Good morning and welcome to the Primerica Reports Third Quarter 2012 Results Conference Call. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Ms. Kathryn Kieser, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Venice. Good morning everyone thank you for joining us today as we discuss Primerica results for the third quarter of 2012. Yesterday afternoon we issued our press release reporting financial results for the quarter ended September 30, 2012. A copy of the release is available on investor relation section of our website in investors.primerica.com. With us on the call this morning are; Rich Williams, our Chairman and Co-CEO; John Addison our Chairman of Distribution and Co-CEO and Alison Rand, our CFO. We referenced certain non-GAAP financial measures in our press release and on this call. These non-GAAP measures are provided because management uses them to make financial, operating and planning decisions and in evaluating the Company’s performance. We believe these measures will assist you in assessing the Company’s underlying performance for the periods been reported. These non-GAAP measures have limitations and reconciliations between non-GAAP and GAAP financial measures are attached to our press release. You can see our GAAP results on page three of the presentation. On today’s call we will make forward-looking statements in accordance with the Safe Harbor provision of the Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that may project, indicate or imply future results, events, performance or achievements and may contain words such as expect, intend, plan, anticipate, estimate and believe or similar words derived from those words. They are not guarantees and such statements involve risk and uncertainties that could cause actual results to differ materially from these statements. For a discussion of these risks please read the risk factors contained in our Form 10-K for the year ended December 31, 2011. This morning’s call is been recorded and webcast live on the internet. The webcast and corresponding slides will be available in the investor relation section of our website for at least 30 days after the presentation. After the prepared remarks, we will open the call to questions from our dialed in participants. Now, I’ll turn the call over to Rick.

Thank you, Kathryn. Good morning everyone. Welcome to Primerica’s third quarter 2012 earnings call. A strong third quarter results were marked by solid core performance across the business segments. As you can see, beginning on slide 4, operating revenues increased by 7% and net operating income increased 21% over the prior year period. Net operating income per diluted share increased 46% to $0.72 from a year ago. These results were driven by the continued building of recurring Term Life income and investment savings, product sales and client based earnings benefited from favorable market performance. And the Canadian Segregated Fund DAC amortization was favorably impacted by the positive equity returns resulting in a $2.6 million year-over-year reduction in DAC amortization. Year-over-year results also reflect net investment income enhanced by $2.8 million of certain unusual items that included securities called from our bond portfolio and the recovery of defaulted interests during the quarter. Benefit of these items offset the expected pressure of lower invested assets flowing our stock repurchases over the past 12 months as well as lower market yields. We feel good about the net operating income return on adjusted stockholder equity increasing to 15.1% from 10.9% a year-ago period. Achieving this level of ROE within two and half years from our IPO was accomplished through effective capital management, the layering of new Term Life premium, strong investment savings product performance and active expense management. We continued capital redeployment in October with the $60 million share repurchase from Warburg Pincus. Completing the $75 million share repurchase program that began in the third quarter. Prior to the Warburg transaction, we repurchased approximately $14 million of shares in the open market. We were able to retire a total of 2.6 million shares of common stock through our repurchase program that will be accretive…

Thanks, Rick, and good morning, everybody. After our post-convention recruiting surge in 2011, it became apparent that we needed to re-focus the front-end of our business on licensing in order to build and grow distribution. Over time our monthly incentives combined with the economic downturn had shifted the focus of our sales force leaders. The new recruit is a source of both new license distribution and sales leads. After the surge, it became clear that the sales force had shifted more towards a recruit being a source of the sales lead to hit monthly production targets, than as a new potential license to build long-term distribution. In order to build healthy new distribution for the future of our company, we needed to adjust this focus. So this year, we launched several initiatives to shift this [demand shift]. We recalibrated our messaging and incentive programs, put more focus on licensing. We also have introduced a streamlined life licensing plan for new recruits. These initiatives improved our licensing ratios, but negatively impacted recruiting levels in the second and third quarters. The impact over recruiting was anticipated, but necessary to change the long-term behavior for the organization. As we anticipated last quarter, the size of our life license sales force in the third quarter remained consistent with the prior quarter and the prior year period despite the challenging year-over-year recruiting and licensing comparisons. Last year’s results were elevated by the short-term recruiting initiatives launched at convention in June 2011. Approximately, 25,000 of the incremental recruits in the third quarter of 2011 were a result of this convention incentive. As you can see on Slide 5, year-over-year recruiting declined 43% and new life licenses declined 7% in the third quarter of 2012. Sequentially, new life licenses declined 12% from the second quarter. Our recruiting…

