SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported) February 1, 1996
(February 1, 1996)
TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8052 63-0780404
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
2001 Third 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 or former address, if changed since last report)
Item 5. Other Events.
Torchmark Corporation issued a press release dated February 1,
1996, which is incorporated herein by reference and attached hereto
as an exhibit.
Item 7. Financial Statement and Exhibits.
(a) Financial Statements of businesses acquired.
Not applicable.
(b) Pro formal financial information.
Not applicable.
(c) Exhibits.
Torchmark Corporation Press Release
Dated February 1, 1996.
SIGNATURES
Pursuant to the requirements 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: February 1, 1996 /s/ R. K. Richey
R. K. Richey
Chairman and Chief Executive Officer
Lee Bartlett (205) 325-4204
TORCHMARK CORPORATION REPORTS 1995 EARNINGS
BIRMINGHAM, ALABAMA, February 1, 1996 ....Torchmark
Corporation (NYSE symbol TMK) announced today that it is
exploring a strategic restructuring that could include dividing
Torchmark into separate publicly-traded operating companies. R.
K. Richey, Chairman and CEO, said that "the current operating
environment has led us to conclude that this may be the best
way to maximize shareholder value." The investment banking
firm of Morgan Stanley has been engaged as Torchmark's financial
advisor for this purpose.
Torchmark also reported that in addition to its previously
announced plans to sell Torch Energy Advisors, it has decided
to dispose of its Black Warrior investment and to account for
both as a discontinued operation, thus modifying the
presentation of its financial results in 1995 and prior periods
to set forth separately the results attributable to the
discontinued energy segment. Black Warrior was written down in
the fourth quarter of 1995 to its estimated realizable value
concurrent with Torchmark's decision to dispose of its energy
segment. The writedown was primarily due to disappointments in
obtaining significant gas production from lower coal seams. An
after-tax charge of $130 million, or $1.82 per share for Black
Warrior is included in loss from discontinued operations.
1995's net operating income from continuing operations was
$3.93 per share, up 5% from $3.74 in 1994 (as modified to
reflect discontinued operations). The fourth quarter's net
operating income from continuing operations was $1.03 per share,
up 13% from $.91 (as modified) in 1994's comparable period.
1995's net loss from discontinued operations was $1.80 per
share, compared to $.07 of income in 1994 (as modified). The
fourth quarter's net operating loss from discontinued operations
was $1.84 per share, versus $0.02 of income (as modified) in
1994's comparable period.
1995's operating income before adjustment for discontinued
operations and the writedown of Black Warrior was $3.95 per
share, up 4% from $3.81 in 1994. The fourth quarter's operating
income per share from continued and discontinued operations was
$1.01 per share, up 9% from $.93 in the same period in 1994.
1995's net income, which includes the income or loss from
discontinued operations, realized investment losses, and the
related adjustment to deferred policy acquisition costs, was
$143 million, or $2.00 per share, versus $269 million, or $3.72
per share, last year. The fourth quarter's net loss was $56
million, or $.79 per share, compared to $64 million of income,
or $.89 per share, last year. Net of acquisition costs,
American Income's contribution to net income was $.24 per share
for 1995 and $.06 per share for the fourth quarter.
