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Business Segments (Tables)
 9 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]  
Schedule of Analysis of Adjustments for Difference in Interim Medicare Part D Results for Segment Purposes and GAAP for Medicare Part D
An analysis of the adjustments for the difference in the interim results as presented for segment purposes and GAAP for Medicare Part D is as follows:
 
Nine Months Ended 
 September 30,
 
2015
 
2014
Benefit costs deferred
$
11,649

 
$
45,382

Government risk-sharing premium adjustment
9,322

 
(28,532
)
Pre-tax addition to segment interim period income
$
20,971

 
$
16,850

After tax amount
$
13,631

 
$
10,952
Reconciliation of Health Premium Included in the Segment Analysis with Health Premium
A reconciliation of health premium included in the segment analysis with health premium as reported in the Condensed Consolidated Statements of Operations is presented in the following table.
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
% Change
Premium per segment analysis:
 
 
 
 
 
Medicare Part D premium
$
232,102

 
$
258,243

 
(10
)
Other health premium
690,221

 
644,758

 
7

Part D risk-sharing adjustment
(9,322
)
 
28,532

 
(133
)
Health premium per Condensed Consolidated Statements of Operations
$
913,001

 
$
931,533

 
(2
)
Reconciliation of Segment Operating Information to Consolidated Statement of Operations
The following tables set forth a reconciliation of Torchmark’s revenues and operations by segment to its pretax income and each significant line item in its Condensed Consolidated Statements of Operations.
 
Reconciliation of Segment Operating Information to the Consolidated Statement of Operations
 
For the Nine Months Ended September 30, 2015
 
Life

Health

Medicare
Part D

Annuity

Investment

Other &
Corporate

Adjustments

  

Consolidated
Revenue:

















Premium
$
1,552,309


$
690,221


$
232,102


$
119








$
(9,322
)

(1)

$
2,465,429

Net investment income












$
579,632










579,632

Other income















$
2,201


(149
)

(3)

2,052

    Total revenue
1,552,309


690,221


232,102


119


579,632


2,201


(9,471
)

  

3,047,113

Expenses:
























Policy benefits
1,029,261


448,539


192,634


29,447








11,649


(1)

1,711,530

Required interest on reserves
(412,264
)

(51,450
)




(40,084
)

503,798










—

Required interest on DAC
129,339


17,058


673


885


(147,955
)









—

Amortization of acquisition costs
265,641


61,858


2,649


6,542













336,690

Commissions and premium tax
115,452


60,820


16,258


32








(149
)

(3)

192,413

Insurance administrative expense (2)















142,829







142,829

Parent expense















6,662







6,662

Stock compensation expense















21,877







21,877

Interest expense












57,420










57,420

Total expenses
1,127,429


536,825


212,214


(3,178
)

413,263


171,368


11,500


  

2,469,421

Subtotal
424,880


153,396


19,888


3,297


166,369


(169,167
)

(20,971
)



577,692

Nonoperating items


















20,971


(1)

20,971

Measure of segment profitability (pretax)
$
424,880


$
153,396


$
19,888


$
3,297


$
166,369


$
(169,167
)

$
—


  

598,663

Deduct applicable income taxes

   

(196,005
)
Segment profits after tax

   

402,658

Add back income taxes applicable to segment profitability

   

196,005

Add (deduct) realized investment gains (losses)

   

7,872

Deduct Part D adjustment (1)

   

(20,971
)
Pretax income per Consolidated Statements of Operations

   

$
585,564


(1) Medicare Part D items adjusted to GAAP from the segment analysis, which matches expected benefits with policy premium.
(2) Administrative expense is not allocated to insurance segments.
(3) Elimination of intersegment commission.

Reconciliation of Segment Operating Information to the Condensed Consolidated Statement of Operations *
 
For the Nine Months Ended September 30, 2014
 
Life

Health

Medicare
Part D

Annuity

Investment

Other &
Corporate

Adjustments

 

Consolidated
Revenue:

















Premium
$
1,472,734


$
644,758


$
258,243


$
334








$
28,532


(1)

$
2,404,601

Net investment income












$
567,569










567,569

Other income















$
1,990


(178
)

(3)

1,812

    Total revenue
1,472,734


644,758


258,243


334


567,569


1,990


28,354


  

2,973,982

Expenses:
























Policy benefits
964,305


414,607


213,184


31,599








53,561


(1,5)

1,677,256

Required interest on reserves
(395,595
)

(48,018
)




(41,576
)

485,189










—

Required interest on DAC
125,758


16,823


534


1,120


(144,235
)









—

Amortization of acquisition costs
251,954


53,088


2,127


5,959













313,128

Commissions and premium tax
105,724


59,787


19,664


37








(178
)

(3)

185,034

Insurance administrative
expense (2)















134,918


2,337


(4)

137,255

Parent expense















6,284







6,284

Stock compensation expense















25,219







25,219

Interest expense












57,119










57,119

    Total expenses
1,052,146


496,287


235,509


(2,861
)

398,073


166,421


55,720


  

2,401,295

Subtotal
420,588


148,471


22,734


3,195


169,496


(164,431
)

(27,366
)



572,687

Nonoperating items


















27,366


(1,4,5)

27,366

Measure of segment profitability (pretax)
$
420,588


$
148,471


$
22,734


$
3,195


$
169,496


$
(164,431
)

$
—


  

600,053

Deduct applicable income taxes

  

(196,288
)
Segment profits after tax

  

403,765

Add back income taxes applicable to segment profitability

  

196,288

Add (deduct) realized investment gains (losses)

  

15,713

Deduct Part D adjustment (1)

  

(16,850
)
Deduct legal settlement expense (4)

  

(2,337
)
Deduct administrative settlements (5)



(8,179
)
Pretax income per Consolidated Statements of Operations

  

$
588,400


(1) Medicare Part D items adjusted to GAAP from the segment analysis, which matches expected benefits with policy premium.
(2) Administrative expense is not allocated to insurance segments.
(3) Elimination of intersegment commission.
(4) Legal settlement expenses.
(5) Administrative settlements.
* Retrospectively adjusted to give effect to the adoption ASU 2014-01 as described in Note G- Adoption of New Accounting Standards.
Analysis of Profitability By Segment
The following table summarizes the measures of segment profitability for comparison. It also reconciles segment profits to net income.
Analysis of Profitability by Segment
 
Nine Months Ended September 30,
 
Increase
(Decrease)
 
2015
 
2014*
 
Amount
 
%
Life
$
424,880


$
420,588


$
4,292


1

Health
153,396


148,471


4,925


3

Medicare Part D
19,888


22,734


(2,846
)

(13
)
Annuity
3,297


3,195


102


3

Investment
166,369


169,496


(3,127
)

(2
)
Other and corporate:








Other income
2,201


1,990


211


11

Administrative expense
(142,829
)

(134,918
)

(7,911
)

6

Corporate
(28,539
)

(31,503
)

2,964


(9
)
Pretax total
598,663


600,053


(1,390
)

—

Applicable taxes
(196,005
)

(196,288
)

283


—

Total
402,658


403,765


(1,107
)

—

Reconciling items, net of tax:








Realized gains (losses) - Investments
5,117


10,213


(5,096
)

(50
)
Part D adjustment
(13,631
)

(10,952
)

(2,679
)

24

Administrative settlements
—


(5,316
)

5,316


(100
)
Legal settlement expense
—


(1,519
)

1,519


(100
)
Net income
$
394,144


$
396,191


$
(2,047
)

(1
)
 
* Retrospectively adjusted to give effect to the adoption of ASU 2014-01 as described in Note G-Adoption of New Accounting Standards.