Thank you, John. Good morning, everyone. Today, I will start with a discussion of the earnings results for each of our segments including insight into our Term Life sub-segment. Then I will review company wide insurance and operating expenses and conclude with an overview of invested assets and net investment income. Starting with Slide 6, our 16% year-over-year growth in Term Life operating revenues is driven by net premium growth of 17% as the new term block continues to build. Likewise, the growth in required statutory assets allocated to the Term Life increased the segments net investment income year-over-year. As Rick mentioned earlier, net investment income also benefited $2.8 million from cost securities and the recovery of interest from our previously defaulted bond of which about $1.9 million was allocated to Term Life with the reminder recorded in the Corporate and other segments. Term Life operating income before income taxes increased by 22% over the prior year period driven by the solid revenue growth, I just described and higher commission deferrals, which primarily benefited new term. Results also reflect growth in premium related expenses and high year interest expense related to the redundant reserve financing we executed earlier this year. During the quarter, incurred claims were consistent with the year ago period, while persistency experienced a slightly lower for new term and moderately high year for legacy. On a sequential quarter basis, operating income before income taxes declined by 6% primarily reflecting second quarters’ strong seasonal persistency and lower incurred claims. Since the IPO, the Term Life segment has shown robust growth. Our direct premiums grow slowly as legacy premiums run-off and are replaced by the layering of new term premiums, net premiums grow much faster. The results for new term being – this results from new term being a…

Thanks, Alison. Our third quarter results highlight that Primerica is not a typical life insurance company. Our focus is on generating distribution profits to the largest life insurance sales force in North America. While balance sheet may look like an insurance company, we write profitable term life insurance that requires low investment leverage. We also lock in the mortality risk with the extensive use of mortality reinsurance making term life income look more like distribution profits. And our substantial fee based income from the investment and savings product segment generates distributable free cash flow. Our strong third quarter results were marked by solid core performance across business segments. The emergent of long-term recurring life insurance revenues coupled with positive investment and savings product performance and our share repurchases has continue to drive EPS and ROE expansion underscoring the strength of our franchise. Now, we’ll open it up for questions.

Thank you, Mr. Williams. (Operator Instructions) Our first question will come from Jeff Schuman of KBW. Please go ahead. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: Thank you. Good morning.

Good morning.

Good morning, Jeff. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: I was wondering if we can go down and read a little bit on some of the expense guidance, Alison. First of all, you do suggest there will be some growth in premium-related taxes, but is that simply going to – obviously, tax is going to grow in proportion to premium or is there something beyond that.

They will grow in proportion to premiums. But understand as well that, they will grow more closely in proportion to net premium and new term, because we loose an allowance if we will for what’s running off on legacy. So overall, we don’t expect any increases in our premium tax rate and that we will want to see growth in our overall direct premium and to have a little bit more of a shift towards what we fund versus what is covered by Citi expense allowance. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: Okay. And so, once again, the expense allowances have been pretty much running off in proportion to ceded premiums in legacy. So that trend basically continues?

That is correct. Both of those trends are very consistent with what you’ve seen throughout 2012 and for that matter 2011. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: Okay. That’s helpful. And then on the IT expenses and the occupancy cost, any help there in terms of timing next year?

