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Section 1: 8-K (PRIMERICA, INC. 8-K)


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 8, 2017
 
PRIMERICA, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
001-34680
 
27-1204330
(State or Other Jurisdiction of
Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification Number)
 
 
1 Primerica Parkway
Duluth, Georgia 30099
(Address of Principal Executive Offices)
 
 
(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))
 
 

Item 2.02       Results of Operations and Financial Condition.
On February 8, 2017, Primerica, Inc. (the “Company”) announced its results of operations for the quarter ended December 31, 2016. 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, operating revenues, operating income before income taxes, net operating income, adjusted stockholders’ equity and diluted 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 with this block of business. Operating revenues, operating income before income taxes, net operating income and diluted operating earnings per share exclude the impact of realized investment gains and losses for all periods presented. We exclude realized investment gains and losses in measuring 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 that are not directly associated with the Company’s insurance operations.  Adjusted stockholders’ equity excludes the impact of net unrealized investment gains and losses recorded in accumulated other comprehensive income (loss) for all periods presented. 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.
 
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.
 
2

 
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 7.01       Regulation FD Disclosure.
 
On February 8, 2017, the Company posted to the “Investor Relations” section of its website certain supplemental financial information relating to the quarter ended December 31, 2016.  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 8, 2017 – Primerica Reports Fourth Quarter 2016 Results
 
99.2                 Primerica, Inc. Supplemental Financial Information – Fourth Quarter 2016
 

3

 
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 8, 2017
PRIMERICA, INC.
 
 
 
 
 
 /s/ Alison S. Rand
 
 
Alison S. Rand
 
Executive Vice President and Chief Financial Officer
 
4

 
EXHIBIT INDEX


Exhibit No.
Description
 
 
99.1
Press Release dated February 8, 2017 – Primerica Reports Fourth Quarter 2016 Results
   
99.2
Primerica, Inc. Supplemental Financial Information – Fourth Quarter 2016

 
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(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1
 
 
 
PRIMERICA REPORTS FOURTH QUARTER 2016 RESULTS

14% growth in life insurance policies issued

9% increase in life insurance licensed representatives to 116,827

11% increase in ending client asset values to a record of $52.3 billion

25% growth in net earnings per diluted share (EPS) to $1.21 and
18% growth in operating EPS to $1.19

18.6% net income return on stockholders’ equity (ROE) and
19.2% net operating income return on adjusted stockholders’ equity (ROAE)

Duluth, GA, February 8, 2017 – Primerica, Inc. (NYSE: PRI) today announced financial results for the quarter ended December 31, 2016.  In the fourth quarter, total revenues increased 11% and operating revenues increased 10% to $393.9 million and $392.4 million, respectively.  Net income grew 19% to $56.9 million and net operating income grew 11%  to $55.9 million compared with the fourth quarter of 2015.  Earnings growth and share repurchases throughout 2016 drove a 25% increase in EPS and an 18% increase in operating EPS to $1.21 and $1.19, respectively, in the fourth quarter of 2016.  ROE expanded to 18.6% and operating ROAE expanded to 19.2% in the current period versus 16.7% and 18.2%, respectively, in the prior year period.

Glenn Williams, Chief Executive Officer, said, “During 2016, we continued to execute our strategy to drive growth and improve performance by expanding distribution, deploying mobile technology and repurchasing shares.  For the full year 2016 we achieved a 24% increase in EPS and a 240 basis points increase in ROE compared with 2015.  Our sales force leadership played a key role in achieving these results. Our life licensed sales force surpassed 116,000 representatives and their life insurance productivity remained at the top of the historical range throughout the year, driving the 15% year-over-year growth in life insurance policies issued.  In addition, our Investment and Savings Products (ISP) client asset values grew to a record $52 billion at the end of 2016.  We are optimistic about the growth opportunities ahead and our ability to build on our success by leveraging Primerica’s strengths and effectively deploying capital to deliver long-term value for all of our stakeholders.”
 
1


For the full year 2016, total revenues and operating revenues increased 8%  to $1.5 billion. Net income grew 16% to $219.4 million and net operating income grew 13% to $216.8 million versus 2015.  Earnings growth and share repurchases throughout the year drove EPS and operating EPS increases of 24% and 22% to $4.59 and $4.53, respectively.  ROE expanded to 18.3% and operating ROAE expanded to 19.0% in 2016 versus 15.9% and 16.9%, respectively, in the prior year.  Results reflect strong Term Life performance including a 13% increase in net premiums and Term Life margin expansion. ISP client asset values ended the year at an all-time high while sales declined due to lower variable annuity sales, consistent with industry trends. Insurance and other operating expenses grew 8% year-over-year reflecting higher growth- and employee-related costs as well as additional spend on mobile technology initiatives and preparation for the Department of Labor’s (DOL) Fiduciary Rule.  During the year, $150 million of shares were repurchased enabling the retirement of approximately 6% of common stock outstanding as of December 31, 2015.

In the fourth quarter, momentum continued in the Term Life business with 14%  growth in policies issued and 13% growth in net premiums year-over-year.  Term Life results reflect typically lower fourth quarter persistency experience that was also weaker than historical levels in the period.  Investment and Savings Products performance improved due to higher average client asset values and stable product sales levels year-over-year.  Results for the ISP segment also include the full-year impact of a change to the annual account-based fee structure implemented in the fourth quarter of 2016.  Net investment income was impacted by a negative mark-to-market on the deposit asset backing an IPO-related reinsurance agreement due to increasing interest rates during the fourth quarter.

