We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Torchmark Corp | LSE:TMK | London | Ordinary Share | COM STK US$1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 17.27 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMTMK
Torchmark Corporation Reports Second Quarter 2016 Results
MCKINNEY, Texas, July 27, 2016 -- Torchmark Corporation (NYSE: TMK) reported
today that for the quarter ended June 30, 2016, net income was $1.13 per
diluted common share, compared with $1.00 per diluted common share for the
year-ago quarter. Net operating income from continuing operations for the
quarter was $1.11 per diluted common share, compared with $1.03 per diluted
common share for the year-ago quarter.
HIGHLIGHTS:
* Net income as a ROE was 11.8%. Net operating income as a ROE excluding net
unrealized gains on fixed maturities was 14.6%.
* Net life sales increased 10% at American Income over the year-ago quarter.
* At Liberty National, net life sales increased 12% and net health sales
increased 13% over the year ago quarter.
* Average agent counts increased from the first quarter of 2016 to the second
quarter of 2016 by 13% at Liberty National and Family Heritage, and 6% at
American Income.
* 1.4 million shares of common stock were repurchased during the quarter.
FINANCIAL SUMMARY
(Dollar amounts in millions, except per share data)
(unaudited)
Net operating income, a non-GAAP financial measure, has been used consistently
by Torchmark's management for many years to evaluate the operating performance
of the Company, and is a measure commonly used in the life insurance industry.
It differs from net income primarily because it excludes certain non-operating
items such as realized investment gains and losses and certain nonrecurring
items included in net income. Management believes an analysis of net operating
income is important in understanding the profitability and operating trends of
the Company's business. Net income is the most directly comparable GAAP
measure.
Per Share
Quarter Ended Quarter Ended
June 30, June 30,
2016 2015 % 2016 2015 %
Chg. Chg.
Insurance underwriting income $ 1.22 $ 1.16 5 $ 150.2 $ 147.4 2
(1)
Excess investment income(1) 0.44 0.45 (2) 54.6 56.9 (4)
Parent company expense (0.02) (0.02) (2.4) (2.3)
Income tax (0.53) (0.52) 2 (65.3) (66.0) (1)
Stock option expense, net of - (0.04) (0.4) (5.1)
tax
Net operating income from $ 1.11 $ 1.03 8 $ 136.7 $ 130.8 4
continuing operations
Net operating income from 0.02 0.02 2.1 2.6
discontinued operations
Net operating income from all $ 1.13 $ 1.05 $ 138.7 $ 133.5
operations
Reconciliation to net income
(GAAP):
Reconciling items, net of tax:
Realized gains (losses) on 0.02 0.01 2.6 1.7
investments-continuing
operations
Part D adjustments- (0.02) (0.06) (2.9) (8.0)
discontinued operations(2)
Net income(3) $ 1.13 $ 1.00 $ 138.4 $ 127.1
Weighted average diluted 122,748 127,440
shares outstanding (000)
(1) Definitions included within the document.
(2) Under GAAP, benefit costs can exceed premiums in the first part of the year
but be less than premiums during the remainder of the year. For net operating
income purposes, Torchmark defers excess benefits incurred in earlier interim
periods to later periods in order to more closely match the benefit cost with
the associated revenue.
(3) A GAAP basis condensed consolidated statement of operations is included in
the appendix of this report.
Note 1: Tables in this news release may not foot due to rounding.
FINANCIAL SUMMARY, CON'T
Management vs. GAAP measures
(Dollar amounts in millions, except per share data)
(unaudited)
Shareholders' equity, excluding AOCI(1), and book value per share, excluding
AOCI, are non-GAAP measures that are utilized by management to view the
business without the effect of unrealized gains or losses which are primarily
attributable to fluctuation in interest rates on the available for sale
portfolio. Management views the business in this manner because the Company has
the ability and generally, the intent, to hold investments to maturity and
meaningful trends can more easily be identified without the fluctuations.
Shareholders' equity and book value per share are the most directly comparable
GAAP measures.
June 30,
2016 2015
Net income as a ROE(2) 11.8 % 10.7 %
Net operating income as a ROE(2) (excluding net unrealized 14.6 % 14.7 %
gains on fixed maturities)
Shareholders' equity $ 4,878 $ 4,306
Impact of adjustment (1,072) (638)
Shareholders' equity, excluding AOCI $ 3,806 $ 3,668
Book value per share $ 39.87 $ 33.94
Impact of adjustment (8.76) (5.03)
Book value per share, excluding AOCI $ 31.11 $ 28.91
(1) AOCI is defined as accumulated other comprehensive income.
