9 $ 1,762.4 $ 1,735.7 $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0
Investment & Savings average client asset values $ 48,477 $ 49,427 $ 56,791 $ 61,842 $ 65,029 $ 61,704 $ 61,297 $ 63,363 $ 61,006 $ 61,451 $ 64,426 $ 66,002 $ 68,236

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