<PAGE>
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 June 30, 1997 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 required
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 JULY 31, 1997
Common Stock, 69,204,405
$1.00 Par Value
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 1
Consolidated Statement of Operations 2
Consolidated Statement of Cash Flow 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security
Holders 11
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)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- ------------
<S> <C> <C>
ASSETS:
Investments:
Fixed maturities, available for sale, at fair
value (amortized cost; 1997 - $5,419,871;
1996 - $5,265,499) $ 5,489,254 $5,328,276
Equity securities, at fair value
(cost: 1997 - $3,284; 1996 - $3,799) 9,916 8,858
Mortgage loans, at cost (estimated fair value;
1997 - $74,528; 1996 - $61,970) 78,322 64,353
Investment real estate, at depreciated cost 159,547 150,490
Policy loans 213,551 206,959
Other long-term investments (at fair value) 76,436 95,485
Short-term investments 161,949 85,099
----------- ----------
Total investments 6,188,975 5,939,520
Cash 6,337 18,272
Investment in unconsolidated subsidiaries 95,351 88,051
Accrued investment income 94,657 91,837
Other receivables 127,854 112,291
Deferred acquisition costs 1,315,152 1,253,727
Value of insurance purchased 229,616 244,368
Property and equipment 48,373 50,323
Goodwill 533,052 540,540
Other assets 32,972 41,846
Separate account assets 1,709,395 1,420,025
----------- ----------
Total assets $10,381,734 $9,800,800
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Future policy benefits $ 4,917,290 $4,797,738
Unearned and advance premiums 85,499 83,670
Policy claims and other benefits payable 211,714 220,121
Other policyholders' funds 81,395 80,812
----------- ----------
Total policy liabilities 5,295,898 5,182,341
Accrued income taxes 374,687 340,287
Short-term debt 79,145 40,910
Long-term debt (estimated fair value:
1997 - $812,760; 1996 - $814,082) 792,195 791,880
Other liabilities 227,548 202,869
Separate account liabilities 1,709,395 1,420,025
----------- ----------
Total liabilities 8,478,868 7,978,312
Monthly income preferred securities (estimated
fair value: 1997 - $208,000; 1996 - $210,000) 193,173 193,145
Shareholders' equity:
Preferred stock 0 0
Common stock 73,784 73,784
Additional paid-in capital 145,699 141,701
Unrealized investment gains, net of tax 53,288 46,581
Retained earnings 1,655,404 1,549,391
Treasury stock, at cost (218,482) (182,114)
----------- ----------
Total shareholders' equity 1,709,693 1,629,343
----------- ----------
Total liabilities and shareholders' equity $10,381,734 $9,800,800
=========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
1
<PAGE>
TORCHMARK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited and in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------- --------- --------------------
1997 1996 1997 1996
--------- --------- -------- ----------
<S> <C> <C> <C> <C>
Revenue:
Life premium $228,210 $214,571 $450,570 $423,878
Health premium 184,689 183,366 372,289 371,534
Other premium 6,988 5,597 12,718 10,310
--------- --------- --------- ---------
Total premium 419,887 403,534 835,577 805,722
Financial services revenue 49,915 47,157 98,278 91,494
Net investment income 106,895 100,700 210,529 200,117
Realized investment gains (losses) (22,948) 379 (33,779) 5,092
Other income 448 213 662 381
--------- --------- --------- ---------
Total revenue 554,197 551,983 1,111,267 1,102,806
Benefits and expenses:
Life policyholder benefits 149,739 141,061 294,687 277,467
Health policyholder benefits 116,129 112,464 230,830 227,985
Other policyholder benefits 13,929 12,446 27,361 24,821
--------- --------- --------- ---------
Total policyholder benefits 279,797 265,971 552,878 530,273
Amortization of deferred acquisition costs 55,128 54,277 111,651 109,734
Commissions and premium taxes 34,533 35,522 70,515 71,534
Financial services selling expense 12,157 12,960 24,484 25,246
Other operating expense 36,268 38,122 74,116 78,204
Amortization of goodwill 3,744 3,744 7,488 7,488
Interest expense 18,285 18,187 36,159 37,831
--------- --------- --------- ---------
Total benefits and expenses 439,912 428,783 877,291 860,310
Income before income taxes and
equity in earnings of unconsolidated affiliate 114,285 123,200 233,976 242,496
Income taxes (41,423) (45,431) (84,879) (89,074)