Fourth Quarter Distribution & Segment Results
 
Distribution Results
     
Q4 2016
     
Q4 2015
   
%
Change
   
Q3 2016
   
%
Change
Life Licensed Sales Force (1)
   
116,827
     
106,710
     
9
%
   
115,345
     
1
%
Recruits
   
60,326
     
48,624
     
24
%
   
73,706
     
(18
)%
New Life-Licensed Representatives
   
11,148
     
10,547
     
6
%
   
11,739
     
(5
)%
Life Insurance Policies Issued
   
79,110
     
69,627
     
14
%
   
75,374
     
5
%
Life Productivity (2) 
   
0.23
     
0.22
     
*
     
0.22
     
*
 
ISP Product Sales ($ billions) 
 
$
1.41
   
$
1.41
     
*
   
$
1.34
     
5
%
Average Client Asset Values ($ billions)   
$
51.45
   
$
47.54
     
8
%
 
$
50.68
     
2
%

(1)
End of period
(2)
Life productivity equals policies issued divided by the average number of life insurance licensed representatives per month
*    Not calculated or less than 1%
 
2

 
Segment Results
     
Q4 2016
     
Q4 2015
   
%
Change
   
Q3 2016
   
%
Change
   
($ in thousands)
Operating Revenues: (1)
                                   
Term Life Insurance
 
$
227,128
   
$
200,165
     
13
%
 
$
222,598
     
2
%
Investment and Savings Products
   
137,016
     
128,774
     
6
%
   
130,080
     
5
%
Corporate and Other Distributed Products
   
28,255
     
27,872
     
1
%
   
30,983
     
(9
)%
Total operating revenues (1)
 
$
392,399
   
$
356,811
     
10
%
 
$
383,661
     
2
%
                                         
Operating Income (loss) before income taxes:(1)
                                       
Term Life Insurance
 
$
51,127
   
$
45,926
     
11
%
 
$
58,137
     
(12
)%
Investment and Savings Products
   
40,840
     
38,481
     
6
%
   
35,760
     
14
%
Corporate and Other Distributed Products
   
(6,368
)
   
(8,653
)
   
(26
)%
   
(5,425
)
   
17
%
Total operating income before income taxes (1)
 
$
85,599
   
$
75,754
     
13
%
 
$
88,472
     
(3
)%

(1)
See the Non-GAAP Financial Measures section and the segment Operating Results Reconciliations at the end of this release for additional information.

Life Insurance Licensed Sales Force. Strong recruiting and licensing trends in recent quarters drove 9% year-over-year growth in the life insurance licensed sales force to 116,827 representatives at the end of the fourth quarter.  Recruiting of new representatives increased 24% from the year ago period and included approximately 4,000 recruits who entered the business as a result of a November initiative to honor the men and women of the military.  New life insurance licenses were 6% above the very strong licensing results in the prior year period.  On a sequential quarter basis, recruiting and new life insurance licenses decreased in the fourth quarter during the typically slower holiday season.

Term Life Insurance.  In the fourth quarter of 2016, term life insurance policies issued increased 14% year-over-year driven by the larger life insurance licensed sales force and productivity of 0.23 policies per life insurance licensed representative per month, which topped the high end of the historical productivity range.  Term Life revenues increased 13% to $227.1 million compared with the year ago period.  This was driven by a 13% increase in net premiums from higher levels of issued policies in recent years and the growth in the in force business not subject to IPO-related coinsurance agreements.  Income before income taxes grew 11% to $51.1 million year-over-year.  Persistency, which is typically weaker in the fourth quarter than other quarters, was also lower than historical experience, while aggregate claims experience was generally in line with historical trends.  As historically done in the fourth quarter, new business assumptions were locked-in for policies issued in 2016, modestly decreasing earnings. The net impact of persistency, claims and the finalizing of assumptions was approximately $3 million unfavorable and is reflected as higher deferred acquisition costs (DAC) amortization and slightly lower benefits and expenses during the period.  Insurance expenses grew year-over-year primarily due to $2 million of additional technology spending to enhance our sales force’s mobile technology capabilities, largely offset by growth in other revenues.

3

Investment and Savings Products (ISP).  In the fourth quarter, ISP revenues increased 6% to $137.0 million and income before income taxes grew 6% to $40.8 million compared with the year ago period.  Results reflect consistent product sales year-over year as U.S. retail mutual fund sales increased 8% and fixed indexed annuities sales increased 25% while variable annuity sales declined 18%, consistent with industry trends.  Net flows were positive $304 million in the fourth quarter and client asset values increased 11% to a record $52.3 billion at the end of the year.  In the fourth quarter we increased our account-based fee structure on U.S. qualified accounts for the first time in nearly 15 years.  The $4.1 million full-year impact of this change was recognized in the fourth quarter, although going forward it will be accrued quarterly.  DAC amortization was lower than generally seen in other quarters primarily due to lower assumptions for future redemptions based on emerging experience.  ISP expenses increased from the year ago period largely due to $1.6 million of costs in the fourth quarter related to preparation for the DOL’s Fiduciary Rule.

Corporate and Other Distributed Products (C&O)C&O operating revenues were $28.3 million and operating losses before income taxes were $6.4 million in the fourth quarter of 2016.  Net investment income continues to be impacted low investment portfolio and market yields.  Additionally, in the fourth quarter there was a $0.2 million negative return on the deposit asset backing an IPO-related reinsurance agreement reflecting a $1.3 million mark-to-market value reduction.  Net unrealized gains decreased to $65.8 million at quarter-end from $110.4 million at September 30, 2016 reflecting increased interest rates during the quarter.

