8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 27, 2016

TORCHMARK CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	001-08052	63-0780404
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer ID No.)

3700 South Stonebridge Drive, McKinney, Texas 75070

(Address of principal executive offices)

Registrant’s telephone number, including area code: (972) 569-4000

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

On July 27, 2016, Torchmark Corporation issued a press release announcing its second quarter 2016 financial results. A copy of the press release is incorporated herein by reference and is provided as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this report (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be set forth by specific reference in such filing.

Item 9.01Financial Statement and Exhibits.

(a) Financial Statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

(c) Shell company transactions.

Not applicable.

(d) Exhibits.

(99.1) Torchmark Corporation Press Release dated July 27, 2016.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TORCHMARK CORPORATION
Date: July 27, 2016
	/s/ Carol A. McCoy
	Carol A. McCoy, Vice President, Associate Counsel and Corporate Secretary

EX-99

News Release

Contact: Mike Majors 972-569-3239 • 3700 S. Stonebridge Drive McKinney, Texas 75070 • NYSE Symbol: TMK

TORCHMARK CORPORATION REPORTS

Second Quarter2016 Results

McKinney, TX, 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.

1

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			% Chg.	2016			2015			% Chg.
Insurance underwriting income(1)	$	1.22		$	1.16		5	$	150.2		$	147.4		2
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 tax	—			(0.04		)		(0.4		)	(5.1		)
Net operating income from continuing operations	$	1.11		$	1.03		8	$	136.7		$	130.8		4
Net operating income from discontinued operations	0.02			0.02				2.1			2.6
Net operating income from all operations	$	1.13		$	1.05			$	138.7		$	133.5
Reconciliation to net income (GAAP):
Reconciling items, net of tax:
Realized gains (losses) on investments—continuing operations	0.02			0.01				2.6			1.7
Part D adjustments- discontinued operations(2)	(0.02		)	(0.06		)		(2.9		)	(8.0		)
Net income(3)	$	1.13		$	1.00			$	138.4		$	127.1
Weighted average diluted shares outstanding (000)	122,748			127,440

(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.

2

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 gains on fixed maturities)	14.6		%	14.7		%
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

3

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 Ended			% of Premium	Quarter Ended			% of Premium	% Chg.
	June 30, 2016				June 30, 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 income	$	150.2			$	147.4			2
Per share	$	1.22			$	1.16			5

4

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 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’saverage 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 Expenseswere $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.

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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	%

6

Fixed maturities at amortized cost by asset class as of June 30, 2016 are as follows:

	Fixed Maturities (dollars in millions) (unaudited)
	Investment Grade		Below Investment Grade		Total
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:

7

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 YEAR ENDING 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 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 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 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.”

For additional information 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

8

APPENDIX

TORCHMARK CORPORATION

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in millions except per share data)

	Three Months Ended   June 30,						Six Months Ended   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 acquisition costs	63			59			124			116
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, net of tax	(1		)	(5		)	(10		)	(15		)
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.

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