XML 65 R41.htm IDEA: XBRL DOCUMENT v3.3.1.900
Business Segments (Tables)
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Schedule of Segment Premium Revenue by Each Marketing Group
The tables below present segment premium revenue by each of Torchmark’s marketing groups.
 
Torchmark Corporation
Premium Income by Distribution Channel
 
 
For the Year 2015
 
Life
 
Health
 
Annuity
 
Total
Distribution Channel
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
United American Independent
$
15,036


1

$
345,330


37

$
135

 
100
 
$
360,501

 
12
Liberty National Exclusive
271,113


13

209,150


23


 

 
480,263

 
16
American Income Exclusive
830,903


40

80,339


9


 

 
911,242

 
30
Family Heritage Exclusive
2,334


—

221,091


24


 

 
223,425

 
8
Globe Life Direct Response
746,693


36

69,610


7


 

 
816,303

 
27
Other
206,986


10






 

 
206,986

 
7
 
$
2,073,065

 
100
 
$
925,520

 
100
 
$
135

 
100
 
$
2,998,720

 
100
 
For the Year 2014
 
Life
 
Health
 
Annuity
 
Total
Distribution Channel
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
United American Independent
$
16,582


1

$
305,368


35

$
400


100
 
$
322,350

 
11
Liberty National Exclusive
272,265


14

222,017


25




 
494,282

 
18
American Income Exclusive
766,458


39

78,722


9




 
845,180

 
30
Family Heritage Exclusive
1,595


—

204,667


24




 
206,262

 
7
Globe Life Direct Response
702,023


36

58,666


7




 
760,689

 
27
Other
207,377


10








 
207,377

 
7
 
$
1,966,300

 
100
 
$
869,440

 
100
 
$
400

 
100
 
$
2,836,140

 
100

 
For the Year 2013
 
Life
 
Health
 
Annuity
 
Total
Distribution Channel
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
 
Amount
 
% of
Total
United American Independent
$
19,742

 
1
 
$
298,298

 
35
 
$
532

 
100
 
$
318,572

 
11
Liberty National Exclusive
275,980

 
15
 
241,264

 
28
 
 
 
 
 
517,244

 
19
American Income Exclusive
715,366

 
38
 
79,435

 
9
 
 
 
 
 
794,801

 
29
Family Heritage Exclusive
1,006

 
—
 
190,923

 
22
 
 
 
 
 
191,929

 
7
Globe Life Direct Response
663,544

 
35
 
53,898

 
6
 
 
 
 
 
717,442

 
26
Other
209,694

 
11
 
 
 
 
 
 
 
 
 
209,694

 
8
 
$
1,885,332

 
100
 
$
863,818

 
100
 
$
532

 
100
 
$
2,749,682

 
100
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 major income statement line items. See Note 1—Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
 
For the year 2015
 
Life
 
Health
 
Annuity
 
Investment
 
Other
 
Corporate
 
Adjustments
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
2,073,065

 
$
925,520

 
$
135

 
 
 
 
 
 
 
 
 
 
$
2,998,720

Net investment income
 
 
 
 
 
 
$
773,951

 
 
 
 
 
 
 
 
773,951

Other income
 
 
 
 
 
 
 
 
$
2,379

 
 
 
$
(194
)
(2) 
 
2,185

    Total revenue
2,073,065

 
925,520

 
135

 
773,951

 
2,379

 
 
 
(194
)
 
 
3,774,856

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
1,374,608

 
602,610

 
38,994

 
 
 
 
 
 
 
 
 
 
2,016,212

Required interest on:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Policy reserves
(552,298
)
 
(69,057
)
 
(53,295
)
 
674,650

 
 
 
 
 
 
 
 
—

  Deferred acquisition costs
172,947

 
22,760

 
1,138

 
(196,845
)
 
 
 
 
 
 
 
 
—

Amortization of acquisition costs
353,595

 
83,341

 
8,689

 
 
 
 
 
 
 
 
 
 
445,625

Commissions, premium taxes, and non-deferred acquisition costs
154,811

 
81,489

 
41

 
 
 
 
 
 
 
1,200

(2,3) 
 
237,541

Insurance administrative expense (1)
 
 
 
 
 
 
 
 
186,191

 
 
 
 
 
 
186,191

Parent expense
 
 
 
 
 
 
 
 
 
 
$
9,003

 
 
 
 
9,003

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
 
28,664

 
 
 
 
