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Revenue from Contracts with Customers | 6 Months Ended
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Jun. 30, 2018
Revenue From Contract With Customer [Abstract] |
Revenue from Contract with Customers | (13) Revenue from Contracts with Customers Our revenues from contracts with customers primarily include:
| • | Commissions and fees earned for the marketing and distribution of investment and savings products underwritten by mutual fund companies and annuity providers. For purposes of ASU 2014-09, mutual fund companies and annuity providers are considered the customers in marketing and distribution arrangements.
| • | Fees earned for investment advisory and administrative services within our managed investments programs.
| • | Account-based fees for transfer agent recordkeeping functions and non-bank custodial services.
| • | Fees associated with the distribution of other third-party financial products.
| • | Other revenue from the sale of miscellaneous products and services including monthly subscription fees from our sales representatives for access to Primerica Online ("POL"), our primary sales force support tool.
Premiums from insurance contracts we underwrite, fees received from segregated funds insurance contracts, and income earned on our invested assets are excluded from the definition of revenues from contracts with customers in accordance with U.S. GAAP. The disaggregation of our revenues from contracts with customers were as follows:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands) |
Term Life Insurance segment revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other, net |  | $ | 10,913 |  |  | $ | 10,244 |  |  | $ | 21,328 |  |  | $ | 19,690 |
Total segment revenues from contracts with customers |  |  | 10,913 |  |  |  | 10,244 |  |  |  | 21,328 |  |  |  | 19,690 |
Revenues from sources other than contracts with customers |  |  | 262,065 |  |  |  | 228,657 |  |  |  | 521,958 |  |  |  | 453,263 |
Total Term Life Insurance segment revenues |  | $ | 272,978 |  |  | $ | 238,901 |  |  | $ | 543,286 |  |  | $ | 472,953 |
Investment and Savings Products segment revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions and fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales-based revenues |  | $ | 64,307 |  |  | $ | 60,692 |  |  | $ | 128,768 |  |  | $ | 121,209 |
Asset-based revenues |  |  | 66,230 |  |  |  | 53,066 |  |  |  | 125,771 |  |  |  | 103,529 |
Account-based revenues |  |  | 20,438 |  |  |  | 13,282 |  |  |  | 41,033 |  |  |  | 26,499 |
Other, net |  |  | 2,424 |  |  |  | 2,376 |  |  |  | 4,760 |  |  |  | 4,575 |
Total segment revenues from contracts with customers |  |  | 153,399 |  |  |  | 129,416 |  |  |  | 300,332 |  |  |  | 255,812 |
Revenues from sources other than contracts with customers (segregated funds) |  |  | 9,442 |  |  |  | 14,358 |  |  |  | 24,551 |  |  |  | 28,368 |
Total Investment and Savings Products segment revenues |  | $ | 162,841 |  |  | $ | 143,774 |  |  | $ | 324,883 |  |  | $ | 284,180 |
Corporate and Other Distributed Products segment revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions and fees (1) |  | $ | 7,523 |  |  | $ | 6,919 |  |  | $ | 14,644 |  |  | $ | 12,979 |
Other, net |  |  | 1,453 |  |  |  | 1,530 |  |  |  | 2,599 |  |  |  | 2,824 |
Total segment revenues from contracts with customers |  |  | 8,976 |  |  |  | 8,449 |  |  |  | 17,243 |  |  |  | 15,803 |
Revenues from sources other than contracts with customers |  |  | 23,020 |  |  |  | 22,572 |  |  |  | 42,325 |  |  |  | 45,924 |
Total Corporate and Other Distributed Products segment revenues |  | $ | 31,996 |  |  | $ | 31,021 |  |  | $ | 59,568 |  |  | $ | 61,727 |
(1) | Commissions and fees for the three and six months ended June 30, 2018 include $1.3 million and $2.1 million, respectively, attributable to performance obligations satisfied in a previous reporting period and represent the collection of variable consideration in the transaction price that had been previously constrained.