Taxes
The effective income tax rate for the fourth quarter of 2016 was 34.7%, up from 33.8% in the prior year period. The increase was largely due to higher non-deductible expense items and a smaller annual release of exposure reserves relative to the prior year period.

Capital
Primerica repurchased $150 million or approximately 3 million shares of its common stock in 2016, with the majority occurring prior to the fourth quarter.  Primerica Life Insurance Company’s statutory risk-based capital (RBC) ratio was estimated to be approximately 450% as of December 31, 2016.

4


Non-GAAP Financial Measures
We report financial results in accordance with U.S. generally accepted accounting principles (GAAP).  We also present adjusted direct premiums, other ceded premiums, operating revenues, operating income before income taxes, net operating income, adjusted stockholders’ equity and diluted operating earnings per shareAdjusted direct premiums and other ceded premiums are net of amounts ceded under coinsurance transactions that were executed concurrent with our initial public offering 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.  Operating revenues, operating income before income taxes, net operating income, and diluted operating earnings per share exclude the impact of realized investment gains and losses, including other-than-temporary impairments (OTTI), for all periods presented.  We exclude realized investment gains and losses in measuring 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 that are not directly associated with the Company's insurance operations.  Adjusted stockholders' equity excludes the impact of net unrealized investment gains and losses recorded in other comprehensive income (loss) for all periods presented.  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.

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

5


Earnings Webcast Information
Primerica will hold a webcast Thursday, February 9, 2017 at 10:00 am EST, to discuss fourth quarter results.  This release and a detailed financial supplement will be posted on Primerica’s website.  Investors are encouraged to review these materials.  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.

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 our sales representatives; changes to the independent contractor status of our sales representatives; our or our sales representatives’ violation of or non-compliance with laws and regulations or the failure to protect the confidentiality of client information; differences between our actual experience and our expectations regarding mortality, persistency, expenses and interests rates as reflected in the pricing for our insurance policies; the occurrence of a catastrophic event that causes a large number of premature deaths of our insureds; changes in federal and state legislation, including other legislation or regulation that affects our insurance and investment product businesses, such as the DOL’s recently adopted rule defining who is a “fiduciary” of a qualified retirement plan as a result of giving investment advice; our failure to meet RBC standards or other minimum capital and surplus requirements; a downgrade or potential downgrade in our insurance subsidiaries’ financial strength ratings or our senior debt ratings; the effects of credit deterioration and interest rate fluctuations on our invested asset portfolio; incorrectly valuing our investments; inadequate or unaffordable reinsurance or the failure of our reinsurers to perform their obligations; the failure of, or legal challenges to, the support tools we provide to our sales force; heightened standards of conduct or more stringent licensing requirements for our sales representatives; inadequate policies and procedures regarding suitability review of client transactions; 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; fluctuations in the performance of client assets under management; 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; legal and regulatory investigations and actions concerning us or our sales representatives; the loss of key personnel; the failure of our information technology systems, breach of our information security or failure of our business continuity plan; and fluctuations in 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.

6

About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading distributor of financial products to middle income households in North America. Primerica representatives educate their Main Street 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. In addition, Primerica provides an entrepreneurial full or part-time business opportunity for individuals seeking to earn income by distributing the company’s financial products. We insured approximately 5 million lives and have over 2 million client investment accounts at December 31, 2016. Primerica stock is included in the S&P MidCap 400 and the Russell 2000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

Investor Contact:
Kathryn Kieser
470-564-7757
Email: investorrelations@primerica.com


Media Contact:
Keith Hancock
470-564-6328
Email: Keith.Hancock@Primerica.com
 
7


PRIMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
             
             
   
December 31, 2016
 
December 31, 2015
   
(In thousands)
Assets
           
Investments:
           
Fixed-maturity securities available-for-sale, at fair value
 
$
1,792,438
   
$
1,731,459
 
Fixed-maturity securities-held-to-maturity, at amortized cost
   
503,230
     
365,220
 
Equity securities available-for-sale, at fair value
   
44,894
     
47,839
 
Trading securities, at fair value
   
7,383
     
5,358
 
Policy loans
   
30,916
     
28,627
 
Total investments
   
2,378,861
     
2,178,503
 
Cash and cash equivalents
   
211,976
     
152,294
 
Accrued investment income
   
16,520
     
17,080
 
Due from reinsurers
   
4,193,562
     
4,110,628
 
Deferred policy acquisition costs, net
   
1,713,065
     
1,500,259
 
Agent balances, due premiums and other receivables
   
210,448
     
190,379
 
Intangible assets, net
   
54,915
     
58,318
 
Income taxes
   
37,369
     
35,067
 
Other assets
   
334,274
     
304,356
 
Separate account assets
   
2,287,953
     
2,063,899
 
Total assets
 
$
11,438,943
   
$
10,610,783
 
                 
Liabilities and Stockholders' Equity
               
Liabilities:
               
Future policy benefits
 
$
5,673,890
   
$
5,431,711
 
Unearned premiums
   
527
     
628
 
Policy claims and other benefits payable
   
268,136
     
238,157
 
Other policyholders' funds
   
363,038
     
365,276
 
Notes payable
   
372,919
     
372,552
 
Surplus note
   
502,491
     
364,424
 
Income taxes
   
225,006
     
148,125
 
Other liabilities
   
449,963
     
408,757
 
Payable under securities lending
   
73,646
     
71,482
 
Separate account liabilities
   
2,287,953
     
2,063,899
 
Total liabilities
   
10,217,569
     
9,465,011
 
                 
Stockholders' equity:
               