28,664

Interest expense
 
 
 
 
 
 
76,642

 
 
 
 
 
 
 
 
76,642

    Total expenses
1,503,663

 
721,143

 
(4,433
)
 
554,447

 
186,191

 
37,667

 
1,200

 
 
2,999,878

Subtotal
569,402

 
204,377

 
4,568

 
219,504

 
(183,812
)
 
(37,667
)
 
(1,394
)
 
 
774,978

   Non-operating items
 
 
 
 
 
 
 
 
 
 
 
 
1,394

(3) 
 
1,394

    Measure of segment profitability (pretax)
$
569,402

 
$
204,377

 
$
4,568

 
$
219,504

 
$
(183,812
)
 
$
(37,667
)
 
$
—

 
 
776,372

Deduct applicable income taxes
 
 
(253,459
)
    Segment profits after tax
 
 
522,913

Add back income taxes applicable to segment profitability
 
 
253,459

Add (deduct) realized investment gains (losses) and impairments
 
 
(8,791
)
Deduct administrative settlements (3)
 
 
(1,394
)
    Pretax income per Consolidated Statement of Operations
 
 
$
766,187

(1) Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.
(3) Administrative settlements.


 
For the year 2014
 
Life
 
Health
 
Annuity
 
Investment
 
Other
 
Corporate
 
Adjustments
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
1,966,300

 
$
869,440

 
$
400

 
 
 
 
 
 
 
 
 
 
$
2,836,140

Net investment income (5)
 
 
 
 
 
 
$
758,286

 
 
 
 
 
 
 
 
758,286

Other income
 
 
 
 
 
 
 
 
$
2,354

 
 
 
$
(233
)
(2) 
 
2,121

    Total revenue
1,966,300

 
869,440

 
400

 
758,286

 
2,354

 
 
 
(233
)
 
 
3,596,547

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
1,293,384

 
559,817

 
42,005

 
 
 
 
 
 
 
8,178

(4) 
 
1,903,384

Required interest on:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Policy reserves
(530,192
)
 
(64,401
)
 
(55,255
)
 
649,848

 
 
 
 
 
 
 
 
—

  Deferred acquisition costs
168,100

 
22,499

 
1,453

 
(192,052
)
 
 
 
 
 
 
 
 
—

Amortization of acquisition costs
335,345

 
72,731

 
7,838

 
 
 
 
 
 
 
 
 
 
415,914

Commissions, premium taxes, and non-deferred acquisition costs
143,174

 
79,475

 
47

 
 
 
 
 
 
 
(233
)
(2) 
 
222,463

Insurance administrative expense (1)
 
 
 
 
 
 
 
 
174,832

 
 
 
2,422

(3) 
 
177,254

Parent expense
 
 
 
 
 
 
 
 
 
 
$
8,159

 
(85
)
(3) 
 
8,074

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
 
32,203

 
 
 
 
32,203

Interest expense
 
 
 
 
 
 
76,126

 
 
 
 
 
 
 
 
76,126

    Total expenses
1,409,811

 
670,121

 
(3,912
)
 
533,922

 
174,832

 
40,362

 
10,282

 
 
2,835,418

Subtotal
556,489

 
199,319

 
4,312

 
224,364

 
(172,478
)
 
(40,362
)
 
(10,515
)
 
 
761,129

   Non-operating items
 
 
 
 
 
 
 
 
 
 
 
 
10,515

(3,4)  
 
10,515

    Measure of segment profitability (pretax)
$
556,489

 
$
199,319

 
$
4,312

 
$
224,364

 
$
(172,478
)
 
$
(40,362
)
 
$
—

 
 
771,644

Deduct applicable income taxes
 
 
(252,041
)
    Segment profits after tax
 
 
519,603

Add back income taxes applicable to segment profitability
 
 
252,041

Add (deduct) realized investment gains (losses) and impairments
 
 
23,548

Deduct legal settlement expenses (3)
 
 
(2,337
)
Deduct administrative settlements (4)
 
 
(8,178
)
    Pretax income per Consolidated Statement of Operations
 
 
$
784,677


(1) Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.
(3) Legal settlement expenses.
(4) Administrative settlements.
(5) Retrospectively adjusted to give effect to the adoption of ASU 2014-01 as described in Note 1—Significant Accounting Policies.