We recognize revenue upon the satisfaction of the related performance obligation, unless the transaction price includes variable consideration that is constrained; in which case, we recognize revenue when the uncertainty associated with the constrained amount is subsequently resolved. Variable consideration is not treated as constrained to the extent it is probable that no significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is resolved. We have no material obligations for refunds of commission and fees on contracts with customers subsequent to completion of our performance obligation. Investment and Savings Products Marketing and Distribution Services. We receive commissions and fees from mutual fund companies and annuity providers for the marketing and distribution by our licensed sales representatives of investment and savings products underwritten by such companies and providers. We recognize the sales-based marketing and distribution revenue received from such companies and providers at the point in time our performance obligation to them is satisfied, which is the trade date. The sales-based commissions from mutual fund companies and annuity providers are known and are due at the same time our performance obligation to such mutual fund companies and annuity providers is satisfied. We also receive ongoing asset-based commissions from mutual fund companies and annuity providers each reporting period based on client asset values. We do not recognize revenue for asset-based marketing and distribution commissions until the end of each subsequent reporting period when the amount becomes known and due from mutual fund companies or annuity providers as this revenue represents variable consideration that is fully constrained at the point in time our distinct performance obligation to mutual fund companies and annuity providers is satisfied. We consider variable consideration in the form of asset-based marketing and distribution commissions to be fully constrained as the amounts we will be entitled to collect are highly uncertain and susceptible to factors outside of our control. Such factors include the market values of assets under management and the length of time investors hold their accounts. Asset-based marketing and distribution commissions recognized during the current period are almost exclusively attributable to distinct performance obligations satisfied to mutual fund companies and annuity providers in previous periods. The adoption of ASU 2014-09 did not result in any changes in the timing or measurement of revenue recognition for marketing and distribution services of investment and savings products. Investment Advisory and Administrative Services. We provide investment advisory and administrative services over time to investors in the managed investments programs we offer. We recognize revenue as our performance obligation is satisfied over time for daily investment advisory and administrative services that are substantially the same and have the same pattern of delivery. Fees for these services, which are based on a percentage of client assets in managed investment programs, become known and are charged to investors during the same reporting period in which the daily investment advisory and administrative services are performed. The adoption of ASU 2014-09 did not result in any changes in the timing or measurement of revenue recognition for investment advisory and administrative services. Account-based Services. We provide distinct transfer agent recordkeeping services for certain mutual funds we distribute and non-bank custodial services to investors purchasing investment products we distribute through qualified retirement accounts in the United States. Fees charged for these account-based services consist primarily of a stated fee for each investment position or each qualified retirement account. Generally, our performance obligation for each account-based service arrangement is satisfied over time and is substantially the same with the same pattern of delivery. We recognize revenue to which we are entitled for each investment position or each qualified account over time based on the time-based pro-rata amount earned each reporting period. The adoption of ASU 2014-09 did not result in any changes in the timing or measurement of revenue recognition for account-based services. Distribution of Other Third-party Financial Products. We distribute various other financial products on behalf of third parties to consumers. We receive upfront commissions and/or renewal commissions from product providers for sales of other financial product sales we have arranged. We recognize revenue at the point in time our performance obligation to product providers is satisfied, which is generally on the date the financial product is purchased by the consumer from the product provider. For certain financial products, most notably prepaid legal subscriptions and auto and homeowners’ insurance referrals, we receive ongoing renewal commissions that coincide with recurring payments received by product providers from active subscribers or policyholders. Ongoing renewal commissions represent variable consideration that will not be resolved until after the reporting period in which our performance obligation has been satisfied. We estimate variable consideration in the transaction price for these financial products (with the exception of miscellaneous products for which we expect nominal ongoing commissions) as the expected amount of commissions to be received over the life of the subscription or referred policy and apply a constraint so that it is probable that a subsequent change in estimate will not result in a significant revenue reversal. Management judgement primarily is required to determine the average life of a subscription or referred policy, which we establish based on historical information. We recognize variable consideration in excess of the amount constrained in subsequent reporting periods when the uncertainty is resolved and the excess amounts are due from the product providers. Prior to the adoption of ASU 2014-09, we recognized revenue for ongoing renewal commissions associated with other third-party financial products upon receipt of the commission revenue from the product providers, which is the point in time when the amount became fixed and determinable. Revenue for Other Services. We recognize revenue from the sale of other miscellaneous products and services, including monthly subscription fees from our sales representatives for access to POL, upon the transfer of the promised product or service. For POL subscriptions, we satisfy our performance obligation by providing subscribers access to the promised services over time during each monthly subscription period. Revenue recognized from the sale of other miscellaneous products and services becomes known and charged at the same time we satisfy the corresponding performance obligation. The adoption of ASU 2014-09 did not result in any changes in the timing or measurement of revenue recognition for revenue for other services. Contract Balances. For revenue associated with ongoing renewal commissions on other distributed financial products, we record a contract asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the sale or referral, less amounts that are constrained. The contract asset is reduced for commissions that are billed and become due receivables from product providers during the reporting period. Activity in the contract asset account was as follows:
|  | Three months ended June 30, 2018 |  |  | Six months ended June 30, 2018 |
|  | (In thousands) |
Balance, beginning of period |  | $ | 48,413 |  |  | $ | 48,533 |
Current period sales, net of collection of renewal commissions |  |  | (245 | ) |  |  | (365 | )
Balance, at the end of period |  | $ | 48,168 |  |  | $ | 48,168 |
No significant estimate adjustments were made to the contract asset and no impairment losses were recognized on the contract asset during the three and six months ended June 30, 2018. Incremental costs to obtain or fulfill contracts, most notably sales commissions to our sales representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no assets recognized for incremental costs to obtain or fulfill contracts.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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