Common stock
   
457
     
483
 
Paid-in capital
   
52,468
     
180,250
 
Retained earnings
   
1,138,851
     
952,804
 
Accumulated other comprehensive income, net of income tax
   
29,598
     
12,235
 
Total stockholders' equity
   
1,221,374
     
1,145,772
 
Total liabilities and stockholders' equity
 
$
11,438,943
   
$
10,610,783
 
 
8


PRIMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
             
             
   
Three months ended December 31,
   
2016
 
2015
   
(In thousands, except per-share amounts)
Revenues:
           
Direct premiums
 
$
618,362
   
$
591,856
 
Ceded premiums
   
(398,867
)
   
(396,838
)
Net premiums
   
219,495
     
195,018
 
Commissions and fees
   
141,681
     
132,794
 
Net investment income
   
17,999
     
17,546
 
Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
Other, net
   
13,224
     
11,453
 
Total revenues
   
393,864
     
353,451
 
                 
Benefits and expenses:
               
Benefits and claims
   
94,672
     
85,694
 
Amortization of deferred policy acquisition costs
   
53,305
     
44,334
 
Sales commissions
   
69,326
     
67,536
 
Insurance expenses
   
33,476
     
29,667
 
Insurance commissions
   
4,456
     
4,388
 
Interest expense
   
7,157
     
7,471
 
Other operating expenses
   
44,408
     
41,967
 
Total benefits and expenses
   
306,800
     
281,057
 
Income before income taxes
   
87,064
     
72,394
 
Income taxes
   
30,191
     
24,445
 
Net income
 
$
56,873
   
$
47,949
 
                 
Earnings per share:
               
Basic earnings per share
 
$
1.21
   
$
0.97
 
Diluted earnings per share
 
$
1.21
   
$
0.97
 
                 
Shares used in computing earnings per share:
               
Basic
   
46,444
     
49,061
 
Diluted
   
46,495
     
49,093
 


9


PRIMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
   
             
   
Year ended December 31,
   
2016
 
2015
   
(In thousands, except per-share amounts)
Revenues:
           
Direct premiums
 
$
2,444,268
   
$
2,345,444
 
Ceded premiums
   
(1,600,559
)
   
(1,595,220
)
Net premiums
   
843,709
     
750,224
 
Commissions and fees
   
541,686
     
537,146
 
Net investment income
   
79,025
     
76,509
 
Realized investment gains (losses), including OTTI
   
4,088
     
(1,738
)
Other, net
   
50,576
     
42,058
 
Total revenues
   
1,519,084
     
1,404,199
 
                 
Benefits and expenses:
               
Benefits and claims
   
367,655
     
339,315
 
Amortization of deferred policy acquisition costs
   
180,582
     
157,727
 
Sales commissions
   
272,815
     
274,893
 
Insurance expenses
   
132,348
     
123,030
 
Insurance commissions
   
17,783
     
16,340
 
Interest expense
   
28,691
     
33,507
 
Other operating expenses
   
181,615
     
168,406
 
Total benefits and expenses
   
1,181,489
     
1,113,218
 
Income before income taxes
   
337,595
     
290,981
 
Income taxes
   
118,181
     
101,110
 
Net income
 
$
219,414
   
$
189,871
 
                 
Earnings per share:
               
Basic earnings per share
 
$
4.59
   
$
3.70
 
Diluted earnings per share
 
$
4.59
   
$
3.70
 
                 
Shares used in computing earnings per share:
               
Basic
   
47,411
     
50,881
 
Diluted
   
47,453
     
50,913
 
 
10


PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Operating Results Reconciliation
(Unaudited in thousands, except per share amounts)
                   
                   
   
Three months ended December 31,
     
   
2016
 
2015
 
% Change
Total revenues
 
$
393,864
   
$
353,451
     
11
%
Less: Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
       
Operating revenues
 
$
392,399
   
$
356,811
     
10
%
                         
Income before income taxes
 
$
87,064
   
$
72,394
     
20
%
Less: Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
       
Operating income before income taxes
 
$
85,599
   
$
75,754
     
13
%
                         
Net income
 
$
56,873
   
$
47,949
     
19
%
Less: Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
       
Less: Tax impact of reconciling items
   
(509
)
   
1,136
         
Net operating income
 
$
55,917
   
$
50,173
     
11
%
                         
Diluted earnings per share (1)
 
$
1.21
   
$
0.97
     
25
%
Less: Net after-tax impact of operating adjustments
   
0.02
     
(0.04
)
       
Diluted operating earnings per share (1)
 
$
1.19
   
$
1.01
     
18
%

(1)  Percentage change in earnings per share is calculated prior to rounding per share amounts.

PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Operating Results Reconciliation
(Unaudited in thousands, except per share amounts)
                   
                   
   
Year ended December 31,
     
   
2016
 
2015
 
% Change
Total revenues
 
$
1,519,084
   
$
1,404,199
     
8
%
Less: Realized investment gains (losses), including OTTI
   
4,088
     
(1,738
)
       
Operating revenues
 
$
1,514,996
   
$
1,405,937
     
8
%
                         
Income before income taxes
 
$
337,595
   
$
290,981
     
16
%
Less: Realized investment gains (losses), including OTTI
   
4,088
     
(1,738
)
       
Operating income before income taxes
 
$
333,507
   
$
292,719
     
14
%
                         
Net income
 
$
219,414
   
$
189,871
     
16
%
Less: Realized investment gains (losses), including OTTI
   
4,088
     
(1,738
)
       
Less: Tax impact of reconciling items
   
(1,436
)
   
557
         
Net operating income
 
$
216,762
   
$
191,052
     
13
%
                         
Diluted earnings per share (1)
 
$
4.59
   
$
3.70
     
24
%
Less: Net after-tax impact of operating adjustments
   
0.06
     
(0.02
)
       
Diluted operating earnings per share (1)
 
$
4.53
   
$
3.72
     
22
%

(1)  Percentage change in earnings per share is calculated prior to rounding per share amounts.

