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Torchmark Corporation Reports 9% Increase in Operating Income Per Share For The Year and 8% Increase in Fourth Quarter 2002

PRNewswire-FirstCall
BIRMINGHAM, Ala.
Feb 6, 2003

Torchmark Corporation (NYSE: TMK) reported today that for the year ended December 31, 2002, net operating income was $3.51 per share ($424 million), up 9% per share over the same year-ago period. Net operating income for the fourth quarter of 2002 was $.90 per share ($106 million), an 8% per share increase compared with the $.83 per share ($103 million) for the year-ago quarter.

Net income for the year ended December 31, 2002, was $3.18 per share ($383 million), a 12% increase compared with $2.83 per share ($357 million) for the same year-ago period. Net income for the fourth quarter of 2002 was $.89 per share ($105 million), a 33% increase compared with $.67 per share ($83 million) for the year-ago quarter. A reconciliation between net operating income and net income is shown later in this release.

  HIGHLIGHTS for 2002:
  --  Four distribution units produced double-digit growth in total
      insurance sales.
  --  Total life insurance sales grew 13%.  Direct Response led life sales
      with $123 million of annualized premium, up 10%.
  --  American Income led life sales growth with a 38% increase to
      $92 million of annualized premium sold.
  --  Health insurance sales declined 5% to $202 million because of a 37%
      decline in Medicare supplement sales; however, sales of limited
      benefit health plans increased 87% during 2002.
  --  Excess Investment Income of $295 million grew 15%, in part due to a
      33% decline in financing costs.


   PER SHARE AMOUNTS

                       Year Ended                Quarter Ended
                       December 31,        %      December 31,         %
                     2002       2001      Chg.   2002      2001       Chg.

  Insurance
   Underwriting
   Income           $2.98      $2.92       2     $.75      $.72         4
  Excess Investment
   Income            2.44       2.03      20      .63       .55        15
  Other              (.12)      (.12)   (.03)    (.03)
  Income Tax        (1.79)     (1.62)     10     (.46)     (.42)       10
  Net Operating
   Income           $3.51      $3.21       9     $.90      $.83         8

  Realized Gains
   (Losses), Net
   of Tax
    Investments      (.43)      (.04)             ---      (.09)
    Valuation of
     Interest Rate
     Swaps            .10        .03             (.01)     (.02)
  Goodwill
   Amortization       ---       (.10)             ---      (.02)
  Loss on
   Redemption of
   Debt, Net of Tax   ---       (.04)             ---      (.02)
  Change in
   Accounting
   Principle,
   Net of Tax         ---       (.21)             ---       ---
  Discontinued
   Operations         ---       (.03)             ---       ---
  Net Income        $3.18      $2.83      12     $.89      $.67        33

INSURANCE OPERATIONS comparing the year ended December 31, 2002, with the year ended December 31, 2001:

Premium Revenue

Total premium revenue increased 3% to $2.3 billion. Life premium revenue increased 7% to $1.2 billion. Health premium revenue increased only 1% to $1.0 billion as sales of Medicare supplements have been under pressure the last two years. Medicare supplements are 69% of the Company's annualized health premiums in force.

Annuity premium revenue declined 35% to $39 million. Torchmark's annuities are predominantly variable annuity contracts. Customers' interest in equity investments has declined and Torchmark's former distributor has moved some existing customers to another carrier. Torchmark previously announced it would not emphasize the variable annuity market, much preferring the life insurance business. The separate account assets on the balance sheet are down 34% and reflect the decline in the number of variable annuity accounts as well as the decline in the market value of underlying equity investments.

                                     Premium Revenue
                                  (dollars in millions)
              Life and Annuity           Health               Total
             Year Ended            Year Ended           Year Ended
             December 31,    %     December 31,   %     December 31,   %
            2002     2001   Chg.  2002    2001   Chg.  2002    2001   Chg.