Equity in earnings of unconsolidated subsidiaries 4,202 3,660 7,684 6,700
Monthly income preferred securities dividend (2,474) (2,390) (4,863) (4,809)
--------- --------- --------- ---------
Net income $74,590 $79,039 $151,918 $155,313
========= ========= ========= =========
Net income per share $1.08 $1.10 $2.18 $2.17
========= ========= ========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
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TORCHMARK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
(Amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1997 1996
----------- ---------
<S> <C> <C>
Cash provided from operations $240,968 $183,819
Cash provided from (used for) investment activities:
Investments sold or matured:
Fixed maturities available for sale - sold 625,008 70,688
Fixed maturities available for sale - matured, called,
and repaid 211,974 189,644
Other long-term investments 61,945 17,374
----------- ---------
Total investments sold or matured 898,927 277,706
Investments acquired:
Fixed maturities (1,018,408) (364,052)
Other long-term investments (67,775) (27,988)
----------- ---------
Total investments acquired (1,086,183) (392,040)
Net decrease (increase) in short-term investments (76,850) 1,378
Proceeds from sale of discontinued energy operations 30,832 0
Payments related to sale of discontinued energy operations (14,428) 0
Dividend from discontinued affiliate 0 35,625
Disposition of properties 482 80
Additions to properties (3,823) (2,556)
----------- ---------
Cash used for investment activities (251,043) (79,807)
Cash provided from (used for) financing activities:
Issuance of common stock 12,700 2,326
Additions to debt 38,725 0
Repayments of debt 0 (115,817)
Acquisition of treasury stock (54,462) 0
Cash dividends paid to shareholders (42,702) (41,592)
Net receipts from deposit product operations 43,879 44,659
----------- ---------
Cash used for financing activities (1,860) (110,424)
Net increase (decrease) in cash (11,935) (6,412)
Cash at beginning of year 18,272 13,158
----------- ---------
Cash at end of period $6,337 $6,746
========== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
TORCHMARK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 June 30, 1997, and
the consolidated results of operations for the periods ended June 30, 1997, and
1996.
4
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Operating Results
Torchmark's net operating income from continuing operations (net income
excluding realized investment gains and losses and the associated adjustment to
deferred acquisition costs, net of tax) was $2.50 per share ($174 million) for
the first six months of 1997, compared with $2.12 per share ($152 million) for
the same period of 1996, an increase of 18%. Net income was $152 million in the
1997 period, compared with $155 million in the same period for 1996. The
decrease in net income was caused by an after-tax realized investment loss of
$22 million in the 1997 period, compared with a gain of $3 million in 1996.
The 1997 realized investment losses resulted primarily from the intentional sale
of fixed-maturity investments, and were taken to offset current and prior year
taxable gains.
Operating revenues (revenues excluding realized investment gains and losses)
rose 4% to $1.15 billion in the first six months of 1997. Total premium
increased 4% to $836 million. Life premium grew 6% to $451 million for the six
months of 1997, while health premium was flat at $372 million. Life premium
comprised 54% of total premium in the 1997 period, compared with 53% in the 1996
period and 37% five years ago. The growth in life premium relative to health
premium underscores Torchmark's increased emphasis on life products. Financial
services revenues gained 7% to $98 million, while net investment income rose 5%
to $211 million.
Operating expense declined 5% to $74 million for the 1997 six months from $78
million. As a percentage of operating revenue, operating expenses fell from
7.1% in the 1996 period to 6.5%. The major contributing factor to the decline
in these expenses was the $4 million decline in litigation expense, compared
with the prior-year period, at Torchmark's Alabama-based insurer, Liberty
National Life Insurance Company. Interest expense declined $2 million, or 4%,
because of lower average debt outstanding. A discussion of Torchmark's
operations follows under the appropriate captions.
