Primerica 2010 Annual Report - Direct Selling News

Commissions and fees. The following tablesets forth a breakdown of our commissions andfees and the aggregate investment value ofsales of investment and savings products thatgenerate sales-based revenue, asset values foraccounts that generate asset-based revenuesand the number of fee-generating accounts:Year endedDecember 31,Change2009 2008 $ %(Dollars and accounts in thousands)Revenue sourceSales-basedrevenues $ 118,798 $ 168,614 $ (49,816) -30%Asset-basedrevenues $ 127,581 $ 158,934 $ (31,353) -20%Account-basedrevenues $ 43,247 $ 47,243 $ (3,996) -8%Revenue metricProduct sales $2,743,568 $ 3,966,436 $ (1,222,868) -31%Average accountvalues $26,611,607 $32,163,880 $(5,552,273) -17%Average number offee-generatingaccounts 2,839 3,082 (243) -8%Commissions and fees decreased $85.2 million,or 23%, to $289.6 million for the year endedDecember 31, 2009 from $374.8 million for theyear ended December 31, 2008. This decreaseresulted primarily from declines in sales-basedrevenues and asset-based revenues of $49.8million and $31.4 million, respectively. Thedecline in sales-based revenue resulted fromadverse economic and market conditions. Thedecline in asset-based revenue resulted fromlower account values during the period due tolower equity valuations in the United States andCanada beginning in the second half of 2008and continuing through the fourth quarter of2009. Account-based revenues declined $4.0million as a result of lower sales of funds forwhich we act as recordkeeper. Differences inthe percentage change between commissionand fee revenues and underlying revenuemetrics were primarily attributable to changesin the product mix, none of which was deemedmaterial on an individual basis in thecomparative periods, as well as small variancesattributable to averaging.Other, net. Other, net decreased $1.2 million,or 10%, to $10.5 million for the year endedDecember 31, 2009 from $11.7 million for theyear ended December 31, 2008. The decrease96 Freedom Lives Here TMresulted from lower incentive paymentsreceived from product originators in 2009.Commission expenses, includingamortization of DAC. Commission expenses,including amortization of DAC, decreased $50.1million, or 26%, to $143.0 million for the yearended December 31,2009 from$193.1 million for theyear endedDecember 31, 2008.This decrease resultedfrom declines in salesactivity and assetvalues as a result ofadverse economic andmarket conditions.Other operatingexpenses. Otheroperating expensesdecreased $4.5million, or 7%, to$63.7 million for the year ended December 31,2009 from $68.2 million for the year endedDecember 31, 2008. This decrease wasprimarily the result of a $0.7 million decline inadministrative fees paid on Canadiansegregated fund products due primarily to adecline in underlying asset values, $1.4 millionlower incentive compensation accruals for2009, and $0.8 million lower call center andother outsourcing expenses.