Sure. The IT expenses, you will actually see throughout the entire year. So we’ve actually negotiated really the last of the major contracts already and in fact we are under those new contracts beginning in the fourth quarter of this year. So that will be ratable throughout the year. We obviously incur that expense over the period over which we have the benefit of utilizing the software or the licenses. So that will be ratable throughout the year. On the building, we intend to move into or begin taking occupancy of the new building in March. So really, you will not see much of the increase happening in the first quarter, it will really start to move very late first quarter, but be predominantly seen in the second through fourth quarters. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: Okay. And then just lastly, the IT and the occupancy, I think, those expenses geographically would be distributed throughout the segments or?

That is correct. I will say the one-time cost associated with the new facility, so about half of the $4.6 million that I quoted. We do intend leave corporate and other because it’s really a sort of one-time overhead type expense. But other than that, the occupancy costs themselves will be shared by the segments as they have been in the past as were the IT cost. Jeffrey R. Schuman – Keefe, Bruyette & Woods, Inc.: Okay. Thanks for the help.

You are welcome.

Our next question will come from Sean Dargan of Macquarie. Please go ahead. Sean Dargan – Macquarie Research Equities: Thank you and good morning.

Hi, Sean. Sean Dargan – Macquarie Research Equities: I got a couple of questions about your capital positions. So your debt to total capital ratio is in the 21% range. Does that imply you have capacity to issue more debt?

The answer is, yes, it would. Although, as I mentioned with the dividend from Primerica Life next year will be lowering the shareholder equity number as we intend to use that money to buy the stock back. So although, it shows excess capacity at the moment, we will get into that as we take the dividend from Primerica Life and repurchase stock. Sean Dargan – Macquarie Research Equities: Okay

We do – and just we have said and do believe, our longer-term debt-to-capital is about 25%. Yes, the answer is there is a little bit of room there. Sean Dargan – Macquarie Research Equities: Okay. And it looks like tax rates on dividends are going up. Would your board ever consider declaring a special dividend before this year is over?

Sean Dargan – Macquarie Research Equities: Okay. Thank you.

Our next question will come from Paul Sarran of Evercore Partners. Please go ahead. Paul Sarran – Evercore Partners: Hi, good morning.

Hey, Paul. Paul Sarran – Evercore Partners: How much did you benefit in the number of terminated agents this quarter from changes and procedures that you implemented earlier this year? And then, a more general question about the sales force. As we move forward, how do you expect to balance building, recruiting with maintaining licensing yields as we go forward from here?

I’ll let – Rick will do the first part of it and then – this is John, I’ll handle the second part.

Yeah, let me just comment on terminations, because I noticed several of you in your comments last night raised that as a question. The way that we look at terminations is, we look at terminations as a percentage of the beginning sales force for that quarter. And if you go back to 2009 and it does change by quarter depending upon states that come up for renewal. If you go back to 2009, that percentage was 9.2%; 2010, it was 9%; 2011, it was 9.8% and then this past quarter was 8.8%. So the 8.8% is actually not that out of line relative to 2009 and 2010 experienced, although it is about 900 more terminations than what we – less terminations than what we had in 2011 just to put that in a perspective for you. Relative to the change in process, I said last quarter, the improvement was about 1,200 quarter-over-quarter terminations or non-renewals, I said about half came from the new process and about half of the 900 came from the new process as well.

