Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K AMENDMENT NO.1 - GLOBE LIFE INC. | d8ka.htm |
Exhibit 99.1
Torchmark Corporation
Unaudited Pro Forma Condensed Consolidated Financial Statements
On December 31, 2010, Torchmark, through its wholly-owned subsidiary, Liberty National, completed the disposition of United Investors, a wholly-owned subsidiary of Liberty National. Consideration for the sale included cash proceeds of $337 million, net of transactions costs, as well as $21 million of post-closing adjustments.
The accompanying unaudited pro forma financial information reflects the impact of the disposition of United Investors on Torchmark’s financial position and operating results. The Unaudited Condensed Pro Forma Balance Sheet as of September 30, 2010 is based on the historical Balance Sheet of Torchmark as of September 30, 2010, adjusted to reflect the impact of the disposition of United Investors’ operations as if it had occurred on September 30, 2010. The Unaudited Condensed Pro Forma Statements of Operations for the nine months ended September 30, 2010 and each of the fiscal years ended December 31, 2009, 2008, and 2007 are based on the historical Statements of Operations of Torchmark for such periods after giving effect to the United Investors’ disposition as if it had occurred on January 1, 2007. The unaudited pro forma financial information should be read in conjunction with Torchmark’s consolidated financial statements and notes thereto contained in Torchmark’s 2009 Annual Report on Form 10-K filed on February 26, 2010, and Torchmark’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2010, filed on November 8, 2010.
The unaudited pro forma condensed consolidated financial statements have been prepared by management. They are provided for illustrative purposes only and are not necessarily indicative of the results of operations that might have occurred had the transaction been completed on the respective dates presented, nor are they necessarily indicative of Torchmark’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial statements reflect estimates and assumptions that Torchmark’s management believes to be reasonable.
Torchmark Corporation
Unaudited Pro-forma Condensed Balance Sheet
As of September 30, 2010
(Amounts in Thousands)
| Torchmark As Reported |
United Investors |
Pro Forma Adjustments |
Torchmark Pro Forma |
|||||||||||||
| Assets: |
||||||||||||||||
| Fixed maturities |
$ | 10,965,135 | $ | 10,965,135 | ||||||||||||
| Other invested assets |
550,655 | 550,655 | ||||||||||||||
| Cash |
30,264 | $ | 336,890 | (a) | 367,154 | |||||||||||
| Deferred acquisition costs and value of insurance purchased |
3,355,958 | 3,355,958 | ||||||||||||||
| Other assets |
1,168,610 | 1,168,610 | ||||||||||||||
| Assets of subsidiary held for sale |
1,645,845 | $ | (1,645,845 | ) | 0 | |||||||||||
| Total assets |
$ | 17,716,467 | $ | (1,645,845 | ) | $ | 336,890 | $ | 16,407,512 | |||||||
| Liability and Shareholders' Equity: |
||||||||||||||||
| Liabilities: |
||||||||||||||||
| Future policy benefits |
$ | 9,031,866 | $ | 9,031,866 | ||||||||||||
| Other policy liabilites |
387,927 | 387,927 | ||||||||||||||
| Current and deferred income taxes payable |
1,340,590 | $ | (3,025 | )(b) | 1,337,565 | |||||||||||
| Other liabilities |
1,413,545 | 1,413,545 | ||||||||||||||
| Liabilities of subsidiary held for sale |
1,274,845 | $ | (1,274,845 | ) | 0 | |||||||||||
| Total liabilities |
13,448,773 | (1,274,845 | ) | (3,025 | ) | 12,170,903 | ||||||||||
| Total shareholders' equity |
4,267,694 | (371,000 | ) | 339,915 | 4,236,609 | |||||||||||
| Total liabilities & shareholders' equity |
$ | 17,716,467 | $ | (1,645,845 | ) | $ | 336,890 | $ | 16,407,512 | |||||||
Torchmark Corporation
Unaudited Pro-forma Condensed Statement of Operations
For the Nine Months Ended September 30, 2010
(Amounts in Thousands Except Per Share Data)
| Torchmark As Reported |
United Investors(e) |
Pro Forma Adjustments |
Torchmark Pro Forma |
|||||||||||||
| Revenue: |
||||||||||||||||
| Life premium |
$ | 1,248,315 | $ | 1,248,315 | ||||||||||||
| Health premium |
749,583 | 749,583 | ||||||||||||||
| Other premium |
442 | 442 | ||||||||||||||
| Total premium |