  Direct
   Response$315.7   $289.1   9    $21.8    $17.8  23    $337.4   $306.9   10

  LNL
   Exclusive
   Agency   301.8    297.3   2    159.7    155.9   2     461.5    453.2    2

  American
   Income
   Agency   277.2    246.7  12     52.1     49.8   5     329.3    296.5   11

  Military  148.7    133.4  11                           148.7    133.4   11

  United
   American
   Agencies
    Branch
     Office
     Agency  19.5     19.3   1    318.5    323.2  (1)    338.0    342.4  (1)
    Independent
     Agency  50.7     47.8   6    467.0    464.1   1     517.7    511.9   1

  Other
   Life     107.5    111.4  (4)     ---      --- ---     107.5    111.4  (4)

  Total   1,221.0  1,145.0   7  1,019.1  1,010.8   1   2,240.1  2,155.7   4

  Annuity    38.9     59.5 (35)     ---      ---          38.9     59.5 (35)

  Total  $1,259.9 $1,204.4   5 $1,019.1 $1,010.8   1  $2,279.0 $2,215.2   3


  Insurance Underwriting Income

Insurance net underwriting income declined 2% to $359 million. The life underwriting margin (before administrative expenses) was 25% of premium, the same as for 2001. Health underwriting income was $167 million with an underwriting margin (before administrative expenses) of 16% of premium. Administrative expenses were $125 million, compared with $119 million for 2001, but were flat as a percentage of premium. Insurance underwriting results are summarized in the following chart:

                                 Insurance Net Underwriting Income
                               (dollars in millions except per share)
                        Year Ended    % of      Year Ended    % of       %
                      Dec. 31, 2002  Premium  Dec. 31, 2001  Premium  Change

  Underwriting Income
   before Administrative
   Expenses
    Life                  $299.2        25        $284.3        25       5
    Health                 167.5        16         173.5        17      (3)
    Annuity                 13.4                    24.8               (46)
                           480.1                   482.5
  Other Income               3.9                     4.4
  Administrative Expenses (124.6)        5        (119.0)        5       5

  Insurance Net
   Underwriting Income    $359.4                  $367.9                (2)
    Per Share              $2.98                   $2.92                 2


  Sales

Total insurance sales for 2002 were $536 million, a 5% increase. Total life insurance sales of $334 million were up 13%. The Direct Response unit continued as the largest writer of new life insurance sales with $123 million for the year, a 10% increase over 2001. American Income was the fastest growing life distributor with life sales of $92 million, a 38% increase over 2001. The Military distribution unit also had growth of 11% at $23 million for the year.

Total health insurance sales decreased 5% to $202 million. Total health sales by the United American Branch Office and Independent agencies, the primary writers of health insurance for Torchmark, were $171 million, a decline of 9%, but health sales by the UA Independent unit were up 31% for the year, primarily the result of increased sales of non-Medicare, limited benefit plans.

Medicare supplement sales declined 37% when compared with 2001, which had also declined from 2000, a year that saw very high Medicare supplement sales due primarily to seniors returning to traditional Medicare as Medicare HMOs continued to withdraw from the market. While Medicare HMOs continued to terminate members in 2001 and in 2002, it was in lower numbers, thus reducing the number of possible sales of Medicare supplement policies from seniors returning to traditional Medicare. In addition, Torchmark Medicare supplement sales in 2002 faced competitive premium rate pressures in some markets as Torchmark implemented premium rate increases more timely than some competitors. The number of producing agents at the United American Branch Office agency also declined as agents in some markets left United American for easier sales at those competitors whose Medicare supplement products were currently lower priced. Medicare supplement annualized premium in force at year-end 2002 declined to $714 million, a 6% decline from the year-ago date. 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,  %
               2002    2001  Chg.  2002     2001  Chg.   2002    2001  Chg
  Direct
   Response   $123.3  $112.0  10    $6.8     $3.3 105   $130.0  $115.3  13

  LNL
   Exclusive
   Agency       56.3    54.9   3    12.2     10.7  13     68.5    65.6   4

  American
   Income
   Agency       91.9    66.4  38    11.4     10.0  14    103.3    76.4  35

