FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File Number 1-8052
TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 63-0780404
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
2001 3rd Avenue South, Birmingham, Alabama 35233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 325-4200
NONE
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports re-
quired to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No____
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT OCTOBER 31, 1993
Common Stock, $1.00 Par Value 72,414,730
Index of Exhibits (Page 12)
Total number of pages included are 13.
<PAGE>
TORCHMARK CORPORATION
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheet 3
Consolidated Statement of Operations 4
Consolidated Statement of Cash Flow 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
TORCHMARK CORPORATION
CONSOLIDATED BALANCE SHEET
(Amounts in thousands)
March 31, December 31
----------- -----------
1994 1993
Assets ----------- -----------
- ------
Investments:
Fixed maturities, available for sale, at fair
value (amortized cost: 1994 - $4,502,956
1993 - $4,387,026) $4,464,061 $4,579,034
Equity securities, at market
(cost: 1994 - $33,395; 1993 - $31,221) 43,537 40,961
Mortgage loans, at cost (estimated market
value: 1994 - $3,610; 1993 - $4,024) 3,716 4,147
Investment real estate, at depreciated cost 112,382 110,730
Policy loans 150,980 149,890
Energy investments 339,796 345,805
Other long-term investments (at market value) 36,515 26,989
Short-term investments 152,899 183,166
----------- ----------
Total investments 5,303,886 5,440,722
Cash 18,410 53,408
Investment in unconsolidated subsidiaries 81,183 79,319
Accrued investment income 59,213 56,801
Other receivables 176,331 152,910
Deferred acquisition costs 926,948 901,565
Value of insurance purchased 128,260 131,602
Property and equipment 90,984 80,511
Goodwill 177,045 178,645
Other assets 32,192 26,432
Separate account assets 592,234 544,327
----------- ----------
Total assets $7,586,686 $7,646,242
=========== ==========
Liabilities and Shareholders' Equity
- ------------------------------------
Liabilities:
Future policy benefits $3,794,359 $3,745,416
Unearned and advance premiums 95,297 96,206
Policy claims and other benefits payable 151,018 159,451
Other policyholders' funds 4,401 4,313
----------- ----------
Total policy liabilities 4,045,075 4,005,386
Accrued income taxes 359,781 413,072
Short-term debt 136,900 107,108
Long-term debt (estimated market value:
1994 - $817,426; 1993 - $857,715) 797,276 792,335
Other liabilities 351,939 366,759
Separate account liabilities 592,234 544,327
----------- ----------
Total liabilities 6,283,205 6,228,987
Shareholders' equity:
Preferred stock 0 1,000
Common stock 73,784 73,784
Additional paid-in capital 138,726 232,432
Unrealized investment gains, net of tax 155 120,138
Retained earnings 1,136,223 1,082,031
Treasury stock, at cost (45,407) (92,130)
----------- ----------
Total shareholders' equity 1,303,481 1,417,255
----------- ----------
Total liabilities and shareholders' equity $7,586,686 $7,646,242
=========== ==========
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
TORCHMARK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
Three months ended
March 31,
--------------------
1994 1993
--------- ---------
Revenues:
Life premium $143,964 $137,426
Health premium 200,434 205,499
Other premium 3,750 28,515
--------- ---------
Total premium 348,148 371,440
Financial services revenue 36,544 34,008
Net investment income 83,801 96,643
Energy revenues 17,303 21,414
Realized investment gains 12,595 1,070
Other income 290 696
--------- ---------
Total revenue 498,681 525,271
Benefits and expenses:
Life policy benefits 98,980 91,798
Health policy benefits 122,933 125,582
Other policy benefits 10,569 23,520
--------- ---------
Total policy benefits 232,482 240,900
Amortization of deferred
acquisition costs 49,822 46,655
Commissions and premium taxes 35,879 41,736
Financial services expense 11,340 12,552
Energy operations expense 1,790 7,462
Other operating expense 39,441 46,838
Nonoperating expenses 0 34,500
Interest expense 17,997 13,586
--------- ---------
Total benefits and expenses 388,751 444,229
--------- ---------
Pre-tax operating income 109,930 81,042
Income tax (36,223) (26,719)
Equity in earnings of
unconsolidated subsidiaries 1,865 255
Minority interest in earnings
of consolidated subsidiaries 0 (3,533)
--------- ---------
Income before cumulative effect of
changes in accounting principles 75,572 51,045
Cumulative effect of changes in
accounting principles 0 22,444
