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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 20, 1998
(November 6, 1998)
TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8052 63-0780404
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of 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)
Index of Exhibits page 2.
Total number of pages in this report is 3.
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Item 2. Acquisition or Disposition of Assets.
On November 6, 1998, Torchmark Corporation ("TMK") disposed of the
remaining 64% interest it held in Waddell & Reed Financial, Inc. ("WDR") on a
tax-free basis in the form of a special dividend to TMK common shareholders of
record as of the close of business on October 23, 1998. TMK distributed a total
of 7,975,000 Class A common shares of WDR and 34,325,000 Class B common shares
of WDR to its common stockholders based upon the ratios of .0569 share of WDR
Class A stock for each share of TMK stock held and .2449 share of WDR Class B
stock for each share of TMK stock held. All fractional shares of WDR arising
from the Spin-off distribution were settled in cash. TMK no longer holds any
ownership interest in its former subsidiary, WDR.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Pro Forma Consolidated Condensed Financial Statements (Unaudited).
(c) Exhibits.
None.
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TORCHMARK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited pro forma condensed consolidated balance sheet as
of September 30, 1998 and the pro forma condensed consolidated income statements
for the year ended December 31, 1997 and for the nine months ended September 30,
1998 give effect to Torchmark's divestiture of Waddell & Reed. This transaction
was completed in two steps. First, approximately 36% of the Waddell & Reed
shares owned by Torchmark were sold in an initial public offering. Later, the
remaining shares were spun off to Torchmark shareholders. Waddell & Reed was
accounted for as discontinued operations in the historical financial statements
effective September 30, 1998. All prior periods have been restated to reflect
discontinued operations accounting.
These pro forma financial statements have been prepared based on estimates
and assumptions deemed appropriate to reflect these transactions as if they
occurred at times other than their actual occurrence. These statements give
effect to the spin-off of Waddell & Reed as if it occurred on September 30,
1998. There are no pro forma adjustments to the income statements because
Waddell & Reed is accounted for as a discontinued segment in the historical
financial statements. The pro forma financial statements should be read in
conjunction with the historical financial statements of Torchmark contained in
Torchmark's Form 10-K for the year ended December 31, 1997 and Form 10-Q for
the nine months ended September 30, 1998. These pro forma financial statements
do not purport to be indicative of the results which might have actually been
obtained had the transactions been completed at the beginning of the periods
presented or which may be obtained in the future.
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TORCHMARK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
At September 30, 1998
(Unaudited)
(Amounts in thousands except for per share data)
------------------------------------------------------------
Historical Pro Forma Pro Forma
Adjustments
-------------------------------------------------------
Fixed maturities............. $ 5,859,953 $ 5,859,953
Other investments............ 645,391 645,391
Deferred acquisition costs... 1,633,119 1,633,119
Other assets................. 1,027,263 ($277,828) (a) 749,435
Separate account assets...... 2,111,414 2,111,414
----------- ---------- ----------
Total assets............... $11,277,140 ($277,828) $10,999,312
=========== ========== ===========
Policy liabilities........... $ 4,890,300 $ 4,890,300
Other liabilities............ 1,452,345 1,452,345
Separate account liabilities. 2,111,414 2,111,414
----------- ---------- -----------
Total liabilities.......... 8,454,059 0 8,454,059
Minority interests in
consolidated affiliate..... 100,935 ($100,935) (a) 0
Monthly income preferred
securities ................ 193,244 193,244
Shareholders' equity......... 2,528,902 (176,893) (a) 2,352,009
----------- ---------- ----------
Total liabilities and
shareholders' equity..... $11,277,140 ($277,828) $10,999,312
=========== ========== ===========
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TORCHMARK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the nine months ended September 30, 1998
(Unaudited)
(Amounts in thousands except for per share data)
--------------------------------------------------------------
Historical Pro Forma Pro Forma
Adjustments
---------------------------------------
Premium........................... $1,310,345 $1,310,345
Net investment income............. 349,846 349,846
Realized investment gains (losses) (44,777) (44,777)
Other income...................... 1,937 1,937
---------- ----------
Total revenue................. 1,617,351 1,617,351
Policy benefits................... 864,067 864,067
Amortization of deferred
acquisition costs............... 172,337 172,337
Commissions and premium taxes..... 107,904 107,904
Other operating expense........... 89,488 89,488
Amortization of goodwill.......... 9,055 9,055
Interest expense.................. 45,791 45,791
---------- ----------
Total benefits and expenses... 1,288,642 1,288,642
---------- ----------
Pretax income..................... 328,709 328,709
Income taxes...................... (117,238) (117,238)
Equity in earnings of
unconsolidated affiliates....... (19,851) (19,851)
Monthly income preferred
securities dividend (net of tax) (7,433) (7,433)
---------- ----------
Net income from
continuing operations........... $184,187 $184,187
========== ==========
Net income from continuing
operations per share:
Basic......................... $1.31 $1.31
========== ==========
Diluted....................... $1.30 $1.30
========== ==========
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TORCHMARK CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 1997
(Unaudited)
(Amounts in thousands except for per share data)
------------------------------------------------------
Historical Pro Forma Pro Forma
(as restated) Adjustments
------------------------------------------------------
Premium...................... $ 1,678,004 $ 1,678,004
Net investment income........ 426,677 426,677
Realized investment gains
(losses)................... (36,979) (36,979)
Other income................. 962 962
----------- -----------
Total revenue.............. 2,068,664 2,068,664
=========== ===========
Policy benefits.............. 1,108,900 1,108,900
Amortization of deferred
acquisition costs.......... 224,738 224,738
Commissions and premium
taxes...................... 141,296 141,296
Other operating expense...... 117,794 117,794
Amortization of goodwill..... 12,074 12,074
Interest expense............. 71,863 71,863
----------- -----------
Total benefits and
expenses................. 1,676,665 1,676,665
----------- -----------
Pretax income................ 391,999 391,999
Income taxes................. (138,409) (138,409)
Equity in earnings of
unconsolidated affiliates.. 16,714 16,714
Monthly income preferred
securities dividend
(net of tax)............... (9,875) (9,875)
----------- -----------
Net income from continuing
operations................. $ 260,429 $ 260,429
=========== ===========
Net income from continuing
operations per share:
Basic..................... $ 1.87 $ 1.87
=========== ===========
Diluted................... $ 1.84 $ 1.84
=========== ===========
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TORCHMARK CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note a - The pro forma condensed consolidated financial statements give
effect to the spin-off of Torchmark's 64% interest in Waddell & Reed assuming
the spin-off occurred on September 30, 1998. A pro forma adjustment was made to
the condensed consolidated balance sheet to record the payment of the Waddell &
Reed shares to Torchmark shareholders.
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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 thereunto duly authorized.
TORCHMARK CORPORATION
Dated: November 20, 1998 By: /s/ Michael J. Klyce
----------------------
Name: Michael J. Klyce
Title: Vice President and Treasurer