11


TERM LIFE INSURANCE SEGMENT
Adjusted Premiums Reconciliation
(Unaudited in thousands)
             
 
Three months ended December 31,
 
 
2016
 
2015  
Direct premiums
 
$
611,583
   
$
584,570
 
Less: Premiums ceded to IPO coinsurers
   
315,955
     
324,870
 
Adjusted direct premiums
 
$
295,628
   
$
259,700
 
                 
Ceded premiums
 
$
(396,157
)
 
$
(394,180
)
Less: Premiums ceded to IPO coinsurers
   
(315,955
)
   
(324,870
)
Other ceded premiums
 
$
(80,202
)
 
$
(69,310
)
                 
Net premiums
 
$
215,426
   
$
190,390
 


CORPORATE AND OTHER DISTRIBUTED PRODUCTS SEGMENT
Operating Results Reconciliation
(Unaudited in thousands)
             
    Three months ended December 31,
 
 
2016
 
2015
Total revenues
 
$
29,720
   
$
24,512
 
Less: Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
Operating revenues
 
$
28,255
   
$
27,872
 
                 
Loss before income taxes
 
$
(4,903
)
 
$
(12,013
)
Less: Realized investment gains (losses), including OTTI
   
1,465
     
(3,360
)
Operating loss before income taxes
 
$
(6,368
)
 
$
(8,653
)


PRIMERICA, INC. AND SUBSIDIARIES
Adjusted Stockholders' Equity Reconciliation
(Unaudited in thousands)
             
 
 
December 31, 2016 
 
December 31, 2015
Stockholders' equity
 
$
1,221,374
   
$
1,145,772
 
Less: Unrealized net investment gains recorded
  in stockholders' equity, net of income tax
   
42,791
     
32,036
 
Adjusted stockholders' equity
 
$
1,178,583
   
$
1,113,736
 

 
12
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit 99.2

 
 
 
 
 
Supplemental Financial Information
Fourth Quarter 2016
 
 
 

 
Table of Contents
PRIMERICA, INC.
Financial Supplement
 
 
Page
   
Preface, definition of Non-GAAP financial measures
3
   
Condensed balance sheets and reconciliation of balance sheet non-GAAP to GAAP financial measures
4
   
Financial results and other statistical data
5
   
Statements of income
6
   
Reconciliation of statement of income GAAP to non-GAAP financial measures
7
   
Segment operating results
8
Term Life Insurance segment - financial results, key statistics, and financial analysis
9-10
Investment and Savings Products segment - financial results, financial analysis, and key statistics
11-12
   
Investment portfolio
13-15
   
Five-year historical key statistics
16
 

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, 2015.
 
 
2 of 16

 
Preface
PRIMERICA, INC.
Financial Supplement
 
FOURTH QUARTER 2016
 

This document is a financial supplement to our fourth quarter 2016 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 and losses.  We exclude realized investment gains and losses in measuring 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 that are not directly associated with the Company's insurance operations.
 
● 
Adjusted stockholders’ equity refers to the removal of the impact of net unrealized gains and losses on invested assets.  We exclude unrealized investment gains and losses in measuring adjusted stockholders' equity as unrealized gains and losses from the Company's invested assets are largely caused by market movements in interest rates and credit spreads that do not necessarily correlate with the cash flows we will ultimately realize when an invested asset matures or is disposed.
 
● 
IPO coinsurance transactions adjustments relate to transactions in the first quarter of 2010, where we reinsured between 80% and 90% of our business that was in-force at year-end 2009 to entities then affiliated  with Citigroup Inc. (“Citi”) that were executed concurrent with our 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.
 
Management utilizes certain non-GAAP financial measures in managing the business and believes they present relevant and meaningful analytical metrics for evaluating the ongoing business.  Reconciliations of non-GAAP to GAAP financial measures are included in this financial supplement.
 
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.
Financial Supplement
                                                       
                                                       
(Dollars in thousands)
 
Dec 31,
2014
   
Mar 31,
2015
   
Jun 30,
2015
   
Sep 30,
2015
   
Dec 31,
2015
   
Mar 31,
2016
   
Jun 30,
2016
   
Sep 30,
2016
   
Dec 31,
2016
 
Condensed Balance Sheets
                                                     
Assets:
                                                     