--------- ---------
Net income $75,572 $73,489
========= =========
Net income per share before cumulative effect
of changes in accounting principles $1.03 $0.68
Cumulative effect of changes in accounting principles 0.31
--------- ---------
Net income per share $1.03 $0.99
========= =========
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
TORCHMARK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
(Amounts in thousands)
Three Months Ended
March 31,
---------------------
1994 1993
-------- ---------
Cash provided from operations $67,073 $142,451
Cash provided from (used for) investment activities:
Investments sold or matured:
Fixed maturities available for sale - sold 242,085 51,141
Fixed maturities available for sale - matured 317,229 57,557
Fixed maturities held to maturity - sold 0 5,018
Fixed maturities held to maturity - matured 0 134,397
Other long-term investments 24,974 4,480
--------- ---------
Total investments sold or matured 584,288 252,593
Investments acquired:
Fixed maturities - available for sale (637,610) (90,450)
Fixed maturities - held to maturity 0 (217,957)
Other long-term investments (39,749) (12,597)
--------- ---------
Total investments acquired (677,359) (321,004)
Net decrease (increase) in short-term investments 30,267 24,249
Repayments of loans to affiliates 0 159
Disposition of properties 940 52
Additions to properties (14,643) (10,312)
Additions to properties held for resale (4,651) 0
--------- ---------
Cash provided from (used for) investment activities (81,158) (54,263)
Cash provided from (used for) financing activities:
Issuance of common stock 290 4,344
Other borrowings 34,650 15,000
Repayments of debt (53) (116,767)
Acquisition of treasury stock (48,467) 0
Cash dividends paid to shareholders (21,764) (22,395)
Net receipts from deposit product operations 14,431 24,909
--------- ---------
Cash provided from (used for) financing activities (20,913) (94,909)
Net increase (decrease) in cash (34,998) (6,721)
Cash at beginning of year 53,408 18,706
--------- ---------
Cash balance at end of period $18,410 $11,985
========= =========
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
TORCHMARK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
NOTE A - Accounting Policies
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q, and, therefore,
do not include all disclosures required by generally accepted accounting
principles. However, in the opinion of management, these statements
include all adjustments, consisting of normal recurring accruals, which are
necessary for a fair presentation of the consolidated financial position at
March 31, 1994 and the consolidated results of operations for the periods
ended March 31, 1994 and 1993.
NOTE B - Acquisition of Preferred Stock
On March 31, 1994, Torchmark acquired the remaining outstanding shares
of its adjustable rate preferred stock at a price of $100 per share plus
accrued dividends. The acquisition was completed at an aggregate price of
$47 million. The preferred treasury stock was immediately retired.
NOTE C - Registration of Securities
In January 1994, Torchmark and Torchmark Capital, L.L.C., a subsidiary
of Torchmark, filed with the Securities and Exchange Commission a Form S-3
registering up to $200 million in securities in the form of Torchmark
preferred stock or depository shares, or Torchmark Capital preferred
securities together with Torchmark backup undertakings (including a
guarantee) or some combination thereof. The net proceeds from the sale of
Torchmark's securities will be used for general corporate purposes, which
may include repayment of bank debt, additional capitalization of insurance
subsidiaries, the purchase of shares of Torchmark's common stock, and
possible acquisitions. Net proceeds from the sale of Torchmark Capital's
securities would be lent to Torchmark with the proceeds of the loan used
for the above-described purposes.
<PAGE>
Item 2. Management's Discussion of Financial Condition and Operating
Results
Operating Results
Net income per share for Torchmark Corporation ("Torchmark") was $1.03
for the first quarter of 1994, rising 4% over per-share earnings for the
same quarter of 1993 of $.99. Net income was $75.6 million in first
quarter 1994, gaining 3% over the prior period. After exclusion of
realized investment gains in both periods, net of taxes and related items,
per share earnings were $.98 in both quarters. Consideration should be
given to the increase in Federal income taxes imposed in the third quarter
of 1993 which caused corporate income tax rates to rise from 34% to 35%.