(2) Calculated using average shareholders' equity for the measurement period.
CONTINUING INSURANCE OPERATIONS - comparing the second quarter 2016 with second
quarter 2015:
Life insurance accounted for 72% of the Company's insurance underwriting margin
for the quarter and 70% of total premium revenue.
Health insurance accounted for 27% of Torchmark's insurance underwriting margin
for the quarter and 30% of total premium revenue.
Net sales of life insurance increased 2%, while net health sales increased 6%.
INSURANCE PREMIUM REVENUE
(Dollar amounts in millions, except per share data)
(unaudited)
Quarter Ended %
Chg.
June 30, 2016 June 30, 2015
Life insurance $ 548.6 $ 520.0 5
Health insurance 237.3 232.4 2
Total $ 785.9 $ 752.5 4
INSURANCE UNDERWRITING INCOME
(Dollar amounts in millions, except per share data)
(unaudited)
Insurance underwriting margin, a non-GAAP measure, is management's measure of
profitability of its life, health, and annuity segments' underwriting
performance, and consists of premiums less policy obligations, commissions and
other acquisition expenses. Insurance underwriting income is the sum of the
insurance underwriting margins of the life, health, and annuity segments, plus
other income, less insurance administrative expenses. It excludes the
investment segment, parent company expense and income taxes. Management
believes this information helps provide a better understanding of the business
and a more meaningful analysis of underwriting results by distribution channel.
Underwriting income is a component of net operating income, which is reconciled
to net income in the Financial Summary section above.
Quarter % of Quarter % of %
Ended Premium Ended Premium Chg.
June 30, June 30,
2016 2015
Insurance underwriting
margins:
Life $ 143.6 26 $ 139.4 27 3
Health 52.6 22 51.6 22 2
Annuity 1.9 1.1
198.2 192.1 3
Other income 0.4 0.7
Administrative expenses (48.4) (45.5) 6
Insurance underwriting $ 150.2 $ 147.4 2
income
Per share $ 1.22 $ 1.16 5
Insurance Results from Continuing Operations by Distribution Channel
Total premium, underwriting margins, first-year collected premium and net sales
by all distribution channels are shown at http://www.torchmarkcorp.com/ on the
Investors page at Financial Reports.
American Income Agency was Torchmark's leading contributor to total
underwriting margin ($82 million), on premium revenue of $247 million. Life
premiums of $226 million were up 9% and life insurance underwriting margin of
$72 million was up 13%. As a percentage of life premium, life underwriting
margin was 32%, up from 31% and the highest of the life distribution channels
at Torchmark. The average producing agent count during the quarter was 6,599,
approximately the same from a year ago, but up 6% from the previous quarter.
The producing agent count at the end of the second quarter was 6,773. Net life
sales(1) were $55 million, up 10%.
Globe Life Direct Response was Torchmark's second leading contributor to total
underwriting margin ($36 million), on premium revenue of $216 million. Life
premiums of $199 million were up 5% and the life underwriting margin was $33
million, down 10%. As a percentage of life premium, life underwriting margin
was 17%, down from 20%. Net life sales were $40 million, down 9% from the
year-ago quarter. Net health sales(1) increased from $0.8 million to $0.9
million.
LNL Agency was Torchmark's third leading contributor to total underwriting
margin ($31 million), on premium revenue of $118 million. Life premiums of $68
million were down 1% from the year-ago quarter and life underwriting margin was
$19 million, up 6%. As a percentage of life premium, life underwriting margin
was 28%, up from 26%. Net life sales(1) for the LNL Agency were $10 million,
up 12%.
LNL Agency was Torchmark's third leading contributor to health underwriting
margin ($12 million), on health premiums of $51 million. Health underwriting
margin as a percentage of health premium was 24%, approximately the same as the
year-ago quarter. Net health sales(1) for the LNL Agency were $5 million, up
13%.
LNL Agency's average producing agent count during the quarter was 1,739, up 12%
over a year ago, and up 13% from the previous quarter. The producing agent
count at the end of the second quarter was 1,812.
Family Heritage Agency was Torchmark's second leading contributor to health
underwriting margin ($12 million) on health premiums of $59 million. Health
underwriting margin as a percentage of health premium was 21%, up 1% from a
year ago. The average producing agent count during the quarter was 933, down 3%
from a year ago, but up 13% from the previous quarter. The producing agent
count at the end of the second quarter was 955. Net health sales(1) were $14
million, up 1% from the year ago quarter.