Investments and cash excluding securities held to maturity
 
$
2,040,313
   
$
2,053,392
   
$
1,963,702
   
$
1,924,636
   
$
1,965,576
   
$
1,968,419
   
$
2,027,735
   
$
2,047,095
   
$
2,087,607
 
Securities held to maturity
   
220,000
     
238,000
     
328,000
     
356,000
     
365,220
     
404,860
     
431,000
     
454,000
     
503,230
 
Total investments and cash
   
2,260,313
     
2,291,392
     
2,291,702
     
2,280,636
     
2,330,796
     
2,373,279
     
2,458,735
     
2,501,095
     
2,590,837
 
Due from reinsurers
   
4,115,533
     
4,094,456
     
4,137,425
     
4,103,949
     
4,110,628
     
4,160,266
     
4,147,284
     
4,161,537
     
4,193,562
 
Deferred policy acquisition costs
   
1,351,180
     
1,377,022
     
1,430,508
     
1,465,175
     
1,500,259
     
1,559,833
     
1,619,236
     
1,672,454
     
1,713,065
 
Other assets
   
568,600
     
569,990
     
593,107
     
625,289
     
605,200
     
656,871
     
669,723
     
685,779
     
653,525
 
Separate account assets
   
2,440,303
     
2,386,265
     
2,324,980
     
2,086,598
     
2,063,899
     
2,264,108
     
2,311,124
     
2,347,816
     
2,287,953
 
Total assets
 
$
10,735,929
   
$
10,719,124
   
$
10,777,724
   
$
10,561,648
   
$
10,610,782
   
$
11,014,358
   
$
11,206,101
   
$
11,368,681
   
$
11,438,943
 
                                                                         
Liabilities:
                                                                       
Future policy benefits
 
$
5,264,608
   
$
5,289,016
   
$
5,361,580
   
$
5,388,042
   
$
5,431,711
   
$
5,518,834
   
$
5,581,043
   
$
5,629,967
   
$
5,673,890
 
Other policy liabilities
   
600,586
     
587,957
     
597,703
     
587,879
     
604,061
     
607,225
     
597,728
     
605,666
     
631,700
 
Income taxes
   
140,467
     
157,684
     
156,212
     
152,314
     
148,125
     
177,457
     
199,985
     
215,454
     
225,006
 
Other liabilities
   
403,292
     
393,718
     
376,179
     
389,264
     
408,757
     
409,870
     
413,888
     
426,970
     
449,963
 
Notes payable
   
372,187
     
372,278
     
372,369
     
372,460
     
372,552
     
372,643
     
372,735
     
372,827
     
372,919
 
Surplus note
   
219,147
     
237,162
     
327,176
     
355,190
     
364,424
     
404,079
     
430,233
     
453,247
     
502,491
 
Payable under securities lending
   
50,211
     
55,622
     
63,898
     
83,220
     
71,482
     
87,383
     
91,901
     
95,843
     
73,646
 
Separate account liabilities
   
2,440,303
     
2,386,265
     
2,324,980
     
2,086,598
     
2,063,899
     
2,264,108
     
2,311,124
     
2,347,816
     
2,287,953
 
Total liabilities
   
9,490,803
     
9,479,702
     
9,580,097
     
9,414,968
     
9,465,010
     
9,841,598
     
9,998,636
     
10,147,790
     
10,217,568
 
Stockholders’ equity:
                                                                       
Common stock ($0.01 par value) (1)
   
522
     
516
     
501
     
486
     
483
     
473
     
466
     
460
     
457
 
Paid-in capital
   
353,335
     
323,996
     
259,937
     
195,314
     
180,250
     
137,857
     
102,824
     
66,510
     
52,468
 
Retained earnings
   
795,741
     
830,624
     
871,440
     
912,749
     
952,804
     
989,685
     
1,040,860
     
1,090,388
     
1,138,851
 
Treasury stock
   
     
     
     
     
     
     
     
     
 
Accumulated other comprehensive income (loss), net:
                                                                       
Net unrealized investment gains (losses) not other-than-temporarily impaired
   
74,307
     
83,401
     
61,742
     
49,889
     
32,106
     
48,747
     
68,473
     
71,827
     
42,852
 
Net unrealized investment losses other-than-temporarily impaired
   
(461
)
   
(461
)
   
(461
)
   
(73
)
   
(71
)
   
(70
)
   
(68
)
   
(66
)
   
(62
)
Cumulative translation adjustment
   
21,682
     
1,346
     
4,468
     
(11,684
)
   
(19,801
)
   
(3,933
)
   
(5,091
)
   
(8,227
)
   
(13,193
)
Total stockholders’ equity
   
1,245,126
     
1,239,422
     
1,197,626
     
1,146,680
     
1,145,772
     
1,172,759
     
1,207,465
     
1,220,891
     
1,221,374
 
Total liabilities and stockholders' equity
 
$
10,735,929
   
$
10,719,124
   
$
10,777,724
   
$
10,561,648
   
$
10,610,782
   
$
11,014,358
   
$
11,206,101
   
$
11,368,681
   
$
11,438,943
 
                                                                         
Reconciliation of Adjusted Stockholders' Equity to Total Stockholders' Equity
                                                                       
Adjusted stockholders' equity
 
$
1,171,280
   
$
1,156,482
   
$
1,136,345
   
$
1,096,864
   
$
1,113,736
   
$
1,124,082
   
$
1,139,060
   
$
1,149,131
   
$
1,178,584
 
Reconciling items:
                                                                       
Net unrealized investment gains (losses) not other-than-temporarily impaired
   
74,307
     
83,401
     
61,742
     
49,889
     
32,106
     
48,747
     
68,473
     
71,827
     
42,852
 
Net unrealized investment losses other-than-temporarily impaired
   
(461
)
   
(461
)
   
(461
)
   
(73
)
   
(71
)
   
(70
)
   
(68
)
   
(66
)
   