Life insurance. Life insurance premium income rose 6% to $451 million through
the June period of 1997, from $424 million in the same six-month period a
year ago. Annualized life premium in force increased 7% over the prior year and
was $985 million at June 30, 1997, compared with $922 million a year earlier.
Annualized life insurance premium in force represented 56% of Torchmark's total
annualized premium in force at June 30, 1997, compared with 55% the same date a
year earlier. Life insurance sales, in terms of annualized premium issued,
were $117 million in the 1997 six months, rising 6% over 1996 sales of $110
million. Benefits and acquisition expenses as a percentage of premium were
stable in both periods at 82%.
5
<PAGE>
Health insurance. Torchmark's health insurance premium was level at $372
million for the 1997 six months. Annualized health insurance premium in force
rose 1% to $759 million at June 30, 1997. Medicare Supplement annualized
premium in force rose slightly to $533 million at June 30, 1997, compared with
$530 million a year earlier. The improvement in Medicare Supplement in force
premium resulted primarily from premium rate increases. Cancer annualized
premium in force grew 6% to $128 million, also as a result of premium rate
increases. Sales of health insurance, as measured by annualized premium issued,
grew 9% to $53 million. Operating margins for health insurance remained steady
in 1997 at 30%.
Annuities. Torchmark sells both fixed and variable annuities. Fixed annuity
collections were $48 million in the 1997 six months, compared with $42
million collected in the 1996 period, an increase of 14%. Collections of
variable annuities were $105 million in the 1997 period, declining 12% from
variable collections of $119 million in 1996. Fixed annuities on deposit with
Torchmark were $995 million at June 30, 1997, gaining 5% over the same date a
year ago. The variable annuity balance on deposit rose 39% during the past
twelve months, boosted in part by the strength in financial markets. This
balance was $1.7 billion at June 30, 1997, compared with $1.2 billion a year
ago. Policy charges for annuities for the 1997 six months were $12.7
million, compared with $10.3 million for the 1996 period, an increase of 23%.
Policy charges are assessed against the annuity account balance periodically for
insurance risk, sales, administration, and cash surrender. The increase in
policy charges resulted primarily from the growth in variable annuities over
the prior-year period.
Investment. Torchmark's investment income rose 5% in the first six months of
1997 to $211 million, the result of a 7% increase in mean invested assets for
the 1997 period versus the 1996 period. Invested assets at amortized cost
increased to $6.1 billion at June 30, 1997, compared with $5.7 billion at June
30, 1996.
Acquisitions continue to emphasize call-protected, medium-maturity corporate
obligations and commercial mortgage-backed securities. Acquisitions made during
the first six months of 1997 totaled $1.0 billion and had a yield of 7.34%,
compared with acquisitions of $364 million made at a yield of 7.04% for the 1996
comparable period. The increase in 1997 acquisitions over the 1996 level
resulted in large part from the reinvestment of proceeds from planned sales of
fixed income securities, which were completed in order to partially offset
current and prior-year taxable realized gains. Realized losses of $27 million
were generated in this program.
Fixed maturity investments represented 89% of total invested assets at June 30,
1997. The portfolio had a yield of 7.46%, compared with a 7.59% yield at June
30, 1996. Because of the decrease in interest rates during the period, the
fixed-income portfolio had an unrealized gain of $69 million, compared with an
unrealized gain of $63 million at year-end 1996 and a $20 million unrealized
loss at June 30, 1996.
6
<PAGE>
Financial services. Financial services revenues for the first six months of
1997 increased 7% to $98 million over the prior period. Asset management fees,
the largest component of financial services revenues, rose 11% to $56 million.
These fees are based on the amount of assets under management. Average assets
under management rose 4% in the 1997 period versus the 1996 six months. Assets
under management were $21.1 billion at June 30, 1997, $18.9 billion at year-end
1996, and $18.9 billion at June 30, 1996. Mutual fund assets under management
were $19.4 billion at June 30, 1997, compared with $17.2 billion at 1996 year
end and $16.1 billion a year ago. Growth in fee revenue was greater than the
growth in average assets due to the loss of several large accounts in 1996 with
lower than average fees.
