Discontinued Operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

At December 31, 2015, Torchmark met the criteria to account for its Medicare Part D business as a discontinued operation and expects the business to be sold during 2016. Historically, the business was a reportable segment. However, Torchmark no longer emphasizes its Medicare Part D business due to declining margins, increased risks, higher drug costs, and increased administrative and compliance costs. Management believes this sale will allow the Company to better focus on its core protection life and health insurance businesses as well as provide additional capital to invest.

The net assets held for sale at March 31, 2016 and December 31, 2015 were as follows:

	March 31, 2016			December 31, 2015
Assets:
Due premiums	$	5,084		$	8,041
Other receivables(1)	265,818			287,765
Deferred acquisition costs	16,864			17,037
Total assets held for sale	287,766			312,843
Liabilities:
Unearned and advance premiums	3,559			806
Policy claims and other benefits payable	11,010			12,309
Risk sharing payable	26,754			23,837
Current and deferred income taxes payable	8,466			13,604
Other	(229		)	479
Total liabilities held for sale	49,560			51,035
Net assets	$	238,206		$	261,808

(1) At March 31, 2016, receivables included $195 million from Centers for Medicare and Medicaid Services (CMS) and $71 million from drug manufacturer rebates. At December 31, 2015, the comparable amounts were $193 million and $95 million, respectively.

Income from discontinued operations for the three months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31,
	2016			2015
Revenue:
Health premium	$	54,699		$	88,092
Benefits and expenses:
Health policyholder benefits	61,481			94,122
Amortization of deferred acquisition costs	1,008			603
Commissions, premium taxes, and non-deferred acquisition expenses	5,109			6,163
Other operating expense	1,780			1,249
Total benefits and expenses	69,378			102,137
Income (loss) before income taxes for discontinued operations	(14,679		)	(14,045		)
Income taxes	5,138			4,915
Income (loss) from discontinued operations	$	(9,541	)	$	(9,130	)

Operating cash flows of the discontinued operations for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended March 31,
	2016		2015
Net cash provided from (used for) discontinued operations	$	14,061	$	(37,955	)