Had this tax legislation been in effect in the first quarter of 1993,
adjusted per-share earnings would have risen $.01 in 1994 over the prior
period.
When comparing Torchmark's prior year results, consideration should
also be given to the disposition of approximately 73% of Vesta Insurance
Group ("Vesta") in the fourth quarter of 1993. Vesta was a wholly-owned
subsidiary of Torchmark prior to the disposition. Vesta's operations were
fully consolidated with Torchmark's prior to the disposition, but
Torchmark's remaining 27% of Vesta operations were reported on the equity
method after such time. Also, in comparing year over year results of
operations, three other unusual items should be noted. Operations in 1993
included a $34.5 million pretax charge, or $22.8 million after-tax, for
nonoperating expense consisting of directors and officers liability, legal
and litigation costs, and guaranty fund assessments. Results for 1993 also
included an increase in after-tax earnings of $22.4 million for the
adoption of two required accounting standards involving income taxes and
post-retirement health benefits. A final item was Torchmark's acquisition
in the fourth quarter of 1993 of the remaining shares of United Investors
Management Company ("UIMCO") which it did not own, representing
approximately 17% of that company. Minority interests in the earnings of
UIMCO, which amounted to $3.5 million in the 1993 quarter, were not
deducted after the acquisition date.
Torchmark's revenues declined 5%, from $525 million to $499 million.
After exclusion of Vesta's revenues in 1993, revenues rose slightly from
$498 million to $499 million. Adjusting for Vesta's operations, premium
rose from $346 million to $348 million and net investment income declined
from $95 million to $84 million. The decline in net investment income
resulted from lower returns on energy investments, a significant increase
in tax-exempt securities, which have lower pretax yields, and lower yields
on invested assets. On a tax-equivalent basis, net investment income was
$90 million in the 1994 quarter, down 7% from $97 million.
Again excluding Vesta's operations, Torchmark's operating expenses
declined $5.3 million from $44.8 million to $39.4 million, or 12%. This
decline is attributable to lower legal-related expenses in the 1994
quarter. Interest expense grew 32% to $18 million in the 1994 quarter,
resulting from the issuance of two new debt offerings totalling $300
million principal amount in the second and third quarters of 1993.
Life insurance. Life insurance premium income grew 5% to $144 million
in the 1994 first quarter. Annualized life premium in force also rose 5%
over the prior year and stood at $622 million at March 31, 1994. Sales of
life insurance as measured by annualized premium issued grew 9% to $34
million. Benefits as a percentage of premium increased from 67% in 1993 to
69% in 1994, primarily as a result of increased mortality on direct
response business. Acquisition expense as a percentage of premium was
stable at 15% in both periods, after a $5.8 million adjustment to deferred
acquisition expense in 1994 in recognition of realized investment gains
related to interest-sensitive life insurance products. Life insurance in
force was $62.5 billion at March 31, 1994, an increase of 6% over the prior
year.
Health insurance. Torchmark's health insurance premium income
declined 2% to $200 million for the 1994 quarter. Annualized health
insurance premium in force declined to $813 million at March 31, 1994, or
3% compared to the same date in 1993. Medicare Supplement annualized
premium, which represented over 73% of total annualized health premium at
March 31, 1994, increased from $594 million to $596 million over the same
period. The decline in annualized health premium in force was experienced
in under-age-65 health insurance. While Medicare Supplement premium in
force grew over the past year, sales of Medicare Supplement products as
measured by annualized premium issued declined from $41 million in the 1993
quarter to $27 million in 1994. The decline in sales is thought to be a
result of the confusion surrounding the Administration's and other health
reform proposals as well as increased sales competition.
Annuities. Policy charges for annuities were $2.6 million in the 1994
quarter compared to $2.1 million for the 1993 quarter, an increase of 23%.
These charges are assessed against annuity account balances periodically
for insurance risk, sales and administration expenses, and surrender
charges. Annuities are sold on both a fixed and variable basis. The
combined annuity deposit account balance at March 31, 1994 was $1.36
billion, growing 25% for the period. Fixed annuities grew 2.2% to $781
million while variable annuities rose 77% to $576 million. Annuity
collections were $52 million in the 1994 period, rising 10% over
collections of $47 million in the 1993 period.