UA Independent Agency was Torchmark's leading contributor to health
underwriting margin ($16 million), on health premiums of $90 million. Health
underwriting margin as a percentage of premiums was 18%, down from 19%. Net
health sales(1) were $10 million, up 6%. Excluding the group business, net
health sales grew 13%.
Administrative Expenses were $48 million, up 6% from the year ago quarter due
primarily to an increase in information technology costs. The ratio of
administrative expenses to premium for continuing operations was approximately
6.2% and in line with expectations, compared to 6.0% for the year ago quarter.
(1) Net sales (health and life) is a non-GAAP measure that is calculated as the
annualized premium issued, net of cancellations in the first 30 days after
issue, except in the case of Globe Life Direct Response where net sales is
annualized premium issued at the time the first full premium is paid after any
introductory offer period has expired. Management believes net sales is a
meaningful indicator of the rate of premium growth relative to annualized
premium.
INVESTMENTS
EXCESS INVESTMENT INCOME
(Dollar amounts in millions, except per share data)
(unaudited)
Management uses excess investment income, a non-GAAP measure, as the measure to
evaluate the performance of the investment segment. It is defined as net
investment income less both the required interest attributable to net policy
liabilities and the interest on debt. We also view excess investment income per
diluted common share as an important and useful measure to evaluate performance
of the investment segment as it takes into consideration our stock repurchase
program.
Quarter Ended
June 30,
2016 2015 %
Chg.
Net investment income $ 201.6 $ 194.8 4
Required interest:
Interest on net policy liabilities(1) (123.9) (118.8) 4
Interest on debt (23.1) (19.1) 21
Total required interest (147.0) (138.0) 7
Excess investment income $ 54.6 $ 56.9 (4)
Per share $ 0.44 $ 0.45 (2)
(1) Interest on net policy liabilities is a component of total policyholder
benefits (a GAAP measure).
Net investment income increased 4%, while average invested assets increased 6%.
Required interest on net policy liabilities increased 4%, in line with the
increase for average net policy liabilities. Interest expense on debt increased
by 21%. The weighted average discount rate for the net policy liabilities was
5.6%, same as the year ago quarter.
Investment Portfolio
The composition of the investment portfolio at June 30, 2016 is as follows:
Invested Assets
(dollars in millions)
(unaudited)
$ % of Total
Fixed maturities (at amortized cost) $ 13,778 96 %
Equities - -
Investment real estate 1 -
Policy loans 502 3
Other long-term investments 57 -
Short-term investments 49 -
Total $ 14,386 100 %
Fixed maturities at amortized cost by asset class as of June 30, 2016 are as
follows:
Fixed Maturities
(dollars in millions)
(unaudited)
Investment Below Total
Grade Investment
Grade
Corporate bonds $ 10,942 $ 626 $ 11,568
Redeemable preferred stock:
U.S. 282 74 356
Foreign 55 55
Municipal 1,277 1 1,277
Government-sponsored enterprises 300 - 300
Government and agencies 102 - 102
Collateralized debt obligations - 62 62
Residential mortgage-backed securities 4 - 4
Other asset-backed securities 54 - 54
Total $ 13,015 $ 763 $ 13,778
The market value of Torchmark's fixed maturity portfolio was $15.4 billion;
$1.7 billion higher than amortized cost of $13.8 billion. The $1.7 billion of
net unrealized gains compares to $970 million at March 31, 2016. Net unrealized
gains were comprised of gross unrealized gains of $1.9 billion and gross
unrealized losses of $211 million.
Torchmark is not a party to any derivatives contracts, including credit default
swaps, and does not participate in securities lending.
At amortized cost, 94% of fixed maturities (96% at market value) were rated
"investment grade." The fixed maturity portfolio earned an annual effective
yield of 5.8% during the second quarter of 2016, the same as the year ago
quarter.
Acquisitions of fixed maturity investments during the quarter totaled $364
million at cost. Comparable information for acquisitions of fixed maturity
investments is as follows:
Quarter Ended
June 30,
2016 2015
Average annual effective yield 4.7% 4.7%
Average rating BBB+ A-
Average life (in years) to:
Next call 23.4 28.8
Maturity 23.7 30.5
SHARE REPURCHASE:
During the quarter, the Company repurchased 1.4 million shares of Torchmark
Corporation common stock at a total cost of $83 million at an average share
price of $57.77. For the six months ended June 30, 2016, the Company
repurchased 2.9 million shares at the average share price of $55.46.
