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Business Segments (Tables)
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
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 pre-tax income and each significant line item in its Condensed Consolidated Statements of Operations.
During the third quarter of 2018, Torchmark recorded $3.6 million in administrative settlements related to state regulatory examinations.

Reconciliation of Segment Operating Information to the Condensed Consolidated Statement of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
Life
 
Health
 
Annuity
 
Investment
 
Corporate & Other
 
Adjustments
 
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
605,547

 
$
255,201

 
$
2

 
 
 
 
 
 
 
 
$
860,750

Net investment income
 
 
 
 
 
 
$
221,627

 
 
 
 
 
 
221,627

Other income
 
 
 
 
 
 
 
 
$
416

 
$
(23
)
 
(2)
393

    Total revenue
605,547

 
255,201

 
2

 
221,627

 
416

 
(23
)
 
 
1,082,770

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
396,701

 
162,574

 
8,581

 
 
 
 
 


 

567,856

Required interest on reserves
(160,058
)
 
(20,965
)
 
(11,831
)
 
192,854

 
 
 
 
 
 
—

Required interest on DAC
48,907

 
6,136

 
145

 
(55,188
)
 
 
 
 
 
 
—

Amortization of acquisition costs
103,792

 
25,162

 
538

 
 
 
 
 
 
 
 
129,492

Commissions, premium taxes, and non-deferred acquisition costs
47,609

 
22,041

 
5

 
 
 
 
 
(23
)
 
(2)
69,632

Insurance administrative expense(1)
 
 
 
 
 
 
 
 
55,812

 
3,590

 
(3)
59,402

Parent expense
 
 
 
 
 
 
 
 
2,667

 
1,578

 
(4)
4,245

Stock-based compensation expense
 
 
 
 
 
 
 
 
10,412

 
 
 
 
10,412

Interest expense
 
 
 
 
 
 
22,433

 
 
 
 
 
 
22,433

Total expenses
436,951

 
194,948

 
(2,562
)
 
160,099

 
68,891

 
5,145

 
 
863,472

Subtotal
168,596

 
60,253

 
2,564

 
61,528

 
(68,475
)
 
(5,168
)
 
 
219,298

Non-operating items
 
 
 
 
 
 
 
 
 
 
5,168

 
(3,4)
5,168

Measure of segment profitability (pretax)
$
168,596

 
$
60,253

 
$
2,564

 
$
61,528

 
$
(68,475
)
 
$
—

 
 
224,466

Deduct applicable income taxes
 
 
(41,744
)
Net operating income
 
 
182,722

Add back income taxes applicable to segment profitability
 
 
41,744

Add (deduct) realized investment gains (losses)
 
   
1,032

Add (deduct) administrative settlements
 
 
(3,590
)
Add (deduct) non-operating costs
 
 
(1,578
)
Income before income taxes per Condensed Consolidated Statement of Operations
 
   
$
220,330


(1)
Administrative expense is not allocated to insurance segments.
(2)
Elimination of intersegment commission.
(3)
Administrative settlements.
(4)
Non-operating costs.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
Life
 
Health
 
Annuity
 
Investment
 
Corporate & Other
 
Adjustments
 
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
576,223

 
$
242,991

 
$
3

 
 
 
 
 
 
 
 
$
819,217

Net investment income
 
 
 
 
 
 
$
213,872

 
 
 
 
 
 
213,872

Other income
 
 
 
 
 
 
 
 
$
361

 
$
(30
)
 
(2)
331

Total revenue
576,223

 
242,991

 
3


213,872

 
361

 
(30
)
 
 
1,033,420

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
386,445

 
155,774

 
9,000

 
 
 
 
 


 

551,219

Required interest on reserves
(152,862
)
 
(19,617
)
 
(12,433
)
 
184,912

 
 
 
 
 
 
—

Required interest on DAC
46,893

 
5,881

 
172

 
(52,946
)
 
 
 
 
 
 
—

Amortization of acquisition costs
98,268

 
23,458

 
608

 
 
 
 
 
 
 
 
122,334

Commissions, premium taxes, and non-deferred acquisition costs
44,748

 
21,746

 
7

 
 
 
 
 
1,362

 
(2,3)
67,863

Insurance administrative expense(1)
 
 
 
 
 
 
 
 
52,426

 


 
 
52,426

Parent expense
 
 
 
 
 
 
 
 
2,330

 
 
 
 
2,330

Stock-based compensation expense
 
 
 
 
 
 
 
 
8,263

 
 
 
 
8,263

Interest expense
 
 
 
 
 
 
20,970

 
 
 
 
 
 
20,970

Total expenses
423,492

 
187,242

 
(2,646
)
 
152,936

 
63,019

 
1,362

 
 
825,405

Subtotal
152,731

 
55,749

 
2,649

 
60,936

 
(62,658
)
 
(1,392
)
 
 
208,015

Non-operating items
 
 
 
 
 
 
 
 
 
 
1,392

 
(3)
1,392

Measure of segment profitability (pretax)
$
152,731

 
$
55,749

 
$
2,649

 
$
60,936

 
$
(62,658
)
 
$
—

 
 
209,407

Deduct applicable income taxes
 
 
(63,342
)
Net operating income
 
 
146,065

Add back income taxes applicable to segment profitability
 
 
63,342

Add (deduct) realized investment gains (losses)
 