  Military      23.5    21.2  11                          23.5    21.2  11

  United
   American
   Agencies
    Branch
     Office
     Agency      5.6     4.9  15    75.4    115.7 (35)    81.0   120.6 (33)
    Independent
     Agency     25.7    24.5   5    96.1     73.5  31    121.7    98.0  24

  Other          7.8    10.8 (28)    ---      --- ---      7.8    10.8 (28)

  Total
   Premium
   Issued     $334.0  $294.6  13  $201.8   $213.3  (5)  $535.8  $507.9   5

INSURANCE OPERATIONS - comparing the fourth quarter of 2002 with the fourth quarter of 2001:

Premium Revenue

Total premium revenue for the quarter increased 3% to $569 million. Life premium revenue increased 7% to $309 million. Health premium revenue decreased slightly to $251 million. Annuity premium declined 34% to $9 million.

                                    Premium Revenue
                                (dollars in millions)
                    Life               Health               Total
                Quarter ended       Quarter ended       Quarter ended
                 December 31,   %    December 31,  %     December 31,   %
                 2002   2001   Chg.  2002  2001   Chg.   2002   2001   Chg

  Direct
   Response      $78.2  $71.6   9     $5.5  $4.4   24    $83.7  $76.0  10

  LNL
   Exclusive
   Agency         75.2   73.8   2     40.1  39.3    2    115.3  113.1   2

  American
   Income
   Agency         72.1   63.8  13     13.3  12.6    6     85.4   76.4  12

  Military        38.6   34.6  12      ---   ---  ---     38.6   34.6  12

  United
   American
   Agencies
    Branch
     Office        4.8    4.7   2     77.6   82.1  (5)    82.4   86.8  (5)
    Independent
     Agency       12.9   11.4  13    114.5  113.6   1    127.4  125.0   2

  Other Life      26.7   27.5  (3)     ---    --- ---     26.7   27.5  (3)

  Total         $308.6 $287.4   7   $251.0 $252.0   0   $559.6 $539.5   4

  Annuity          9.0   13.6 (34)     ---    --- ---      9.0   13.6 (34)

  Total         $317.6 $301.0   6   $251.0 $252.0   0   $568.6 $553.0   3


  Insurance Underwriting Income

Insurance net underwriting income declined 1% to $89 million. The life underwriting margin (before administrative expenses) was 25% of premium and the health underwriting margin was 16% of premium. Insurance underwriting results are summarized in the following chart:

                                 Insurance Net Underwriting Income
                              (dollars in millions except per share)
                      Quarter Ended    % of   Quarter Ended   % of      %
                      Dec. 31, 2002  Premium  Dec. 31, 2001  Premium  Change

  Underwriting Income
   before Administrative
   Expenses
    Life                  $77.0        25         $73.5         26      5
    Health                 40.2        16          40.4         16     (1)
    Annuity                 2.8                     6.0               (53)

  Other Income               .8                     1.0
  Administrative Expenses (31.6)        6         (30.9)         6      2

  Insurance Net
   Underwriting Income    $89.1                   $89.9                (1)
    Per Share              $.75                    $.72                 4


  Sales

Total insurance sales for the quarter were $135 million, a 4% increase. Total life insurance sales were $83 million, up 13%. Life sales were led by Direct Response with sales of $32 million, an increase of 18%, followed by life sales of $23 million by American Income, an increase of 22%. The Military Agency also produced double-digit life sales growth during the quarter.

Total health insurance sales decreased 8% to $52 million, while Medicare supplement sales declined 45% to $22 million.

  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
                  Dec. 31,     %      Dec. 31,     %        Dec. 31,     %
                2002   2001   Chg.  2002   2001   Chg.    2002    2001  Chg.

