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Torchmark Corporation Reports 12% Increase in Operating Income Per Share For Year and Fourth Quarter of 2000

PRNewswire
BIRMINGHAM, Ala.
Feb 6, 2001

Torchmark Corporation (NYSE: TMK) reported today that for the year ended December 31, 2000, net operating income was $2.85 per share ($365 million), up 12% from $2.55 per share ($341 million) for the prior year. For the fourth quarter of 2000, net operating income was $.74 per share ($94 million) compared with $.66 per share ($87 million) for the fourth quarter of 1999, a 12% per share increase. (Net operating income for the year and fourth quarter 1999 excludes a nonrecurring charge.) Operating earnings per share were in line with the consensus analysts forecast per First Call/Thompson Financial.

FOR THE YEAR, insurance sales of $543 million increased 21% compared to 1999. Life sales were up 13%, and health sales were up 31%. Premium revenues of $2.0 billion increased 9%, with life premiums increasing 6% and health premiums increasing 10%. Net underwriting income increased 7%. On a per share basis, excess investment income increased 10%. Return on equity for the year was 16.3%.

FOR THE QUARTER, insurance sales of $160 million increased 30% compared to the fourth quarter of 1999. Life sales were up 9%, and health sales, which are primarily Medicare supplements, were up 53%. Premium revenues of $524 million increased 9%, with life premiums increasing 6% and health premiums increasing 12%. Net underwriting income increased 7%. On a per share basis, excess investment income increased 10%. Return on equity for the quarter was 16.2%.

  OPERATING HIGHLIGHTS FOR 2000

  --  Growth in total sales exceeded 15% for the sixth consecutive quarter
      when compared with prior year periods.
  --  All distribution channels had positive sales growth during the year.
  --  Direct Response life sales were up 18% for the year.
  --  Medicare Supplement sales were up 62% for the fourth quarter and
      32% for the year.
  --  United American Exclusive Agency sales force increased 56% to
      3,661 agents since the beginning of the year.
  --  For the sixth consecutive quarter, total premium revenues increased at
      least 8% over comparable prior year periods.
  --  Administrative expenses continued to decline as a percentage of
      premium revenues from 5.6% to 5.5%.

The following chart displays the key per share components of Torchmark's net operating income:

                    Key Components of Net Operating Income Per Diluted Share
                              Year Ended             Quarter Ended
                              December 31,     %     December 31,     %
                             2000     1999  Change  2000    1999   Change

   Insurance Net
    Underwriting Income      $2.77    $2.49    11    $.72    $.64    13

   Excess Investment Income   1.77     1.61    10     .45     .41    10

   Other                      (.23)    (.25)   (8)   (.05)   (.06)  (17)

   Income Tax                (1.46)   (1.30)   12    (.38)   (.33)   15

   Net Operating Income
    Excluding Nonrecurring
    Charge                   $2.85    $2.55    12    $.74    $.66    12

   Nonrecurring Operating
    Charge                     ---     (.10)          ---    (.10)

   Net Operating Income      $2.85    $2.45          $.74    $.56


  INSURANCE OPERATIONS

THE YEAR ENDED DECEMBER 31, 2000 COMPARED WITH THE YEAR ENDED DECEMBER 31, 1999:

Total premium revenue increased 9% to $2.0 billion. Life premium revenue increased 6% to $1.1 billion. Health premium revenue increased 10% to $911 million.

Insurance net underwriting income increased 7% to $356 million. The life underwriting margin (before administrative expenses) was 25% of premium, compared with 26% for 1999. The health underwriting margin was 18% of premium, the same as for 1999. Administrative expenses were $112 million, compared with $105 million for 1999, but declined as a percentage of premium from 5.6% to 5.5%. Insurance underwriting results are summarized in the following chart:

                                 Insurance Net Underwriting Income
                                       (dollars in millions)
                         Year                   Year
                         Ended       % of       Ended      % of      %
                    Dec. 31, 2000  Premium  Dec. 31, 1999 Premium Change
  Underwriting Income
   before Administrative
   Expenses
    Life                 $271.7       25       $264.4       26       3
    Health                161.1       18        144.6       18      11
    Annuity                29.9                  25.7               16
                          462.7                 434.7
  Other Income              4.7                   3.3
  Administrative
   Expenses              (111.8)       6       (104.9)       6       7

  Insurance Net
   Underwriting Income   $355.6                $333.2                7

Total insurance sales for 2000 were $543 million, a 21% increase. Total life insurance sales of $291 million were up 13%. Of Torchmark's three major life insurance distribution units, Direct Response, Liberty National and American Income, the Direct Response unit continued as the largest writer of new life insurance sales with $113 million for the year, an 18% increase.