Investment. As mentioned above, after adjusting for Vesta's
operations, Torchmark's investment income declined $11 million or 12% from
the 1993 quarter due to an increase in holdings of tax-exempt securities,
lower yields on the investment portfolio, and lower returns from energy
investments, which accounted for $9.8 million of the decrease. Average
invested assets rose 7.6% to $5.2 billion in the 1994 quarter, however.
The relative attractiveness of tax-exempt securities improved in 1994
because of the increase in corporate tax rates. Torchmark's holdings in
tax-exempt securities represented 13% of total investments at March 31,
1994, compared to 11% at year end and 2% a year earlier. While pretax
returns on tax-exempt securities are lower than on taxable securities, net
after-tax returns on securities are higher.
The rise in rates experienced during the first quarter of 1994 allowed
Torchmark to invest new funds in slightly higher yielding investments than
in the quarter a year earlier. Torchmark's insurance companies made
permanent acquisitions at an average tax-equivalent yield of 6.9% in the
quarter compared to 6.5% in the 1993 quarter. However, the increase in
rates also caused the market value of Torchmark's fixed-maturity
investments to decline during the 1994 period resulting in a $135 million
writedown of shareholder's equity, net of related taxes and deferred
acquisition costs. At March 31, 1994, the book value of Torchmark's fixed
maturities was $4.5 billion compared to $4.4 billion at year-end 1993. At
March 31, 1994, book value exceeded market by $39 million. The estimated
average life of the investment portfolio was extended to obtain higher
yields and was also extended because of the assumed reduction in expected
prepayments of mortgage-backed holdings. At quarter end, the average life
of Torchmark's insurance company investment portfolios was 7.6 years,
compared with 6.0 years at year-end 1993 and 5.3 years a year ago.
Financial Services. Revenues for financial services grew 7.5% to
$36.5 million in the first quarter of 1994 over the prior-year quarter.
Asset management fee growth was primarily responsible for this increase,
rising 19% for the period to $17.7 million. Average assets under
management gained over 16% in the 1994 period versus the 1993 period.
Assets under management were $14.3 billion at March 31, 1994, $14.5 billion
at year-end 1993, and $12.6 billion at March 31, 1993. While these assets
rose in each quarter of 1993 over the previous quarter, they declined in
the first quarter of 1994 compared to year-end 1993 primarily because of
higher interest rates experienced during this period which caused lower
security values. Investment product sales increased over 16% to $345
million in the 1994 first quarter. United Fund sales rose 7% to $260
million, Waddell & Reed Fund sales rose 97% to $33 million, and variable
annuity sales increased 46% to $51 million. Financial services margins
improved in the 1994 period over the prior-year period. Financial services
direct expenses declined 10% over the prior-year period to $11.3 million,
and general and administrative expenses decreased as a percentage of
revenues from 15.7% in 1993 to 14.9% in 1994. A major reason for the
direct expense improvement was the implementation in late 1993 of a 12b-1
service fee by the United Funds which is used to offset Waddell & Reed's
direct expenses.
Energy. Energy operations revenues were $17.3 million in the first
quarter of 1994, declining 19% from the 1993 period. The decline in these
revenues was caused by the reduction in property revenues resulting from
the disposition of $84 million in producing properties in the fourth
quarter of 1993. Revenues from product marketing operations more than
tripled in the 1994 quarter, rising to $8.1 million. Profit margins for
energy operations improved in 1994, largely because of the elimination of
expenses related to the previously-mentioned disposed property. Pretax
operating income for energy operations grew from $3.4 million for the 1993
quarter to $5.3 million for the 1994 quarter.
Financial Condition
Liquidity. Torchmark has strong liquidity, which is provided by a
positive cash flow, marketable investments, and the availability of a line
of credit facility. Torchmark's cash inflows from operations, after
deduction of current operating requirements, and including net cash inflows
from deposit product operations were $67 million in the first quarter of
1994 compared to $142 million in the same quarter of 1993. In addition,
Torchmark received $317 million in fixed-maturity repayments during the
1994 period which were either scheduled maturities or unscheduled GNMA
principal repayments. Excess cash flow from operations and investment
sales is generally reinvested.
At March 31, 1994, Torchmark had $171 million in cash and short-term
investments, compared to $237 million at the end of the previous year.
