Torchmark Corporation Reports First Quarter 20...(re Part D premiums are recognized evenly...),Health

Date:4/16/2008

re Part D premiums are recognized evenly throughout the year when they become due, and benefit costs are recognized when the costs are incurred. Due to the design of the product, premiums are evenly distributed throughout the year, but benefit costs are much higher earlier in the year. As a result, under GAAP, benefit costs can exceed premiums in the first part of the year but be less than premiums during the remainder of the year. For net operating income purposes, Torchmark defers excess benefits incurred in earlier interim periods to later periods in order to more closely match the benefit cost with the associated revenue. For the full year, the total premiums and benefits will be the same under this alternative method as they are under GAAP. The Company reports this difference between GAAP and management's non-GAAP disclosures, net of tax, as a reconciling item for the interim periods in the Financial Summary shown on page 1 of this release. A chart reconciling the Company's non-GAAP financial presentation to a GAAP presentation may be viewed at http://www.torchmarkcorp.com on the Investor Relations page at Financial Reports.

Torchmark Annuities consist of variable and fixed annuity contracts. Underwriting margin from the annuity segment was $1.1 million, down 57% from the year-ago quarter. Annuities comprised less than 1% of the Company's insurance underwriting margin for the quarter.

Administrative Expenses were $39.8 million, up 2.8% from the year-ago quarter, primarily the result of an increase in pension expense.

INVESTMENTS

Excess Investment Income -- comparing the first quarter 2008 with the first quarter 2007:

Management uses excess investment income as the measure to evaluate the performance of the investment segment. It is net investment income reduced by required interest. Required interest includes interest credited to net policy liabilities and interest on de
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SOURCE Torchmark Corporation Copyright©2008 PR Newswire. All rights reserved

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