 
For the Year 2013
 
Life
 
Health
 
Annuity
 
Investment
 
Other
 
Corporate
 
Adjustments
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
1,885,332

 
$
863,818

 
$
532

 
 
 
 
 
 
 
 
 
 
$
2,749,682

Net investment income (6)
 
 
 
 
 
 
$
734,650

 
 
 
 
 
 
 
 
734,650

Other income
 
 
 
 
 
 
 
 
$
2,208

 
 
 
$
(277
)
(2) 
 
1,931

    Total revenue
1,885,332

 
863,818

 
532

 
734,650

 
2,208

 
 
 
(277
)
 
 
3,486,263

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
1,227,857

 
558,982

 
43,302

 
 
 
 
 
 
 
8,625

(4) 
 
1,838,766

Required interest on:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Policy reserves
(508,236
)
 
(59,858
)
 
(57,294
)
 
625,388

 
 
 
 
 
 
 
 
—

  Deferred acquisition costs
164,981

 
22,568

 
1,811

 
(189,360
)
 
 
 
 
 
 
 
 
—

Amortization of acquisition costs
323,950

 
69,724

 
8,714

 
 
 
 
 
 
 
(1,519
)
(5) 
 
400,869

Commissions, premium taxes, and non-deferred acquisition costs
131,721

 
75,895

 
60

 
 
 
 
 
 
 
(277
)
(2) 
 
207,399

Insurance administrative expense (1)
 
 
 
 
 
 
 
 
175,651

 
 
 
1,155

(3) 
 
176,806

Parent expense
 
 
 
 
 
 
 
 
 
 
$
8,495

 
500

(4) 
 
8,995

Stock-based compensation expense
 
 
 
 
 
 
 
 
 
 
25,642

 
 
 
 
25,642

Interest expense
 
 
 
 
 
 
80,461

 
 
 
 
 
 
 
 
80,461

    Total expenses
1,340,273

 
667,311

 
(3,407
)
 
516,489

 
175,651

 
34,137

 
8,484


 
2,738,938

Subtotal
545,059

 
196,507

 
3,939

 
218,161

 
(173,443
)
 
(34,137
)
 
(8,761
)
 
 
747,325

   Non-operating items
 
 
 
 
 
 
 
 
 
 
 
 
8,761

(3,4,5)  
 
8,761

    Measure of segment profitability (pretax)
$
545,059

 
$
196,507

 
$
3,939

 
$
218,161

 
$
(173,443
)
 
$
(34,137
)
 
$
—

 
 
756,086

Deduct applicable income taxes 
 
 
(246,686
)
    Segment profits after tax
 
 
509,400

Add back income taxes applicable to segment profitability
 
 
246,686

Add (deduct) realized investment gains (losses) and impairments
 
 
7,990

Deduct Guaranty Fund Assessment (3)
 
 
(1,155
)
Deduct legal settlement expenses (4)
 
 
(9,125
)
Add Family Heritage Life acquisition adjustments (5)
 
 
1,519

    Pretax income per Consolidated Statement of Operations
 
 
$
755,315


(1) Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.
(3) Guaranty Fund Assessment.
(4) Legal settlement expenses.
(5) Family Heritage Life acquisition adjustments.
(6) Retrospectively adjusted to give effect to the adoption of ASU 2014-01 as described in Note 1—Significant Accounting Policies.
Analysis of Profitability by Segment
The following table summarizes the measures of segment profitability as determined in the three preceding tables for comparison with prior periods. The table also reconciles segment profits to net income.
 
Analysis of Profitability by Segment
 
2015
 
2014
 
2013
 
2015
Change
 
%
 
2014
Change
 
%
Life insurance underwriting margin
$
569,402

 
$
556,489

 
$
545,059

 
$
12,913

 
2

 
$
11,430

 
2

Health insurance underwriting margin
204,377

 
199,319

 
196,507

 
5,058

 
3

 
2,812

 
1

Annuity underwriting margin
4,568

 
4,312

 
3,939

 
256

 
6

 
373

 
9

Excess investment income
219,504

 
224,364

 
218,161

 
(4,860
)
 
(2
)
 
6,203

 
3

Other insurance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income
2,379

 
2,354

 
2,208

 
25

 
1

 
146

 
7

Administrative expense
(186,191
)
 
(174,832
)
 
(175,651
)
 
(11,359
)
 
6

 
819

 
—

Corporate and adjustments
(37,667
)
 
(40,362
)
 
(34,137
)
 
2,695

 
(7
)
 
(6,225
)
 