  Direct
   Response     $31.8  $26.9   18     $.4    $.9  (51)    $32.3   $27.8  16

  LNL
   Exclusive
   Agency        13.9   13.7    2     2.9    3.0   (3)     16.8    16.7   1

  American
   Income
   Agency        23.1   18.9   22     2.9    2.6   12      26.0    21.5  21

  Military        5.9    4.9   21     ---    ---            5.9     4.9  21

  United
   American
   Agencies
    Branch
     Office        .9    1.2  (24)   20.2   29.3  (31)     21.1    30.5 (31)
    Independent
     Agency       5.8    5.9   (1)   25.4   20.5   24      31.2    26.4  18

  Other           1.9    2.2  (16)    ---    ---  ---       1.9     2.2 (16)

  Total
   Premium
   Issued       $83.2  $73.6   13   $51.8  $56.3   (8)   $135.0  $129.9   4

INVESTMENTS - comparing the year ended December 31, 2002, to the year ended December 31, 2001:

Excess Investment Income

Excess investment income (investment income on a tax equivalent basis, less interest credited on net policy liabilities and less financing costs) was $295 million compared with $256 million, a 15% increase, or a 20% increase on a per-share basis, as detailed in the following chart:

                                           Year Ended
                                  Dec. 31, 2002   Dec. 31, 2001          %
                           (dollars in millions, except per share)    Change

  Investment Income                   $522.3          $496.2             5

  Required Interest:
    Interest Credited on Net
     Policy Liabilities               (192.8)         (189.2)            2
    Financing Costs:
      Debt                             (45.9)          (44.7)
      Trust Preferred/MIPS             (11.7)          (14.9)
      Interest Rate Swaps               23.1             8.2
      Total Financing Costs            (34.5)          (51.5)          (33)

    Total Required Interest           (227.3)         (240.7)           (6)

  Excess Investment Income            $295.0          $255.5            15
    Per Share                          $2.44           $2.03            20

Investment income increased 5%. The fixed income portfolio, which at amortized cost comprised 92% of total invested assets, earned 7.44%, compared with 7.47% a year ago. Acquisitions of fixed maturity investments totaled $1.2 billion, with an average yield of 7.39%.

At year-end 2002, the market value of Torchmark's fixed maturity portfolio was $7 billion, $306 million higher than amortized cost. At amortized cost, 91% of fixed maturities were rated "investment grade."

Financing costs were $35 million, down $17 million, or 33%. The decline was primarily attributable to the $15 million increase in cash settlements received from interest rate swap agreements and the $3 million decline in MIPS/Trust Preferred dividends.

As shown above, the Company received $23 million of income from interest rate swap agreements, an increase of $15 million over the prior year. Under these agreements, the Company's fixed interest expense obligations are converted to floating rates. While the cash settlements from these agreements are reflected in net operating income, Financial Accounting Standard 133 requires that the Company also record the "market value" of the swaps (i.e. the present value of the estimated future cash settlements) on the balance sheet. The quarterly change in the market value is recognized as a "non-cash" capital gain or loss, even though Torchmark plans to hold the swaps until the scheduled termination dates, at which time their market value and the total capital gains and losses recorded will be $0. At year-end 2002, the cumulative realized gains were $24 million, net of tax.

NET INCOME - comparing the year ended December 31, 2002 with 2001:

Net income was $3.18 per share ($383 million) in 2002 compared with $2.83 per share ($357 million) in 2001. The following chart shows the differences between net operating income and net income:

                           (Dollars in millions except per share)
                          Year Ended                  Quarter Ended
                Dec. 31,   Per  Dec. 31,   Per  Dec. 31, Per  Dec. 31,  Per
                  2002    Share   2001    Share   2002  Share   2001   Share

  Net Operating
   Income        $423.6   $3.51  $404.6   $3.21  $106.3  $.90  $102.7   $.83
  Realized Gains
   or Losses, net
   of tax:
    Investments   (51.7)           (4.8)            (.3)        (11.7)
    Valuation of
     Interest Rate
     Swaps         11.6             3.2             (.8)         (2.5)
  Goodwill
   Amortization     ---           (12.1)            ---          (3.0)
  Loss on
   redemption of
   debt, net of
   tax              ---            (4.6)            ---          (2.4)
  Change in
   Accounting
   Principle,
   Net of Tax       ---           (26.6)            ---           ---
  Discontinued
   Operations,
   Net of Tax       ---            (3.3)            ---           ---

  Net Income     $383.4   $3.18  $356.5   $2.83  $105.2  $.89   $83.1   $.67

The difference between net operating income and net income for the year ended 2002 was primarily due to $52 million in realized losses. In 2001 the primary difference was the result of a $27 million charge due to a change in accounting principle and a $12 million charge for amortization of goodwill for which there were no similar transactions in 2002.