These assets represented 2.3% of Torchmark's total assets at the March,
1994 quarter end. In addition, Torchmark's entire portfolio of
fixed-income and equity securities, with $4.5 billion market value on March
31, 1994, are available for sale should a need arise.
Torchmark's line of credit facility provides credit up to a maximum
amount of $250 million. Terms of the facility permit borrowing up to the
maximum amount at variable interest rates. Torchmark is subject to certain
covenants regarding capitalization and earnings, with which Torchmark was
in full compliance at March 31, 1994. At that date, Torchmark had
outstanding $130 million on the facility.
Capital resources. On March 31, 1994, Torchmark acquired the
remaining shares outstanding of its adjustable-rate preferred stock at a
price of $100 per share plus accrued dividends. The acquisition was
completed at an aggregate price of $47 million. Also during the first
quarter of 1994, Torchmark acquired 35,200 shares of its common stock on
the open market at a cost of $1.5 million. Torchmark may repurchase shares
of its common stock from time to time at favorable prices.
In January, 1994, Torchmark and Torchmark Capital, L.L.C., a limited
liability company subsidiary of Torchmark, filed with the Securities and
Exchange Commission a shelf registration statement on Form S-3 registering
up to $200 million in securities in the form of Torchmark preferred stock
or depository shares, or Torchmark Capital preferred securities together
with Torchmark backup undertakings (including a guarantee) or some
combination thereof. The net proceeds from the sale of Torchmark's
securities will be used for general corporate purposes, which may include
repayment of bank debt, additional capitalization of insurance
subsidiaries, the purchase of shares of Torchmark's common stock, and
possible acquisitions. Net proceeds from the sale of Torchmark Capital's
securities would be lent to Torchmark with the proceeds of the loan used
for the above-described purposes.
Torchmark's shareholders' equity was $1.3 billion at March 31, 1994,
decreasing $114 million or 8% since 1993 year end. The decline in equity
was a result of the change in market value of Torchmark's fixed investments
caused by the increase in interest rates during the quarter. This change
was $135 million, net of the related taxes and additional deferred
acquistion costs. Shareholders' equity grew 11% since March 31, 1993, even
with the inclusion of the fixed investment markdown. Book value per share
was $17.89 at March 31, 1994, compared to $18.80 at December 31, 1993 and
$15.34 at March 31, 1993. Torchmark's debt as a percentage of total
capitalization was 42% at March 31, 1994, compared to 39% at year-end 1993.
The 3% increase in the debt to capitalization ratio resulted primarily from
the decline in equity but also from a slight increase on the line of
credit. Annualized return on common equity was 23.7% for the 1994 quarter
compared to 26.7% for the same period of 1993.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in the Form 10-K for the fiscal year ended
December 31, 1993, litigation was filed in May 1992 against Liberty
National Life Insurance Company ("Liberty National") in the Circuit Court
for Barbour County, Alabama (Robertson v. Liberty National Life Insurance
Company, Case No.: CV-92-021). This suit was amended in October 1992 to
include claims on behalf of a class of Liberty National policyholders
alleging fraud in the exchange of certain cancer insurance policies. It
seeks substantial equitable and injunctive relief and unspecified
compensatory and punitive damages. A policyholder class was certified by
the Barbour County Court in March 1993. Additionally, subsequent to the
class certification, a number of separate lawsuits based on substantially
the same allegations as in Robertson were filed by plaintiffs in Alabama,
Georgia, Florida and Mississippi. Four additional class action suits also
based upon substantially the same allegations as in Robertson were filed in
Mobile County, Alabama (Adair v. Liberty National Life Insurance Company,
Case No.: 93-958 and Lamey v. Liberty National Life Insurance Company, Case
No.: CV 93-1256) and in Polk County, Florida (Howell v. Liberty National
Life Insurance Company, Case No.: GC-G 93-2023 and Scott v. Liberty
National Life Insurance Company, Case No.: GC-G 93-2415) after the class
certification.
The Robertson litigation was tentatively settled pending a fairness
determination by the Court after a hearing which was held on January 20,
1994. Class members were mailed notice of the hearing and the proposed
settlement.