Good. And I’ll take the second part of it and – you asked the million dollar question that asset round to deal with all the times in Primerica. I have said many times to I think most of you in conferences and questions there. Primerica is an aimed adjust business. You are moving a very large battleship. You are not, and you make mistakes when you start just trying to change things very fast because you never see the effects of what you did, because that has to be aimed and adjusted. We stepped back this year and we did a lot of things, whether it was within the incentives for our contents and what I would do every month to drive recruiting that we took a lot of excesses out there. We made a significant modification to our compensation program, which was very focused on longer term building not short-term hitting targets. We made a lot of very strategic decisions as we related to that and we’ve improved the ratio. I will say a lot, I mean, in life you got to learn to walk and shoot gun at the same time, you can’t just say, okay, we’re going to do this and not do the other. And as we’re now heading into the closing part of this year and beginning the real planning for next year, as we build toward our convention next year in the Georgia Dome. It is we want to shift more to a recurring focus, okay? But the challenge there is, I have a list of ideas that I can get on TV and just scream a few things and jump recruiting, okay? But probably licensing ratios would go back the direction they went. What we want to do is maintain and build on our licensing ratio and grow recruiting in a healthy way. We are working right now – as we head into – I had a meeting the other day where I told people, in 2012, we did a lot of alterations, we changed a lot things. And any time you change, people tend to discuss change. In 2012, we want to improve and grow versus change and discuss and we want to focus things very much more toward recruiting, but I believe that is one of the things we will build into in the first quarter of next year. But we would do it in a healthy way and not just ramp up recruiting and have licensing go back the wrong direction again. So that’s what we’re working on right now. Paul Sarran – Evercore Partners: Okay. Thank you.

(Operator Instructions) The next question will come from Steven Schwartz of Raymond James. Steven D. Schwartz – Raymond James & Associates, Inc.: Hey, good morning everybody.

Hey, buddy. How are you doing?

Hi, Steven. Steven D. Schwartz – Raymond James & Associates, Inc.: Alright, how you all doing?

Doing good partner. Steven D. Schwartz – Raymond James & Associates, Inc.: Good, good. Hey, a couple of questions here. John, just on the – going back to the topic of terminations of agents, is certainly like the description of moving forward to daily kind of the monthly bonus might help with terminations as well. It that accurate?

You know Steven, I don’t really think that will have a significant effect on it. But terminations really are more driven, but – I don’t even like the word termination, because it really is not renewals, by and large. And the daily could be – going more from the bonuses to daily commissions really is more of an effect on our regional wise presence. Our full time people and what their focus is and it really does not have a significant change to the part-time people who are the people that make up that number. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay. Moving on, Alison, all in what is the – realizing it changes by state, but what would be your premium tax rate?

We accrue something sigh of 3%, somewhere between 2% and 3% and it’s not really the premium tax, it’s got municipal taxes, a lot of things that we normalize into a per premium dollar rate, but they are actually fixed charges. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay.

It’s in the twos. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay. And it seems everybody is raising their prices and I’m not sure that you guys are in that. Maybe that’s the one that you could address, but I was wondering if reinsurance cost might be going up?

Sure. On the first question, the answer is no. When we launched the current product theories back in 2011, we were already in a pretty tight interest rate environment and so obviously, our pricing took that into consideration. And obviously, because we sell term life insurance interest rates in and up themselves are not a large component of our profitability. The rates we assume will impact the timing over which we recognize earnings, but not really the aggregate earnings. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay.

…on the product itself. Obviously, what we have available to us from net investment income on free capital et cetera is subject to the download pressure. From a reinsurance perspective, we have not seen any pressure for pricing increases at all let alone specifically for interest rates again since we use predominantly YRT type reinsurance. We are not really borrowing the reinsurancers capital, per se like you have in a co-insurance relationship. So, I think there is less susceptibility to interest rate volatility. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay. And one more if I, may be for Rick. Rick, maybe you can update if there is anything to update what’s going on regulatorily with regards to captives?

Yeah. I mean, I sure you’re following the NAIC subgroup came out with a somewhat negative report relative to using captives for the XXX reserves. We’re working with the [ACOI] who is taking the position opposite thinking that there is a valuable role for captives in there and also sort of following to see how it goes. I mean clearly the industry finding a mechanism for financing XXX reserves is critical to the industry and to the ultimate client. So there is – they will be discussed, but I feel pretty confident that I will get to a right answer there. Steven D. Schwartz – Raymond James & Associates, Inc.: Okay. Thank you guys.

And ladies and gentlemen that will conclude our question-and-answer session. We thank you for attending today’s presentation. The conference has now concluded. You may disconnect your lines.