LIQUIDITY/CAPITAL:
Torchmark's operations consist primarily of writing basic protection life and
supplemental health insurance policies which generate strong and stable cash
flows. Capital at the insurance companies is sufficient to support current
operations.
EARNINGS GUIDANCE FOR THE YEARING DECEMBER 31, 2016:
Torchmark projects that net operating income from continuing operations per
share will be in a range of $4.40 to $4.50 for the year ending December 31,
2016.
NON-GAAP MEASURES:
In this news release, Torchmark includes non-GAAP measures to enhance
investors' understanding of management's view of the business. The non-GAAP
measures are not a substitute for GAAP, but rather a supplement to increase
transparency by providing broader perspective. Torchmark's definitions of
non-GAAP measures may differ from other companies' definitions. More detailed
financial information including various GAAP and non-GAAP measurements are
located at http://www.torchmarkcorp.com/ on the Investors page under "Financial
Reports."
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking statements within the meaning of
the federal securities laws. These prospective statements reflect management's
current expectations, but are not guarantees of future performance.
Accordingly, please refer to Torchmark's cautionary statement regarding
forward-looking statements, and the business environment in which the Company
operates, contained in the Company's Form 10-K for the year ended December 31,
2015, and any subsequent Forms 10-Q on file with the Securities and Exchange
Commission and on the Company's website at http://www.torchmarkcorp.com/ on the
Investors page. Torchmark specifically disclaims any obligation to update or
revise any forward-looking statement because of new information, future
developments or otherwise.
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
Torchmark will provide a live audio webcast of its second quarter 2016 earnings
release conference call with financial analysts at 11:00 a.m. (Eastern)
tomorrow, July 28, 2016. Access to the live webcast and replay will be
available at http://www.torchmarkcorp.com/ on the Investors/Calls and Meetings
page, at the Conference Calls on the Web icon. Immediately following this press
release, supplemental financial reports will be available before the conference
call on the Investors page menu of the Torchmark website at "Financial
Reports."
APPENDIX
TORCHMARK CORPORATION
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in millions except per share data)
Three Months Six Months Ended
Ended June 30,
June 30,
2016(1) 2015(2) 2016(1) 2015(2)
Revenue:
Life premium $ 549 $ 520 $ 1,093 $ 1,033
Health premium 237 232 473 461
Other premium - - - -
Total premium 786 752 1,566 1,495
Net investment income 202 195 399 386
Realized investment gains 4 3 4 3
Other income - 1 1 1
Total revenue 992 951 1,970 1,885
Benefits and expenses:
Life policyholder benefits 369 347 732 687
Health policyholder benefits 153 151 306 299
Other policyholder benefits 9 10 18 20
Total policyholder benefits 531 508 1,056 1,006
Amortization of deferred acquisition costs 117 112 236 222
Commissions, premium taxes, and non-deferred 63 59 124 116
acquisition costs
Other operating expense 58 56 115 111
Interest expense 23 19 42 38
Total benefits and expenses 793 754 1,575 1,494
Income before income taxes 199 197 395 391
Income taxes (60) (64) (122) (128)
Income from continuing operations 139 133 273 263
Discontinued operations:
Income (loss) from discontinued operations, (1) (5) (10) (15)
net of tax
Net income $ 138 $ 127 $ 262 $ 249
Basic net income per share:
Continuing operations $ 1.16 $ 1.05 $ 2.26 $ 2.08
Discontinued operations (0.01) (0.04) (0.09) (0.11)
Total basic net income per common share $ 1.15 $ 1.01 $ 2.17 $ 1.97
Diluted net income per share:
Continuing operations $ 1.13 $ 1.04 $ 2.22 $ 2.06
Discontinued operations - (0.04) (0.09) (0.12)
Total diluted net income per common share $ 1.13 $ 1.00 $ 2.13 $ 1.94
Dividends declared per common share $ 0.14 $ 0.14 $ 0.28 $ 0.27
(1) Due to the adoption of ASU 2016-09, certain balances related to excess tax
benefits from stock compensation were adjusted prospectively.
(2) Certain prior year balances were adjusted to give effect to discontinued
operations.
SOURCE Torchmark Corporation
CONTACT: Mike Majors, Vice President, Investor Relations, Torchmark
Corporation, 3700 South Stonebridge Dr., P. O. Box 8080, McKinney, Texas
75070-8080, Phone: 972/569-3239, tmkir@torchmarkcorp.com, Website:
www.torchmarkcorp.com
END
(END) Dow Jones Newswires
July 28, 2016 02:00 ET (06:00 GMT)
1 Year Torchmark Corp Chart |
1 Month Torchmark Corp Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
