On July 1, 2021, the Company acquired an 80% interest, as described in the next paragraph, in the operating subsidiaries of Etelequote Bermuda, including e-TeleQuote, a Florida corporation that is a senior health insurance distributor of Medicare-related insurance policies in all 50 states and Puerto Rico (the “Acquisition”).

The Company’s recently formed subsidiary, Primerica Health, purchased from the shareholders of Etelequote Bermuda (the “selling shareholders”) 100% of the issued and outstanding capital stock of e-TeleQuote and its subsidiaries for consideration of (i) approximately $350 million in cash, (ii) replacement of e-TeleQuote’s debt as of the closing date of $146 million with intercompany funding provided by the Parent Company, (iii) a $15 million Majority Shareholder Note and (iv) common shares of Primerica Health constituting 20% of the total issued and outstanding shares of capital stock of Primerica Health that were issued to Etelequote Bermuda’s minority shareholders, most of which include or are beneficially owned by e-TeleQuote’s management (“Noncontrolling Equity Holders”). Under the terms of the e-TeleQuote Shareholders’ Agreement, the Parent Company will purchase the remaining 20% stake over a period of up to four years through a series of call and put rights. The purchase agreement also contemplates the potential for contingent consideration (the “Earnout”) of up to $50 million to be paid by the Parent Company to the selling shareholders in the form of earnout payments of up to $25 million in each of 2022 and 2023 based on e-TeleQuote achieving a level of earnings as described in the purchase agreement. Selling shareholders who are members of e-TeleQuote’s management must be employed by e-TeleQuote on the dates the Earnout is paid to receive the payment unless terminated by the Company without cause, by the employee for good reason, or due to death or disability. We have not recognized a liability for the Earnout as its acquisition date fair value is estimated to be zero.

The following table presents the preliminary purchase price allocation recorded in the Company’s unaudited condensed consolidated balance sheets as of the acquisition date, which is subject to finalization for estimates of the assets acquired and liabilities assumed as of the acquisition date, including but not limited to tangible assets, intangible assets and tax-related items, and the related tax effects of any changes made:

	Preliminary Purchase Price Allocation
	(In thousands)
Assets:
Cash and cash equivalent	$	1,080
Accounts receivables		692
Renewal commissions receivable		199,575
Other assets		15,705
Intangible assets		162,000
Goodwill		224,180
Total assets		603,232

Liabilities:
Accounts payable and accrued expenses		8,785
Deferred tax liability		65,425
Other liabilities		10,046
Total liabilities		84,256
Net assets acquired	$	518,976

Temporary Stockholders' Equity:
Redeemable noncontrolling interests	$	8,437
Total temporary stockholders' equity	$	8,437

Intangible assets identified in the acquisition of the business are capitalized separately from goodwill if the fair value can be measured reliably on initial recognition (transaction date). The primary intangible assets identified were customer relationships with health insurance carriers of $159.0 million with an estimated useful life of 15 years. The Company will amortize the intangible assets acquired on a straight-line basis over their estimated useful lives.

Goodwill is calculated as the difference between the acquisition date fair value of the total consideration transferred and the aggregate values assigned to the assets acquired and liabilities assumed. The goodwill created in the acquisition is not deductible for tax purposes. The Company tests goodwill for impairment on an annual basis and whenever events occur or circumstances change that would indicate the carrying value of goodwill may be impaired. All of the Company’s goodwill was obtained as a result of the e-TeleQuote acquisition, which has been designated as a separate operating segment called Senior Health. Therefore, goodwill has been allocated solely to the Senior Health segment and will be evaluated for impairment at the Senior Health segment level. The Company will perform the annual goodwill impairment assessment as of July 1, 2022.

Included in Other liabilities is the portion of the fair value of the Liability-classified Equity Shares not subject to forfeiture, which was estimated to be approximately $3 million as of the July 1, 2021 acquisition date.

Transaction costs related to the e-TeleQuote acquisition included within Other operating expenses on the unaudited condensed consolidated statements of income were $10.0 million and $12.1 million, respectively, for the three and nine months ended September 30, 2021.

The following unaudited summary represents e-TeleQuote’s actual statements of income for the three and nine months of September 30, 2021:

The following unaudited pro forma consolidated financial information combines the unaudited results of the Company for the three and nine months ended September 30, 2021 and 2020 and the unaudited results of e-TeleQuote for the three and nine months ended September 30, 2021 and 2020, and assumes that the e-TeleQuote acquisition, which closed on July 1, 2021, was completed on January 1, 2020 (the first day of fiscal year 2020). The pro forma consolidated financial information has been calculated after applying adjustments for amortization expense of acquired intangible assets and the consequential tax effect. These pro forma results have been prepared for comparative purpose only and do not purport to be indicative of the operating results of the Company that would have been achieved had the e-TeleQuote acquisition actually taken place on January 1, 2020. In addition, these results are not intended to project future results and do not reflect events that may occur after September 30, 2021 including, but not limited to, revenue enhancements, cost savings or operating synergies that the Company may achieve as a result of the e-TeleQuote acquisition.

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	(in thousands)
Revenue	$	693,240	$	598,272	$	2,050,898	$	1,711,256
Net income (loss)		108,873		107,806		326,770		288,017