On February 4, 1994, the Circuit Court for Barbour County, Alabama
ruled that with a $16 million increase in the value of the proposed
Robertson settlement from approximately $39 million to $55 million, the
settlement would be fair and would be approved, provided that the parties
to the litigation accepted the amended settlement within fourteen days of
the issuance of the ruling. On February 17, 1994, the Court extended for
two weeks the period for filing objections to or accepting the court's
order conditionally approving the class action settlement. On February 22,
1994, the Court entered an order in the Robertson litigation, which delayed
any final decision on the proposed class action settlement and various
motions to modify it (including motions to delete Torchmark from the
settlement release), pending certain specified discovery to be completed
within 90 days from the date the order was entered. In the order, the
Court directed limited additional discovery regarding whether Torchmark had
any active involvement in the cancer policy exchanges. Pending completion
of limited additional discovery, the Court reserved jurisdiction and
extended the deadline for acceptance or rejection of the modifications set
forth in the February 4, 1994 order. On May 6, 1994, the Court entered an
order in the Robertson litigation setting a hearing on May 19, 1994 on all
outstanding motions in that case.
Following pertinent orders of the Barbour County Circuit Court,
Torchmark provided for the $55 million proposed amended settlement charge
in its 1993 financial reports, although Liberty National and class counsel
have not yet agreed to the February 4 modifications. Moreover, even if the
settlement is finally approved, Torchmark believes that it is highly likely
that intervenors will pursue an appeal of the ruling to the Supreme Court
of Alabama. In the event a settlement is not agreed to and approved, the
Robertson case will be aggressively defended.
On March 17, 1994, litigation was filed against Liberty National, a
subsidiary of Torchmark, certain officers and present and former directors
of Torchmark, and KPMG Peat Marwick, independent public accountants of
Torchmark and its subsidiaries, in the Circuit Court for Marion County,
Alabama (Miles v. Liberty National Life Insurance Company, Civil Action No.
CV-94-67). The lawsuit asserts that it is brought on behalf of a class
composed of the shareholders of Torchmark. The complaint alleges a failure
to timely and adequately report alledgedly material contingent liabilities
arising out of insurance policy litigation involving Liberty National.
Compensatory and punitive damages in an unspecified amount are sought.
In April 1994, the complaint in Miles was amended to add an additional
shareholder plaintiff and to name Torchmark as a defendant. No class has
currently been certified. Torchmark, Liberty National and the individual
defendants intend to vigorously defend this action.
Item 5. Other Information
Torchmark, its insurance subsidiaries Globe Life And Accident
Insurance Company and United American Insurance Company, and certain
Torchmark officers have been named as defendants in a suit filed on April
22, 1994 as a purported class action in the District Court of Oklahoma
County, Oklahoma (Moore v. Torchmark, Case No. CJ 94-2784-65). The suit
claims damages on behalf of individual health policyholders who are alleged
to have been induced to terminate such policies and to purchase Medicare
Supplement and/or other insurance coverages. The complaint seeks actual
and punitive damages for each class member in excess of $10,000.00. No
class has been certified and no proceedings of any materiality have
occurred in the case. The defendants deny any wrongdoing and intend to
vigorously defend the action.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Computation of earnings per common share.
(b) Reports on Form 8-K.
A Form 8-K dated March 25, 1994 reporting the filing of the Miles
v. Liberty National Life Insurance Company litigation was submitted
during the first quarter of 1994. No financial statements were
required to be attached to that Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
TORCHMARK CORPORATION
Date: 5/12/94 /s/ R. K. Richey
___________________________________
R. K. Richey, Chairman and Chief
Executive Officer
Date: 5/12/94 /s/ William T. Graves
___________________________________
William T. Graves, Executive
Vice President (Principal Accounting
Officer)
Exhibit 11. Statement re computation of per share earnings.
TORCHMARK CORPORATION
COMPUTATION OF EARNINGS PER SHARE
Three months ended March 31,
1994 1993
------------- -------------
Net income $75,571,884 $73,488,803
Preferred dividends (804,130) (822,186)
------------- -------------
Net income available to common $74,767,754 $72,666,617
============= =============
Weighted average shares and common
stock equivalents outstanding 72,891,220 73,560,440
============= =============
Primary earnings per share:
Net income $1.03 $0.99
============= =============