Pre-tax operating income from insurance operations (excluding
Liberty's litigation) increased 15% to $486 million, led by
American Income, Globe and United Investors:
Dollars in Millions
------------------------------------------------------------------
Excluding American Income
---------------------------------
Twelve Twelve Twelve Twelve
Months % of Months % of Months % of Months % of
1995 Premium 1994 Premium 1995 Premium 1994 Premium
-------- ------- ------- ------- -------- --------------- ------
Underwriting
Income before
administrative
expenses
Life $212.1 27.5 $166.8 27.7 $165.6 26.8 $160.2 27.6
Health 150.4 19.9 148.9 19.2 135.5 19.0 146.5 19.1
Annuity 12.5 9.4 12.5 9.4
------- ------- ------- -------
374.9 325.1 313.5 316.1
Other income 3.1 3.8 3.1 3.8
Administration
expenses
excluding
Liberty's
litigation (98.8) (6.4) (86.3) (6.2) (90.5) (6.7) (85.0) (6.2)
------- ------- ------- -------
Underwriting
income
excluding
Liberty's
litigation 279.2 242.6 226.1 234.9
Net investment
income 396.2 346.8 356.6 340.9
Required
investment
income on net
liabilities (189.8) (165.8) (176.1) (163.8)
------- ------- ------- -------
Pre-tax
operating
income from
insurance
operations
excluding
Liberty's
litigation $485.7 $423.6 $406.6 $412.0
======= ======== ======== ========
Excluding American Income, underwriting income declined due to
lower health insurance premiums ($714 million versus $767
million).
<PAGE>
The following chart illustrates Torchmark's emphasis on life
insurance, where life insurance sales were up $68 million, or
$45%, to $218 million (sales were up $24 million, or 17%,
excluding American Income) and life annualized premium in force
was up $72 million, or 9%, to $869 million:
Dollars in Millions
---------------------------------------------------
Premium Issued Premium in Force
------------------------ --------------------------
Twelve Twelve At At
Months Months % Year End Year End %
1995 1995 Change 1995 1994 Change
------- -------- ------- ------- -------- -------
Direct response $63.9 $48.3 23 $180.5 $154.1 17
American Income
Agency 51.2 7.4 592 169.6 147.0 15
United American
Agencies 26.2 11.6 125 49.8 39.1 27
Liberty National
Home Service 48.5 51.5 (6) 297.4 291.8 2
United Investors
Agency 10.6 8.7 22 78.7 73.1 8
Other 17.6 22.3 (21) 93.4 91.9 2
------- -------- -------- --------
$218.0 $149.8 45 $869.4 $797.0 9
======= ======== ======== ========
Health insurance sales were $103 million, down 15% (23%
excluding the effect of the purchase of American Income).
Medicare Supplement sales decreased 26% to $65 million. Health
insurance annualized premium in force was $755 million, down 7%
from a year ago.
Life premiums grew 28% to $772 million. Health premiums were
$755 million, down 2%. Total revenue increased 10% to $2.1
billion. Adjusting for the purchase of American Income and the
classification of the energy operations as discontinued, life
premiums were $618 million, up 7%, health premiums were $714
million, down 7%, and total revenue was flat at $1.8 billion.
Total investment income, excluding that from American Income,
was even with last year. This was due to growth in invested
assets and portfolio restructuring, offset by a decline in new
money rates.
Pre-tax litigation costs at Liberty National were $12 million,
or $.17 per share, for the year and $4 million, or $.06 per
share, in the fourth quarter. There is no discernible trend
upon which to predict future litigation amounts. Currently,
there are 170 cases (excluding stayed cancer cases) pending in
Alabama which seek punitive damages. In December, the Alabama
Supreme Court unanimously affirmed the previously reported
settlement in the Robertson cancer policy class action lawsuit.
A petition for rehearing has been filed in the case.
Noninsurance pre-tax operating income grew 12% to $91 million
due to increased investment management fees in Waddell and Reed.
For the quarter, Waddell and Reed's pre-tax operating income
increased 25% from the year-ago period to $25 million.
Investment product collections were even with last year at $1.2
billion. Fourth quarter collections were $354 million, up 20%
from the third quarter and up 39% from 1994's fourth quarter.
Total assets under management increased 26% to $18.3 billion.
Return on equity (excluding the effect of SFAS 115 and
discontinued operations) was 18.5% versus 19.7% last year.
Total assets at December 31, which includes net assets in
discontinued operations of $156 million, were $9.3 billion and
shareholders' equity was $1.6 billion. Book value per share
was $22.17 ($20.33 excluding the effect of SFAS 115).
##########