Commission revenues from investment product sales declined 4% to $36 million in
the 1997 period from $37 million for the prior six months. Investment
product sales of $724 million in the 1997 period declined 10% compared with
$805 million in the same period of 1996. However, sales for the 1997 six months
were 5% greater than investment product sales for the last six months of 1996.
Commission revenues also gained 5% compared with the last six months of 1996.
Commissions from the sale of insurance products were $6.7 million in the 1997
six months, compared with $7.0 million in the 1996 period. Service fees
increased 16% to $15 million. The sum of all financial services revenue
components is greater than total financial services revenue because the portion
of commission related to the sale of insurance and variable annuity products of
United Investors Life Insurance Company is eliminated in consolidation. Direct
expenses for financial services declined as a percentage of revenues from 28% in
the 1996 period to 25% in the 1997 period because most of these expenses are
fixed costs. Administrative expense as a percentage of revenue also declined
1%. The financial services pretax profit margin increased from 51% in the 1996
period to 55%.
Financial Condition
Liquidity. Positive cash flow, marketable investments, and the availability of
a line of credit facility provide Torchmark with strong liquidity and financial
flexibility. Torchmark's insurance and asset-management operations typically
generate cash flows in excess of immediate requirements. Torchmark's net cash
inflows from operations were $241 million in the first six months of 1997,
compared with $184 million in the same period of 1996, a 31% increase. In
addition to cash flows from operations, Torchmark received $212 million in
investment maturities or repayments during 1997.
Torchmark's cash and short-term investments were $168 million at the end of
June, 1997, rising 63% over the $103 million of these assets at December 31,
1996. Cash and short-term investments represented 1.6% of total assets at June
30, 1997. In addition, Torchmark's entire portfolio of fixed-income and
equity securities, in the amount of $5.5 billion at market value on June 30,
7
<PAGE>
1997, is available for sale should a need arise. The $65 million increase in
cash and short-term investments was caused by the temporary build-up of cash
flow pending permanent investment. The additional cash flow resulted from the
tax-related investment sales.
Torchmark has in place a line of credit facility, which is also designed as a
backup credit line for a commercial paper program. This program provides
credit up to a maximum amount of $600 million, and permits Torchmark to borrow
from either the credit line or issue commercial paper at any time up to the
combined facility maximum of $600 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 June 30, 1997. At that date, Torchmark had
commercial paper outstanding in the amount of $79 million and no borrowings on
the line of credit. At December 31, 1996, $41 million in commercial paper was
outstanding.
Capital resources. At June 30, 1997, Torchmark's debt outstanding was $871
million, compared with $833 million at December 31, 1996 and $866 million at
June 30, 1996. Debt as a percentage of total capitalization was 32% at June 30,
1997, counting the Monthly Income Preferred Securities as equity and excluding
the effects on equity of an accounting rule requiring market revaluation of
fixed securities and an adjustment to deferred acquisition costs based on
changes in interest rates in the financial markets. The debt to capitalization
ratio was also 32% at year-end 1996 and 33% at June 30, 1996.
Torchmark's 8 5/8% Sinking Fund Debentures due 2017 are subject to a mandatory
$8 million repayment during the twelve months ending March 31, 1998. In
addition to this mandatory repayment, Torchmark may elect to repay an additional
$12 million during this same period at par value. Torchmark made both of these
repayments in the principal amount of $20 million, with accrued interest, on
July 15, 1997.
Shareholders' equity was $1.71 billion at June 30, 1997, compared with $1.63
billion at 1996 year end. Shareholders' equity was $1.56 billion one year ago.