18

Pre-tax total
776,372

 
771,644

 
756,086

 
4,728

 
1

 
15,558

 
2

Applicable taxes
(253,459
)
 
(252,041
)
 
(246,686
)
 
(1,418
)
 
1

 
(5,355
)
 
2

After-tax total, before discontinued operations
522,913

 
519,603

 
509,400

 
3,310

 
1

 
10,203

 
2

Discontinued operations (after tax)(1)
10,807

 
14,865

 
21,267

 
(4,058
)
 
(27
)
 
(6,402
)
 
(30
)
Total
533,720

 
534,468

 
530,667

 
(748
)
 
—

 
3,801

 
1

Realized gains (losses)—investments (after tax)
(5,714
)

15,306


3,965


(21,020
)
 
 
 
11,341

 
 
Family Heritage acquisition finalization adjustments (after tax)
—


—


522


—

 
 
 
(522
)
 
 
Legal settlement expenses (after tax)
—


(1,519
)

(5,931
)

1,519

 
 
 
4,412

 
 
Guaranty Fund assessment (after tax)
—


—


(751
)

—

 
 
 
751

 
 
Administrative settlements (after tax)
(906
)

(5,316
)

—


4,410

 
 
 
(5,316
)
 
 
Net income
$
527,100

 
$
542,939

 
$
528,472

 
$
(15,839
)
 
(3
)
 
$
14,467

 
3

(1) Income from discontinued operations (after tax) is included for purposes of reconciling to net income.
Assets by Segment
The table below reconciles segment assets to total assets as reported in the consolidated financial statements.
 
Assets by Segment
 
At December 31, 2015
 
Life
 
Health
 
Annuity
 
Investment
 
Other
 
Consolidated
Cash and invested assets
 
 
 
 
 
 
$
14,405,073

 
 
 
$
14,405,073

Accrued investment income
 
 
 
 
 
 
209,915

 
 
 
209,915

Deferred acquisition costs
$
3,098,656

 
$
502,535

 
$
15,944

 
 
 
 
 
3,617,135

Goodwill
309,609

 
131,982

 
 
 
 
 
 
 
441,591

Other assets
 
 
 
 
 
 
 
 
$
1,179,499

 
1,179,499

Total assets
$
3,408,265

 
$
634,517

 
$
15,944

 
$
14,614,988

 
$
1,179,499

 
$
19,853,213

 
At December 31, 2014
 
Life
 
Health
 
Annuity
 
Investment
 
Other
 
Consolidated
Cash and invested assets
 
 
 
 
 
 
$
15,058,996

 
 
 
$
15,058,996

Accrued investment income
 
 
 
 
 
 
204,879

 
 
 
204,879

Deferred acquisition costs
$
2,946,995

 
$
493,880

 
$
16,522

 
 
 
 
 
3,457,397

Goodwill
309,609

 
131,982

 
 
 
 
 
 
 
441,591

Other assets
 
 
 
 
 
 
 
 
$
1,109,396

 
1,109,396

Total assets
$
3,256,604

 
$
625,862

 
$
16,522

 
$
15,263,875

 
$
1,109,396

 
$
20,272,259
Other Balances by Segment
Other Balances by Segment
 
At December 31, 2015
 
Life
 
Health
 
Annuity
 
Investment
 
Consolidated
Future policy benefits
$
9,327,561

 
$
1,600,240

 
$
1,318,010

 
 
 
$
12,245,811

Unearned and advance premiums
17,381

 
49,640

 
 
 
 
 
67,021

Policy claims and other benefits payable
135,778

 
137,120

 
 
 
 
 
272,898

Debt
 
 
 
 
 
 
$
1,233,862

 
1,233,862

Total
$
9,480,720

 
$
1,787,000

 
$
1,318,010

 
$
1,233,862

 
$
13,819,592

 
At December 31, 2014
 
Life
 
Health
 
Annuity
 
Investment
 
Consolidated
Future policy benefits
$
8,900,344

 
$
1,489,963

 
$
1,360,188

 
 
 
$
11,750,495

Unearned and advance premium
17,238

 
54,465

 
 
 
 
 
71,703

Policy claims and other benefits payable
125,884

 
128,265

 
 
 
 
 
254,149

Debt
 
 
 
 
 
 
$
1,230,528

 
1,230,528

Total
$
9,043,466

 
$
1,672,693

 
$
1,360,188

 
$
1,230,528

 
$
13,306,875