   
12,595

Add (deduct) guaranty fund assessments
 
 
(1,392
)
Income before income taxes per Condensed Consolidated Statement of Operations
 
   
$
220,610


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












 
Nine Months Ended September 30, 2018
 
Life
 
Health
 
Annuity
 
Investment
 
Corporate & Other
 
Adjustments
 
  
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
1,806,384

 
$
758,439

 
$
12

 

 

 


 

$
2,564,835

Net investment income

 

 

 
$
658,279

 

 


 

658,279

Other income

 

 

 

 
$
1,180

 
$
(76
)
 
(2)
1,104

Total revenue
1,806,384

 
758,439

 
12

 
658,279

 
1,180

 
(76
)
 

3,224,218

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
1,196,616

 
483,654

 
25,852

 

 

 


 

1,706,122

Required interest on reserves
(474,373
)
 
(62,095
)
 
(35,733
)
 
572,201

 

 

 

—

Required interest on DAC
145,126

 
18,228

 
448

 
(163,802
)
 

 

 

—

Amortization of acquisition costs
312,168

 
74,311

 
1,710

 

 

 

 

388,189

Commissions, premium taxes, and non-deferred acquisition costs
142,253

 
66,502

 
19

 


 


 
(76
)
 
(2)
208,698

Insurance administrative expense(1)


 


 


 


 
166,560

 
3,590

 
(3)
170,150

Parent expense


 


 


 


 
7,806

 
1,578

 
(4)
9,384

Stock-based compensation expense


 


 


 


 
29,969

 


 

29,969

Interest expense


 


 


 
66,466

 


 


 

66,466

Total expenses
1,321,790

 
580,600

 
(7,704
)
 
474,865

 
204,335

 
5,092

 
 
2,578,978

Subtotal
484,594

 
177,839

 
7,716

 
183,414

 
(203,155
)
 
(5,168
)
 
 
645,240

Non-operating items
 
 
 
 
 
 
 
 
 
 
5,168

 
(3,4)
5,168

Measure of segment profitability (pretax)
$
484,594

 
$
177,839

 
$
7,716

 
$
183,414

 
$
(203,155
)
 
$
—

 
 
650,408

Deduct applicable income taxes
 
 
(120,456
)
Net operating income
 
 
529,952

Add back income taxes applicable to segment profitability
 
 
120,456

Add (deduct) realized investment gains (losses)
 
   
14,796

Add (deduct) administrative settlements
 
 
(3,590
)
Add (deduct) non-operating costs
 
 
(1,578
)
Income before income taxes per Condensed Consolidated Statements of Operations
 
   
$
660,036


(1)
Administrative expense is not allocated to insurance segments.
(2)
Elimination of intersegment commission.
(3)
Administrative settlements.
(4)
Non-operating costs.







 
Nine Months Ended September 30, 2017
 
Life
 
Health
 
Annuity
 
Investment
 
Corporate & Other
 
Adjustments
 
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium
$
1,725,896

 
$
730,557

 
$
9

 
 
 
 
 
 
 

$
2,456,462

Net investment income


 


 


 
$
634,930

 
 
 
 
 

634,930

Other income


 


 


 


 
$
1,239

 
$
(99
)
 
(2)
1,140

Total revenue
1,725,896

 
730,557

 
9

 
634,930

 
1,239

 
(99
)
 
 
3,092,532

Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy benefits
1,166,289

 
470,104

 
26,923

 


 


 
2,094

 
(3)
1,665,410

Required interest on reserves
(452,339
)
 
(57,859
)
 
(37,245
)
 
547,443

 


 


 

—

Required interest on DAC
139,042

 
17,530

 
524

 
(157,096
)
 


 


 

—

Amortization of acquisition costs
296,646

 
71,801

 
1,916

 


 


 


 

370,363

Commissions, premium taxes, and non-deferred acquisition costs
132,094

 
64,599

 
25

 


 


 
1,293

 
(2,4)
198,011

Insurance administrative expense(1)


 


 


 


 
155,751

 


 

155,751

Parent expense


 


 


 


 
7,228

 


 

7,228

Stock-based compensation expense


 


 


 


 
24,809

 


 

24,809

Interest expense


 


 


 
62,825

 


 


 

62,825

Total expenses
1,281,732

 
566,175

 
(7,857
)

453,172

 
187,788

 
3,387

 
 
2,484,397

Subtotal
444,164

 
164,382

 
7,866

 
181,758

 
(186,549
)
 
(3,486
)
 
 
608,135

Non-operating items
 
 
 
 
 
 
 
 
 
 
3,486

 
(3,4)
3,486

Measure of segment profitability (pretax)
$
444,164

 
$
164,382

 
$
7,866

 
$
181,758

 
$
(186,549
)
 
$
—

 
 
611,621

Deduct applicable income taxes
 
 
(184,703
)
Net operating income
 
 
426,918

Add back income taxes applicable to segment profitability
 
 
184,703

Add (deduct) realized investment gains (losses)
 
  
6,142

Add (deduct) administrative settlements
 
 
(2,094
)
Add (deduct) guaranty fund assessments
 
 
(1,392
)
Income before income taxes per Condensed Consolidated Statements of Operations
 
  
$
614,277


(1)
Administrative expense is not allocated to insurance segments.
(2)
Elimination of intersegment commission.
(3)
Administrative settlements.
(4)
Guaranty fund assessments.