1,998,340 | 1,998,340 | ||||||||||||||
| Net investment income |
510,060 | 18,118 | (c) | 528,178 | ||||||||||||
| Other income |
12,061 | 12,061 | ||||||||||||||
| Total revenue |
2,520,461 | 18,118 | 2,538,579 | |||||||||||||
| Benefits and expenses: |
||||||||||||||||
| Life policyholder benefits |
809,109 | 809,109 | ||||||||||||||
| Health policyholder benefits |
516,873 | 516,873 | ||||||||||||||
| Other policyholder benefits |
30,643 | 30,643 | ||||||||||||||
| Total policyholder benefits |
1,356,625 | 1,356,625 | ||||||||||||||
| Amortization of deferred acquisition costs |
318,498 | 318,498 | ||||||||||||||
| Commissions and premium taxes |
94,592 | 94,592 | ||||||||||||||
| Other operating expense |
131,120 | 131,120 | ||||||||||||||
| Interest expense |
56,539 | 56,539 | ||||||||||||||
| Total benefits and expenses |
1,957,374 | 1,957,374 | ||||||||||||||
| Income before income taxes |
563,087 | 18,118 | 581,205 | |||||||||||||
| Income taxes |
(189,749 | ) | (6,341 | )(d) | (196,090 | ) | ||||||||||
| Net Income |
$ | 373,338 | $ | 0 | $ | 11,777 | $ | 385,115 | ||||||||
| Basic net income per share |
$ | 4.56 | $ | 4.70 | ||||||||||||
| Diluted net income per share |
$ | 4.52 | $ | 4.67 | ||||||||||||
| Basic Shares |
81,872 | 81,872 | ||||||||||||||
| Diluted Shares |
82,500 | 82,500 | ||||||||||||||
Torchmark Corporation
Unaudited Pro-forma Condensed Statement of Operations
For the Year Ended December 31, 2009
(Amounts in Thousands Except Per Share Data)
| Torchmark As Reported |
United Investors |
Pro Forma Adjustments |
Torchmark Pro Forma | |||||||||||||||||
| Revenue: |
||||||||||||||||||||
| Life premium |
$ | 1,659,770 | $ | (67,917 | ) | $ | 1,591,853 | |||||||||||||
| Health premium |
1,017,711 | 1,017,711 | ||||||||||||||||||
| Other premium |
9,718 | (9,177 | ) | 541 | ||||||||||||||||
| Total premium |
2,687,199 | (77,094 | ) | 2,610,105 | ||||||||||||||||
| Net investment income |
674,915 | (42,375 | ) | 25,229 | (c) | 657,769 | ||||||||||||||
| Realized investment losses |
(141,659 | ) | 12,167 | (129,492 | ) | |||||||||||||||
| Other income |
1,942 | (22 | ) | 1,920 | ||||||||||||||||
| Total revenue |
3,222,397 | (107,324 | ) | 25,229 | 3,140,302 | |||||||||||||||
| Benefits and expenses: |
||||||||||||||||||||
| Life policyholder benefits |
1,094,533 | (54,285 | ) | 1,040,248 | ||||||||||||||||
| Health policyholder benefits |
677,319 | 677,319 | ||||||||||||||||||
| Other policyholder benefits |
40,948 | (5,186 | ) | 35,762 | ||||||||||||||||
| Total policyholder benefits |
1,812,800 | (59,471 | ) | 1,753,329 | ||||||||||||||||
| Amortization of deferred acquisition costs |
429,253 | (13,267 | ) | 415,986 | ||||||||||||||||
| Commissions and premium taxes |
131,130 | (2,510 | ) | 128,620 | ||||||||||||||||
| Other operating expense |
174,089 | (3,959 | ) | 170,130 | ||||||||||||||||
| Interest expense |
69,932 | 69,932 | ||||||||||||||||||
| Total benefits and expenses |
2,617,204 | (79,207 | ) | 2,537,997 | ||||||||||||||||
| Income before income taxes |
605,193 | (28,117 | ) | 25,229 | 602,305 | |||||||||||||||
| Income taxes |
(200,240 | ) | 9,216 | (8,830 | )(d) | (199,854 | ) | |||||||||||||
| Net Income |
$ | 404,953 | $ | (18,901 | ) | $ | 16,399 | $ | 402,451 | |||||||||||
| Basic net income per share |
$ | 4.88 | $ | 4.85 | ||||||||||||||||
| Diluted net income per share |
$ | 4.88 | $ | 4.85 | ||||||||||||||||
| Basic Shares |
83,034 | 83,034 | ||||||||||||||||||
| Diluted Shares |
83,034 | 83,034 | ||||||||||||||||||
Torchmark Corporation
Unaudited Pro-forma Condensed Statement of Operations
For the Year Ended December 31, 2008
(Amounts in Thousands Except Per Share Data)
| Torchmark As Reported |
United Investors |
Pro Forma Adjustments |
Torchmark Pro Forma |
|||||||||||||
| Revenue: |
||||||||||||||||
| Life premium |
$ | 1,616,804 | $ | (72,585 | ) | $ | 1,544,219 | |||||||||
| Health premium |
1,127,059 | 1,127,059 | ||||||||||||||
| Other premium |
14,393 | (13,771 | ) | 622 | ||||||||||||
| Total premium |
2,758,256 | (86,356 | ) | 2,671,900 | ||||||||||||
| Net investment income |
671,495 | (44,289 | ) | 27,023 | (c) | 654,229 | ||||||||||
| Realized investment losses |
(107,504 | ) | (37 | ) | (107,541 | ) | ||||||||||