Book value per share was $24.72 at quarter end, compared with $23.38 at year-
end 1996 and $21.78 a year earlier. Shareholders' equity is impacted by the
previously mentioned accounting rule that requires equity to be adjusted for the
fluctuations in the market values of fixed investments and deferred acquisition
costs based on changes in interest rates. After adjusting shareholders' equity
to remove the effects of interest-rate fluctuations on an after-tax basis,
shareholders' equity was $1.67 billion at June 30, 1997, compared with $1.59
billion at 1996 year end and $1.57 billion a year ago. On a per share basis,
book value was $24.12 at the end of June, 1997, compared with $22.84 at year-end
1996 and $21.92 at June 30, 1996. Growth in shareholders' equity over the prior
year was attained despite share purchases during the second half of 1996 in the
amount of $107 million, and $54 million in 1997 (all in the second quarter of
1997). During the second quarter of 1997, 947 thousand shares were acquired.
Annualized return on common equity, adjusted to exclude the effects of the
accounting rule and realized investment gains and losses, was 20.9% for the
1997 six-month period, compared with 20.1% for the same period of 1996.
8
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On June 23, 1997, Torchmark shareholders approved an increase in the number of
Torchmark authorized shares to 320 million. Accordingly, Torchmark paid a two-
for-one stock split in the form of a stock dividend on August 1, 1997. As a
result of this split, Torchmark's per share earnings and book value will be
restated in future periods. Had the split been in effect at June 30, 1997, net
operating income per share would have been $1.25 in the 1997 six months,
compared with $1.06 for the year earlier period. Book value per share would
have been $12.36 at June 30, 1997 ($12.06 excluding the effect of interest-rate
fluctuations), compared with $11.69 and $11.42, respectively, at December 31,
1996.
9
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Part II. Other Information
Item 1. Legal Proceedings.
Torchmark and its subsidiaries continue to be named as parties to pending
or threatened legal proceedings. These lawsuits involve tax matters, alleged
breaches of contract, torts, including bad faith and fraud claims based on
alleged wrongful or fraudulent acts of agents of Torchmark's insurance
subsidiaries, employment discrimination and miscellaneous other causes of
action. Many of these lawsuits involve claims for punitive damages in the state
courts of Alabama, a jurisdiction particularly recognized for its large punitive
damage verdicts. Accordingly, the likelihood or extent of a punitive damage
verdict in any given case is virtually impossible to predict. As of June 30,
1997, Liberty National Life Insurance Company ("Liberty") was a party to
approximately 204 active lawsuits (including 25 employment cases and excluding
interpleader and stayed cases), approximately 188 of which were Alabama
proceedings in which punitive damages were sought. Liberty faces trial settings
in these cases on an on-going basis. Some of such actions involving Liberty also
name Torchmark as a defendant.
It has been previously reported that Liberty is a party to individual
lawsuits and a purported class action (Carlton v. Liberty National Life
Insurance Company, Case No. CV-96-22) in the Circuit Court of Chambers County,
Alabama, in which allegations are made that an interest sensitive life insurance
policy would become paid-up or self-sustaining after a specified number of
years. Of the individual interest-sensitive cases, 53 actions were filed in
Chambers County, Alabama by a single attorney. The Carlton case was settled on
an individual basis by the parties on August 7, 1997. No class was ever
certified in Carlton. Additionally, the 53 individual interest-sensitive cases
in Chambers County have been settled in the third quarter, 1997 or are currently
in the process of being settled.
Liberty has previously reported that it is a party to Harris v. Liberty
National Life Insurance Company (CV-96-01836), a purported class action filed in
the Circuit Court of Jefferson County, Alabama in March, 1996. In Harris, the
plaintiffs allege that a class of persons were insured under Liberty cancer
policies when Liberty knew that such persons were not entitled to retain any
benefits under these policies. On March 21, 1997, a purported class action with
substantially similar allegations was filed in the Circuit Court of St. Clair
County, Alabama (Gentry v. Liberty National Life Insurance Company, CV-97-61).
The St. Clair County Circuit Court entered an order conditionally certifying a
class in Gentry on May 27, 1997. The Harris case has been stayed by the
10
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Jefferson County Circuit Court pending resolution of the Gentry proceedings. No
class has been certified in Harris.
Item 4. Submission of Matters to a Vote of Security Holders.