SHARE REPURCHASE - during the year ended December 31, 2002:

Torchmark's ongoing share repurchase program resulted in the repurchase of 4.8 million shares of Torchmark Corporation common stock for a total cost of $182 million ($37.82 average cost per share). During the fourth quarter of 2002, the Company repurchased 365 thousand shares at an average cost of $35.85 per share. At December 31, 2002, there were 118.3 million Torchmark shares outstanding (118.6 million on a diluted basis).

OTHER FINANCIAL INFORMATION for the year ended December 31, 2002:

Net operating income as a return on equity (excluding the FAS 115 adjustment) for 2002 was 16.5%, compared with 16.6% for the year-ago period when restated to remove the amortization of goodwill. Total assets at December 31, 2002, were $12.4 billion and shareholders' equity was $2.9 billion.

   Book value per diluted share at December 31, 2002 was as follows:

               Excluding FAS 115 adjustment    $22.46
               FAS 115 adjustment                1.58
               As Reported for GAAP            $24.04

The debt to capital ratio was 21.1%* at December 31, 2002, and was 21.9%* at the same year-ago date (25.2%* and 26.2%*, when the Monthly Income Preferred and Trust Preferred Securities are treated as debt rather than equity).

* These amounts exclude the adjustment of assets to fair market value required by FAS 115.

   SUMMARY OF FINANCIAL RESULTS

                                  Summary of Financial Results
                             (in thousands, except per share data)
                        Year Ended Dec. 31,       Quarter Ended Dec. 31,
                         2002          2001         2002          2001

  Total Revenue
   from Operations *  $2,799,771    $2,709,474     $700,750      $678,387

  Net Operating
   Income**             $423,609      $404,585     $106,338      $102,723

      Per Diluted Share    $3.51         $3.21         $.90          $.83
  Net Income            $383,433      $356,513     $105,192       $83,126
      Per Diluted Share    $3.18         $2.83         $.89          $.67

  Weighted Average
   Diluted Shares
   Outstanding (000
   omitted)              120,669       125,861      118,719       124,451

  *  Total revenue from operations excludes net realized investment losses.

** Net operating income excludes net realized investment and interest rate swaps gains or losses; a loss on the redemption of debt; and for 2001, a charge for the amortization of goodwill, a loss from a change in accounting principle and loss from discontinued operations, all items net of tax.

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, 2001, and Form 10Q for the quarter ended September 30, 2002, on file with the Securities and Exchange Commission. 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 2002 year-end and fourth quarter earnings release conference call with financial analysts at 10:00 a.m. (Eastern Time) today, February 6, 2003. Access to the live webcast and replays will be available at www.torchmarkcorp.com on the Investor Relations page, at the "Conference Call on the Web" icon, or at www.PRNewswire.com/news at the "Multimedia Menu" at "Conference Calls." Supplemental financial reports will be available February 6 on the Investor Relations page of the Torchmark website at the "Financial Reports" icon.

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, and 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 life insurer in its home state of Alabama. American Income Life is nationally recognized for providing supplemental life insurance to labor union members.

SOURCE: Torchmark Corporation

CONTACT: Joyce Lane, Vice President, Investor Relations of Torchmark
Corporation, +1-972-569-3627, or fax, +1-972-569-3696, or
jlane@torchmarkcorp.com

Web site: http://www.prnewswire.com/news

Web site: http://www.torchmarkcorp.com/

Company News On-Call: http://www.prnewswire.com/comp/885425.html


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Key Contacts

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

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