| Other income |
4,671 | 4,671 | ||||||||||||||
| Total revenue |
3,326,918 | (130,682 | ) | 27,023 | 3,223,259 | |||||||||||
| Benefits and expenses: |
||||||||||||||||
| Life policyholder benefits |
1,073,920 | (58,426 | ) | 1,015,494 | ||||||||||||
| Health policyholder benefits |
759,588 | 759,588 | ||||||||||||||
| Other policyholder benefits |
39,407 | (11,949 | ) | 27,458 | ||||||||||||
| Total policyholder benefits |
1,872,915 | (70,375 | ) | 1,802,540 | ||||||||||||
| Amortization of deferred acquisition costs |
398,324 | (19,936 | ) | 378,388 | ||||||||||||
| Commissions and premium taxes |
145,981 | (4,395 | ) | 141,586 | ||||||||||||
| Other operating expense |
185,212 | (3,119 | ) | 182,093 | ||||||||||||
| Interest expense |
63,229 | 63,229 | ||||||||||||||
| Total benefits and expenses |
2,665,661 | (97,825 | ) | 2,567,836 | ||||||||||||
| Income before income taxes |
661,257 | (32,857 | ) | 27,023 | 655,423 | |||||||||||
| Income taxes |
(208,998 | ) | 10,298 | (9,458 | )(d) | (208,158 | ) | |||||||||
| Net Income |
$ | 452,259 | $ | (22,559 | ) | $ | 17,565 | $ | 447,265 | |||||||
| Basic net income per share |
$ | 5.14 | $ | 5.08 | ||||||||||||
| Diluted net income per share |
$ | 5.11 | $ | 5.05 | ||||||||||||
| Basic Shares |
88,053 | 88,053 | ||||||||||||||
| Diluted Shares |
88,516 | 88,516 | ||||||||||||||
Torchmark Corporation
Unaudited Pro-forma Condensed Statement of Operations
For the Year Ended December 31, 2007
(Amounts in Thousands Except Per Share Data)
| Torchmark As Reported |
United Investors |
Pro Forma Adjustments |
Torchmark Pro Forma |
|||||||||||||
| Revenue: |
||||||||||||||||
| Life premium |
$ | 1,569,964 | $ | (74,601 | ) | $ | 1,495,363 | |||||||||
| Health premium |
1,236,797 | 1,236,797 | ||||||||||||||
| Other premium |
20,470 | (19,868 | ) | 602 | ||||||||||||
| Total premium |
2,827,231 | (94,469 | ) | 2,732,762 | ||||||||||||
| Net investment income |
648,826 | (46,851 | ) | 24,338 | (c) | 626,313 | ||||||||||
| Other income |
10,640 | (860 | ) | 9,780 | ||||||||||||
| Total revenue |
3,486,697 | (142,180 | ) | 24,338 | 3,368,855 | |||||||||||
| Benefits and expenses: |
||||||||||||||||
| Life policyholder benefits |
1,039,278 | (53,047 | ) | 986,231 | ||||||||||||
| Health policyholder benefits |
835,101 | 835,101 | ||||||||||||||
| Other policyholder benefits |
28,049 | (5,830 | ) | 22,219 | ||||||||||||
| Total policyholder benefits |
1,902,428 | (58,877 | ) | 1,843,551 | ||||||||||||
| Amortization of deferred acquisition costs |
391,011 | (18,889 | ) | 372,122 | ||||||||||||
| Commissions and premium taxes |
155,483 | (3,086 | ) | 152,397 | ||||||||||||
| Other operating expense |
173,406 | (4,479 | ) | 168,927 | ||||||||||||
| Interest expense |
67,564 | 67,564 | ||||||||||||||
| Total benefits and expenses |
2,689,892 | (85,331 | ) | 2,604,561 | ||||||||||||
| Income before income taxes |
796,805 | (56,849 | ) | 24,338 | 764,294 | |||||||||||
| Income taxes |
(269,270 | ) | 18,551 | (8,518 | )(d) | (259,237 | ) | |||||||||
| Net Income |
$ | 527,535 | $ | (38,298 | ) | $ | 15,820 | $ | 505,057 | |||||||
| Basic net income per share |
$ | 5.59 | $ | 5.35 | ||||||||||||
| Diluted net income per share |
$ | 5.50 | $ | 5.27 | ||||||||||||
| Basic Shares |
94,317 | 94,317 | ||||||||||||||
| Diluted Shares |
95,846 | 95,846 | ||||||||||||||
Torchmark Corporation
Notes to Unaudited Pro-forma Condensed Financial Statements
(Amounts in Thousands)
| (a) | To adjust for the proceeds and related costs associated with the sale of United Investors. |
| (b) | To adjust for the income tax effects related to the sale. |
| (c) | To adjust for investment income earned from the proceeds of the sale, determined as the consideration from the sale as if invested as of January 1, 2007 , and computed at Torchmark's new money rate. Interest then was applied to each successive period accordingly, compounded after tax. |
| (d) | To adjust for the income tax effects related to the investment income earned at the marginal tax rate of 35%. |
| (e) | The United Investors balances were presented in discontinued operations in the September 30, 2010 Form 10-Q. Therefore, there are no United Investors adjustments. |