Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Data: A summary of preferred and common share activity is presented in the following chart.

	Preferred Stock		Common Stock
	Issued	Treasury Stock	Issued		Treasury Stock
2013:
Balance at January 1, 2013	—	—	158,718,183		(17,364,729	)
Grants of restricted stock					76,415
Forfeitures and surrenders of restricted stock					(37,359	)
Issuance of common stock due to exercise of stock options					3,917,757
Issuance of common stock due to settlement of restricted stock units					11,190
Treasury stock acquired					(11,069,076	)
Retirement of treasury stock			(7,500,000	)	7,500,000
Balance at December 31, 2013	—	—	151,218,183		(16,965,802	)
2014:
Grants of restricted stock					19,041
Forfeitures of restricted stock					(2,700	)
Issuance of common stock due to exercise of stock options					2,210,349
Treasury stock acquired					(8,548,795	)
Retirement of treasury stock			(17,000,000	)	17,000,000
Balance at December 31, 2014	—	—	134,218,183		(6,287,907	)
2015:
Grants of restricted stock					6,648
Forfeitures of restricted stock					(13,950	)
Vesting of performance shares					211,287
Issuance of common stock due to exercise of stock options					1,576,485
Treasury stock acquired					(7,340,794	)
Retirement of treasury stock			(4,000,000	)	4,000,000
Balance at December 31, 2015	—	—	130,218,183		(7,848,231	)

Acquisition of Common Shares: Torchmark shares are acquired from time to time through open market purchases under the Torchmark stock repurchase program when it is believed to be the best use of Torchmark’s excess cash flows. Share repurchases under this program were 6.3 million shares at a cost of $359 million in 2015, 7.2 million shares at a cost of $375 million in 2014, and 8.3 million shares at a cost of $360 million in 2013. When stock options are exercised, proceeds from the exercises are generally used to repurchase approximately the number of shares available with those funds in order to reduce dilution. Shares repurchased for dilution purposes were 1.0 million shares at a cost of $60 million in 2015, 1.4 million shares at a cost of $74 million in 2014, and 2.8 million shares at a cost of $122 million in 2013.

Retirement of Treasury Stock: Torchmark retired 4.0 million shares of treasury stock in 2015, 17.0 million in 2014, and 7.5 million in 2013.

Restrictions: Restrictions exist on the flow of funds to Torchmark from its insurance subsidiaries. Statutory regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus. Dividends from insurance subsidiaries of Torchmark are limited to the greater of prior year statutory net income excluding realized capital gains on an annual noncumulative basis, or 10% of prior year surplus, in the absence of special regulatory approval. Additionally, insurance company distributions are generally not permitted in excess of statutory surplus. Subsidiaries are also subject to certain minimum capital requirements. Subsidiaries of Torchmark paid cash dividends to the Parent Company in the amount of $466 million in 2015, $479 million in 2014, and $488 million in 2013. As of December 31, 2015, dividends and transfers from insurance subsidiaries to parent available to be paid in 2016 were limited to the amount of $337 million without regulatory approval, such that $916 million was considered restricted net assets of the subsidiaries. While there are no legal restrictions on the payment of dividends to shareholders from Torchmark’s retained earnings, retained earnings as of December 31, 2015 were restricted by lenders’ covenants which require the Company to maintain and not distribute $2.9 billion from its total consolidated retained earnings of $3.6 billion.

Earnings Per Share: A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:

	Year Ended December 31,
	2015	2014	2013
Basic weighted average shares outstanding	125,094,628	130,721,738	137,646,885
Weighted average dilutive options outstanding	1,662,607	1,918,506	1,916,900
Diluted weighted average shares outstanding	126,757,235	132,640,244	139,563,785

There were no anti-dilutive shares as of December 31, 2015, 2014, or 2013. Income available to common shareholders for basic earnings per share is equivalent to income available to common shareholders for diluted earnings per share.