MCKINNEY, Texas, Oct. 10 /PRNewswire-FirstCall/ -- Torchmark
Corporation (NYSE: TMK) announced today its expected results for the third
quarter of 2008.
Net income is expected to be approximately $63 million, or $.72 per
share, compared to $1.41 for the third quarter of 2007. The decline in 2008
is due to a $70 million charge related to the other than temporary
impairment of certain investments as discussed below.
Net operating income for the third quarter of 2008 is expected to be
approximately $132 million, or $1.51 per share, slightly above street
estimates, and a 9% increase over $1.38 for the year ago quarter. Net
operating income is a non-GAAP financial measure commonly used by insurance
companies to evaluate operating performance. It excludes certain
non-operating items such as realized investment gains and losses and
non-recurring items that are included in net income.
Other than temporary impairment
As indicated in its September 18, 2008 press release, Torchmark has
holdings in debt issued by AIG, Lehman Brothers, and Washington Mutual of
approximately $209 million, along with $2 million of preferred stock issued
by Fannie Mae. Torchmark has determined that a portion of these investments
are other than temporarily impaired, resulting in a writedown of
approximately $93 million ($70 million after tax). In spite of this
impairment, cash flows remain strong and Torchmark's capital is sufficient
to support its current operations.
This impairment is computed in accordance with current mark-to-market
accounting requirements, under which investments determined to be other
than temporarily impaired are marked to their current fair value. We
currently expect that the ultimate recovery value for these investments
will exceed current fair value, and as a result, that the ultimate loss
will be less than the current charge to income.
Torchmark will release third quarter earnings after the market closes
on Wednesday, October 22, 2008, and will host its conference call at 11:00
a.m. on Thursday, October 23, 2008.
Torchmark Corporation is a 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. Torchmark has several nationally
recognized insurance subsidiaries. Globe Life And Accident is a
direct-response provider of life insurance known for its administrative
efficiencies. American Income Life provides individual life insurance to
labor union members. Liberty National Life, one of the oldest traditional
life insurers in the Southeast, is the largest life insurer in its home
state of Alabama. United American is a consumer-oriented provider of
supplemental health insurance.
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, 2007, and any subsequent Forms 10-Q on file with the
Securities and Exchange Commission and on the Company's website at
http://www.torchmarkcorp.com on the Investor Relations page. Torchmark
specifically disclaims any obligation to update or revise any
forward-looking statement because of new information, future developments
or otherwise.
SOURCE Torchmark Corporation
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Related links:
http://www.torchmarkcorp.com
http://www.prnewswire.com/comp/885425.html/
CONTACT:
Mike Majors, Vice President, Investor
Relations of Torchmark Corporation, +1-972-569-3627, Fax,
+1-972-569-3282, tmkir@torchmarkcorp.com
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