(1) April 24, 1997 Annual Meeting of Shareholders
Messrs. David L. Boren, Louis T. Hagopian and Harold T. McCormick were elected
at the Annual Meeting of Shareholders to terms expiring in 2000. Messrs. Joseph
M. Farley, C. B. Hudson, Joseph L. Lanier, Jr., George J. Records, R. K. Richey
and Keith A. Tucker continued as directors in their current terms after the
meeting.
Proposal 1. Election of Directors.
For Withheld
David L. Boren 56,629,888 461,874
Louis T. Hagopian 56,594,198 497,564
Harold T. McCormick 56,611,396 480,366
Proposal 2. Amendment to and Restatement of 1987 Torchmark Stock Incentive Plan
- - This proposal involved increasing the number of shares available for awards
under the existing plan by one million shares and providing that the Board, in
its discretion, could award non-employee directors non-formula based stock
options.
For Against Abstain
37,838,653 18,671,418 581,691
Proposal 3. Approval of Torchmark Corporation 1996 Non-Employee Director Stock
Option Plan and Torchmark Corporation 1996 Executive Deferred Compensation Stock
Option Plan - These are new plans which allow non-employee directors and certain
executives designated by the Compensation Committee to elect to defer all or
certain portions of their annual compensation into an interest account in these
plans and to subsequently within a limited time period, convert their interest
accounts to stock options.
For Against Abstain
49,157,534 7,270,752 663,476
11
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Proposal 4. Ratification of Torchmark Political Contributions Program - This
program allows up to .05% of the Company's pre-tax earnings per year (not to
exceed $250,000) to be set aside for disbursement over a two year election cycle
in full accordance with all election laws by management in order to support
candidates and political parties working for the preservation of the insurance
and mutual fund industries.
For Against Abstain
51,422,278 4,858,376 811,108
Proposal 5. Appointment of KPMG Peat Marwick LLP as auditors for 1997.
For Against Abstain
56,887,881 85,621 118,260
No broker non-votes on any of the foregoing proposals. Total shares voted
57,091,762 (Quorum 81.755%).
(1) June 23, 1997 Special Meeting of Shareholders
The shareholders voted to amend Torchmark's Restated Certificate of
Incorporation to increase the authorized capital of the Company to $325 million
and the authorized common stock of the Company to 320 million shares, $1.00 per
value per share.
For Against Abstain
51,614,311 233,082 124,613
No broker non-votes on this proposal. Total shares voted 51,972,006 (Quorum
74.96%).
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(11) Statement re computation of per share earnings.
(b) Reports on Form 8-K.
A Form 8-K dated April 15, 1997 was filed to report the granting of a new
trial in McQuiston v. Liberty National Life Insurance Company. No financial
statements were required to be filed.
A Form 8-K dated May 15, 1997 was filed to set out Torchmark's cautionary
statement regarding forward-looking statements as permitted by the Private
Securities Litigation Reform Act of 1995. No financial statements were required
to be filed.
12
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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: August 12, 1997 /s/ Keith A. Tucker
-----------------------------------
Keith A. Tucker, Vice Chairman
Date: August 12, 1997 /s/ Gary L. Coleman
-----------------------------------
Gary L. Coleman, Vice President and
Chief Accounting Officer
<PAGE>
Exhibit 11. Statement re computation of per share earnings.
TORCHMARK CORPORATION
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
Net income $74,590,110 $79,038,432
Preferred dividends 0 0
------------ ------------
Net income available to common shareholders $74,590,110 $79,038,432
=========== ===========
Weighted average shares and common
stock equivalents outstanding 69,344,188 71,749,366
=========== ===========
Primary earnings per share:
Net income $ 1.08 $ 1.10
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30,
1997 1996
------------ ------------
<S> <C> <C>
Net income $151,917,691 $155,312,704
Preferred dividends 0 0
------------ ------------
Net income available to common shareholders $151,917,691 $155,312,704
============ ============
Weighted average shares and common
stock equivalents outstanding 69,573,749 71,732,193
============ ============
Primary earnings per share:
Net income $ 2.18 $ 2.17
============ ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
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193,173
0
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