(62
)
Total reconciling items
   
73,846
     
82,940
     
61,281
     
49,816
     
32,036
     
48,678
     
68,405
     
71,760
     
42,791
 
Total stockholders’ equity
 
$
1,245,126
   
$
1,239,422
   
$
1,197,626
   
$
1,146,680
   
$
1,145,772
   
$
1,172,759
   
$
1,207,465
   
$
1,220,891
   
$
1,221,374
 
                                                                         
Adjusted Stockholders' Equity Rollforward
                                                                       
Balance, beginning of period
 
$
1,216,813
   
$
1,171,280
   
$
1,156,482
   
$
1,136,345
   
$
1,096,864
   
$
1,113,736
   
$
1,124,082
   
$
1,139,060
   
$
1,149,131
 
Net Income
   
45,466
     
43,401
     
49,173
     
49,350
     
47,948
     
45,176
     
59,326
     
58,038
     
56,874
 
Shareholder dividends
   
(6,462
)
   
(8,517
)
   
(8,357
)
   
(8,042
)
   
(7,893
)
   
(8,295
)
   
(8,151
)
   
(8,511
)
   
(8,410
)
Retirement of shares and warrants
   
(82,447
)
   
(44,789
)
   
(70,999
)
   
(71,433
)
   
(20,538
)
   
(52,988
)
   
(41,330
)
   
(41,012
)
   
(18,697
)
Net foreign currency translation adjustment
   
(8,600
)
   
(20,336
)
   
3,121
     
(16,152
)
   
(8,116
)
   
15,867
     
(1,157
)
   
(3,136
)
   
(4,966
)
Other, net
   
6,510
     
15,444
     
6,925
     
6,795
     
5,471
     
10,585
     
6,290
     
4,692
     
4,653
 
Balance, end of period
 
$
1,171,280
   
$
1,156,482
   
$
1,136,345
   
$
1,096,864
   
$
1,113,736
   
$
1,124,082
   
$
1,139,060
   
$
1,149,131
   
$
1,178,584
 
                                                                         
Deferred Policy Acquisition Costs Rollforward
                                                                       
Balance, beginning of period
 
$
1,321,415
   
$
1,351,180
   
$
1,377,022
   
$
1,430,508
   
$
1,465,175
   
$
1,500,259
   
$
1,559,833
   
$
1,619,236
   
$
1,672,454
 
General expenses deferred
   
8,171
     
7,953
     
8,554
     
8,396
     
7,951
     
8,443
     
9,138
     
9,202
     
8,226
 
Commission costs deferred
   
67,980
     
70,389
     
78,799
     
79,787
     
77,810
     
81,174
     
89,783
     
91,783
     
89,647
 
Amortization of deferred policy acquisition costs
   
(39,544
)
   
(36,213
)
   
(36,383
)
   
(40,797
)
   
(44,334
)
   
(43,129
)
   
(38,720
)
   
(45,428
)
   
(53,305
)
Foreign currency impact and other, net
   
(6,842
)
   
(16,287
)
   
2,516
     
(12,718
)
   
(6,343
)
   
13,086
     
(798
)
   
(2,339
)
   
(3,957
)
Balance, end of period
 
$
1,351,180
   
$
1,377,022
   
$
1,430,508
   
$
1,465,175
   
$
1,500,259
   
$
1,559,833
   
$
1,619,236
   
$
1,672,454
   
$
1,713,065
 
 
 
(1)
Outstanding common shares exclude restricted stock units.
 
4 of 16

 
Financial Results and Other Statistical Data
 
PRIMERICA, INC.
Financial Supplement
                                                                         
                                                                         
                                                   
YOY Q4
               
YOY YTD
 
(Dollars in thousands, except per-share data)
   
Q1
2015
     
Q2
2015
     
Q3
2015
     
Q4
2015
     
Q1
2016
     
Q2
2016
     
Q3
2016
     
Q4
2016
   

Change
   
%
Change
   
YTD
2015
   
YTD
2016
   
$
Change
   
%
Change
 
Earnings per Share
                                                                                                   
Basic earnings per share:
                                                                                                   
Weighted-average common shares and fully vested equity awards
   
52,642,881
     
51,786,679
     
50,081,730
     
49,061,165
     
48,549,580
     
47,657,649
     
47,008,203
     
46,444,202
     
(2,616,963
)
   
-5.3
%
   
50,881,078
     
47,411,145
     
(3,469,933
)
   
-6.8
%
                                                                                                                 
Net income
 
$
43,401
   
$
49,173
   
$
49,350
   
$
47,948
   
$
45,176
   
$
59,326
   
$
58,038
   
$
56,874
   
$
8,926
     
18.6
%
 
$
189,872
   
$
219,414
   
$
29,542
     
15.6
%
Less income attributable to unvested participating securities
   
(444
)
   
(366
)
   
(379
)
   
(374
)
   
(370
)
   
(491
)
   
(494
)
   
(482
)
   
(108
)
   
-28.8
%
   
(1,572
)
   
(1,835
)
   
(263
)
   
-16.7
%
Net income used in computing basic EPS
 
$
42,956
   
$
48,806
   
$
48,971
   
$
47,574
   
$
44,806
   
$
58,835
   
$
57,544
   
$
56,392
   
$
8,818
     
18.5
%
 
$
188,300
   
$
217,579
   
$
29,280
     
15.5
%
Basic earnings per share
 
$
0.82
   
$
0.94
   
$
0.98
   
$
0.97
   
$
0.92
   
$
1.23
   
$
1.22
   
$
1.21
   
$
0.24
     
25.2
%
 
$
3.70
   
$
4.59
   
$
0.89
     
24.0
%
                                                                                                                 
Net operating income
 
$
42,566
   
$
48,791
   
$
49,521
   
$
50,174
   
$
45,680
   
$
57,104
   
$
58,061
   
$
55,917
   
$
5,743
     
11.4
%
 
$
191,052
   
$
216,762
   
$
25,711
     
13.5
%
Less operating income attributable to unvested participating securities
   
(436
)
   