Total health insurance sales increased 31% to $252 million, including Medicare supplement sales of $201 million, which increased 32%. Total health sales by the United American Exclusive and Independent agencies, the primary writers of health insurance for Torchmark, were $230 million, an increase of 35%. The United American Exclusive agency grew 56% to 3,661 during the year. Medicare supplement annualized premium in force at year-end 2000 increased 16% to $729 million.

  Sales by distribution channels are shown in the following chart:

                            Annualized Life and Health Premium Issued
                                      (dollars in millions)
                          Life                Health              Total
                 Year Ended           Year Ended           Year Ended
                 December 31,   %     December 31,   %     December 31,  %
                 2000    1999  Chg.   2000    1999  Chg.   2000    1999 Chg.

  Direct
   Response     $112.9   $96.1  18     $3.6    $4.3 (17)  $116.5  $100.4  16

  LNL Exclusive
   Agency         53.6    51.5   4     10.1     9.9   2     63.7    61.3   4

  American Income
   Agency         56.6    54.0   5      8.6     8.0   7     65.2    62.1   5

  United American
   Agencies
    Exclusive
     Agency        4.7     5.3 (11)   145.1   102.6  41    149.8   107.9  39
    Independent
     Agency       25.7    13.3  93     85.1    68.0  25    110.8    81.3  36

  Other           37.2    37.0   1      ---     --- ---     37.2    37.0   1

  Total Premium
   Issued       $290.7  $257.2  13   $252.5  $192.8  31   $543.2  $450.0  21


  THE FOURTH QUARTER OF 2000 COMPARED WITH THE FOURTH QUARTER OF 1999:

Total premium revenue for the quarter increased 9% to $524 million. Life premium revenue increased 6% to $273 million. Health premium revenue increased 12% to $235 million.

Insurance net underwriting income increased 7% to $91 million. The life underwriting margin (before administrative expenses) was 26% of premium, compared with 25% for 1999. The health underwriting margin was 17% of premium, compared with 18% for the 1999 quarter. Insurance underwriting results are summarized in the following chart:

                                  Insurance Net Underwriting Income
                                         (dollars in millions)
                           Quarter              Quarter
                            Ended      % of      Ended        % of      %
                       Dec. 31, 2000 Premium  Dec. 31, 1999  Premium  Change
  Underwriting Income
   before Administrative
   Expenses
    Life                     $70.2       26        $64.8        25      8
    Health                    40.8       17         38.0        18      7
    Annuity                    8.4      7.3           16     119.4  110.1

  Other Income                 1.0                    .7
  Administrative Expenses    (29.3)       6        (26.0)        5     13

  Insurance Net Underwriting
   Income                    $91.2                 $84.8                7

Total insurance sales for the quarter were $160 million, a 30% increase. Total life insurance sales of $72 million were up 9%.

Total health insurance sales increased 53% to $88 million, including Medicare supplement sales of $75 million, which increased 62%. Total health sales by the two United American agencies were $82 million, a 60% increase, and were primarily Medicare supplements. Medicare supplement sales were enhanced during the quarter because of the large number of Medicare beneficiaries disenrolled by HMOs effective year-end 2000. Additional sales came from new Medicare beneficiaries who likely would have joined HMOs in previous years.

  Sales by distribution channels are shown in the following chart:

                          Annualized Life and Health Premium Issued
                                 (dollars in millions)
                          Life             Health               Total
                Quarter Ended       Quarter Ended       Quarter Ended
                 December 31,   %    December 31,  %     December 31,    %
                 2000   1999   Chg.  2000   1999  Chg.   2000    1999   Chg.
  Direct
   Response      $25.1  $23.9   5     $.7   $1.3  (44)   $25.8   $25.2    2

  LNL Exclusive
   Agency         13.4   13.1   2     2.6    2.6    0     15.9    15.6    2

  American Income
   Agency         14.5   14.2   2     2.1    2.1    1     16.6    16.3    2

  United American
   Agencies
    Exclusive
     Agency        1.2    1.2  (2)   52.4   31.6   66     53.5    32.8   63
    Independent
     Agency        8.6    4.4  95    30.1   19.9   51     38.7    24.3   59

  Other            9.1    8.9   2     ---    ---  ---      9.1     8.9    2

  Total Premium
   Issued        $71.7  $65.7   9   $87.9  $57.5   53   $159.6  $123.2   30


  INVESTMENTS

THE YEAR ENDED DECEMBER 31, 2000, COMPARED WITH THE YEAR ENDED DECEMBER 31, 1999:

Excess investment income (investment income less interest credited on net policy liabilities and less financing costs) increased 5% to $227 million. Investment income increased 5% to $481 million. Total debt declined by $95 million from year-end 1999. While average borrowing declined as compared to 1999, financing costs increased 6% to $70 million. Higher short-term interest rates were the primary cause of the increase in interest expense.