(363
)
   
(381
)
   
(392
)
   
(375
)
   
(472
)
   
(494
)
   
(474
)
   
(82
)
   
-20.9
%
   
(1,582
)
   
(1,813
)
   
(231
)
   
-14.6
%
Net operating income used in computing basic operating EPS
 
$
42,131
   
$
48,427
   
$
49,140
   
$
49,782
   
$
45,306
   
$
56,632
   
$
57,567
   
$
55,443
   
$
5,661
     
11.4
%
 
$
189,470
   
$
214,950
   
$
25,480
     
13.4
%
Basic operating income per share
 
$
0.80
   
$
0.94
   
$
0.98
   
$
1.01
   
$
0.93
   
$
1.19
   
$
1.22
   
$
1.19
   
$
0.18
     
17.6
%
 
$
3.72
   
$
4.53
   
$
0.81
     
21.8
%
                                                                                                                 
Diluted earnings per share:
                                                                                                               
Weighted-average common shares and fully vested equity awards
   
52,642,881
     
51,786,679
     
50,081,730
     
49,061,165
     
48,549,580
     
47,657,649
     
47,008,203
     
46,444,202
     
(2,616,963
)
   
-5.3
%
   
50,881,078
     
47,411,145
     
(3,469,933
)
   
-6.8
%
Dilutive impact of contingently issuable shares
   
48,104
     
25,292
     
21,792
     
31,685
     
24,090
     
49,680
     
42,632
     
51,274
     
19,589
     
61.8
%
   
31,718
     
41,919
     
10,201
     
32.2
%
Shares used to calculate diluted EPS
   
52,690,985
     
51,811,971
     
50,103,522
     
49,092,850
     
48,573,670
     
47,707,329
     
47,050,835
     
46,495,476
     
(2,597,374
)
   
-5.3
%
   
50,912,796
     
47,453,064
     
(3,459,732
)
   
-6.8
%
                                                                                                                 
Net income
 
$
43,401
   
$
49,173
   
$
49,350
   
$
47,948
   
$
45,176
   
$
59,326
   
$
58,038
   
$
56,874
   
$
8,926
     
18.6
%
 
$
189,872
   
$
219,414
   
$
29,542
     
15.6
%
Less income attributable to unvested participating securities
   
(444
)
   
(366
)
   
(379
)
   
(374
)
   
(370
)
   
(490
)
   
(493
)
   
(481
)
   
(107
)
   
-28.7
%
   
(1,571
)
   
(1,833
)
   
(262
)
   
-16.7
%
Net income used in computing diluted EPS
 
$
42,957
   
$
48,807
   
$
48,971
   
$
47,574
   
$
44,806
   
$
58,835
   
$
57,544
   
$
56,393
   
$
8,818
     
18.5
%
 
$
188,301
   
$
217,581
   
$
29,280
     
15.5
%
Diluted earnings per share
 
$
0.82
   
$
0.94
   
$
0.98
   
$
0.97
   
$
0.92
   
$
1.23
   
$
1.22
   
$
1.21
   
$
0.24
     
25.2
%
 
$
3.70
   
$
4.59
   
$
0.89
     
24.0
%
                                                                                                                 
Net operating income
 
$
42,566
   
$
48,791
   
$
49,521
   
$
50,174
   
$
45,680
   
$
57,104
   
$
58,061
   
$
55,917
   
$
5,743
     
11.4
%
 
$
191,052
   
$
216,762
   
$
25,711
     
13.5
%
Less operating income attributable to unvested participating securities
   
(435
)
   
(363
)
   
(381
)
   
(392
)
   
(374
)
   
(472
)
   
(494
)
   
(473
)
   
(82
)
   
-20.9
%
   
(1,581
)
   
(1,811
)
   
(230
)
   
-14.6
%
Net operating income used in computing diluted operating EPS
 
$
42,131
   
$
48,427
   
$
49,140
   
$
49,782
   
$
45,306
   
$
56,632
   
$
57,567
   
$
55,443
   
$
5,661
     
11.4
%
 
$
189,471
   
$
214,951
   
$
25,480
     
13.4
%
Diluted operating income per share
 
$
0.80
   
$
0.93
   
$
0.98
   
$
1.01
   
$
0.93
   
$
1.19
   
$
1.22
   
$
1.19
   
$
0.18
     
17.6
%
 
$
3.72
   
$
4.53
   
$
0.81
     
21.7
%
                                                                                                                 
 
                                                                                                               
                                                                                                                 
     
Q1
2015
     
Q2
2015
     
Q3
2015
     
Q4
2015
     
Q1
2016
     
Q2
2016
     
Q3
2016
     
Q4
2016
   
YOY Q4
                   
YOY YTD
 
     

Change
   
%
Change
   
YTD
2015
   
YTD
2016
   
$
Change
   
%
Change
 
Annualized Return on Equity
                                                                                                               
Average stockholders' equity
 
$
1,242,274
   
$
1,218,524
   
$
1,172,153
   
$
1,146,226
   
$
1,159,266
   
$
1,190,112
   
$
1,214,178
   
$
1,221,133
   
$
74,907
     
6.5
%
 
$
1,194,794
   
$
1,196,172
   
$
1,378
     
0.1
%
Average adjusted stockholders' equity
 
$
1,163,881
   
$
1,146,414
   
$
1,116,605
   
$
1,105,300
   
$
1,118,909
   
$
1,131,571
   
$
1,144,095
   
$
1,163,857
   
$
58,557
     
5.3
%
 
$
1,133,050
   
$
1,139,608
   
$