After tax net realized capital losses were $3 million for 2000 compared to $72 million of losses in 1999. The 1999 losses consisted of the loss on the sale of Torchmark's real estate portfolio, losses resulting from planned sales of fixed maturity investments and the 1999 decline in the market value of the interest rate swap.

SHARE REPURCHASE

In accordance with Torchmark's ongoing share repurchase program, a total of 5.8 million shares at a total cost of $135 million were repurchased during 2000 at an average cost of $23.22 per share. During the fourth quarter of 2000, the Company repurchased 751 thousand shares at an average cost of $28.27 per share. At December 31, 2000, there were 126 million Torchmark shares outstanding (127 million on a diluted basis).

  TORCHMARK CONSOLIDATED
  THE YEAR ENDED DECEMBER 31, 2000:

Return on equity for the year (excluding the effect of SFAS 115 and net realized investment losses) was 16.3%. At year-end, total assets were $13.0 billion and shareholders' equity was $2.2 billion. Book value per share was $18.53, excluding the effect of SFAS 115. The debt to capital ratio, excluding the effect of SFAS 115, was 21.5% as compared with 25.2% at the previous year-end (27.5% and 31.3%, respectively, when the Monthly Income Preferred Securities are treated as debt rather than equity).

Torchmark's total revenues from operations increased 8% to $2.5 billion. Net operating income ($365 million) differs from net income for the year by the following items net of taxes:

  (i)   net realized investment losses and related DAC adjustment, and
  (ii)  gain on redemption of debt.

1999 net operating income ($341 million), before the nonrecurring charge, differs from net income by the following items, net of taxes:

  (i)   net realized investment losses and related DAC adjustment,
  (ii)  net loss from discontinued asset management operations,
  (iii) gain on sale of equipment, and
  (iv)  the effect of a change in accounting principle for the interest rate
        swap, and
  (v)   nonrecurring operating charge.

  EARNINGS RELEASE CONFERENCE CALL WEBCAST

Torchmark will provide a live audio webcast of its fourth quarter earnings release conference call with financial analysts at 10:00 a.m. (eastern time) today, February 6, 2001. Access to the live webcast and replays will be available at http://www.torchmarkcorp.com/ on the Investor Relations page, at the "Conference Call on the Web" icon, or at http://www.prnewswire.com/.

Torchmark Corporation is a financial services holding company specializing in life and supplemental health insurance for "middle income" Americans marketed through multiple distribution channels including direct response, exclusive and independent agencies. Subsidiary Globe Life and Accident is a nationally recognized direct-response provider of life insurance known for its administrative efficiencies. United American has been a nationally recognized provider of Medicare supplement health insurance since 1966. Liberty National Life, one of the oldest traditional life insurers in the Southeast, is the largest insurer in its home state of Alabama. American Income Life is nationally recognized for providing supplemental life insurance to labor union members.

                                         Summary of Financial Results
                                   (in thousands, except per share data)
                                  Year Ended Dec. 31, Quarter Ended Dec. 31,
                                     2000       1999       2000      1999

  Total Revenue from Operations*  $2,521,216 $2,332,763   $643,906  $593,302

  Net Operating Income** Excluding
   Nonrecurring Charge (1999)       $365,292   $341,167    $93,686   $86,887
    Per Diluted Share                   2.85       2.55        .74       .66
  Net Income                        $362,035   $273,956    $92,123   $68,964
    Per Diluted Share                   2.82       2.04        .73       .52

  Weighted Average Diluted
   Shares Outstanding (000 omitted)  128,353    133,986    126,976   132,317

  *   Total revenue from operations excludes net realized investment losses,
      and for 1999, gain on sale of equipment.
  **  Net operating income excludes net realized investment losses net of
      the related adjustment to deferred acquisition cost after tax, and
      gain on redemption of debt; and in 1999, an adjustment for a change in
      accounting principle, net of tax, a gain on the sale of equipment, and
      a loss from discontinued operations.

SOURCE: Torchmark Corporation

Contact: Joyce Lane, Vice President, Investor Relations of Torchmark
Corporation, 972-569-3627, or fax, 972-569-3696, or jlane@torchmarkcorp.com

Website: http://www.torchmarkcorp.com/

Company News On-Call: http://www.prnewswire.com/comp/885425.html or fax,
800-758-5804, ext. 885425


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Key Contacts

Mike Majors
Vice President, Investor Relations
(972) 569-3627
tmkir@torchmarkcorp.com

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