Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

Globe Life Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollar amounts in thousands, except per share data)



	March 31, 2022		December 31, 2021
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2022—$17,975,410; 2021—$17,805,309, allowance for credit losses: 2022— $0; 2021— $387)	$	19,179,107	$	21,305,287
Policy loans	591,958		589,634
Other long-term investments (includes: 2022—$732,360; 2021—$640,263 under the fair value option)	889,769		793,925
Short-term investments	57,344		69,145
Total investments	20,718,178		22,757,991
Cash	127,628		92,163
Accrued investment income	269,975		251,307
Other receivables	487,929		487,443
Deferred acquisition costs	4,999,935		4,914,728
Goodwill	481,791		481,791
Other assets	764,892		782,625

Total assets	$	27,850,328	$	29,768,048
Liabilities:
Future policy benefits	$	16,229,940	$	16,034,727
Unearned and advance premium	70,889		65,472
Policy claims and other benefits payable	433,553		412,940
Other policyholders' funds	99,606		98,935
Total policy liabilities	16,833,988		16,612,074
Current and deferred income taxes	1,298,911		1,765,021
Short-term debt	522,079		479,644
Long-term debt (estimated fair value: 2022—$1,525,731; 2021—$1,667,009)	1,546,858		1,546,494
Other liabilities	754,472		722,009

Total liabilities	20,956,308		21,125,242
Commitments and Contingencies (Note 5)
Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2022 and 2021	—		—
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2022—109,218,183 issued; 2021—109,218,183 issued)	109,218		109,218
Additional paid-in-capital	523,068		520,564
Accumulated other comprehensive income (loss)	869,495		2,677,583
Retained earnings	6,315,609		6,182,100
Treasury stock, at cost: (2022—10,343,676 shares; 2021—9,650,845 shares)	(923,370)		(846,659)
Total shareholders' equity	6,894,020		8,642,806
Total liabilities and shareholders' equity	$	27,850,328	$	29,768,048

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollar amounts in thousands, except per share data)


	Three Months Ended March 31,
		2022		2021
Revenue:
Life premium		$	754,602	$	708,119
Health premium		317,000		294,173
Other premium		—		1
Total premium		1,071,602		1,002,293
Net investment income		243,834		235,820
Realized gains (losses)		(7,244)		28,152

Other income		164		295
Total revenue		1,308,356		1,266,560

Benefits and expenses:
Life policyholder benefits		549,343		517,631
Health policyholder benefits		196,855		187,829
Other policyholder benefits		7,050		7,259
Total policyholder benefits		753,248		712,719

Amortization of deferred acquisition costs		158,384		152,993
Commissions, premium taxes, and non-deferred acquisition costs		90,813		79,666
Other operating expense		84,352		81,210
Interest expense		19,944		21,178
Total benefits and expenses		1,106,741		1,047,766

Income before income taxes		201,615		218,794
Income tax benefit (expense)		(37,254)		(40,277)



Net income		$	164,361	$	178,517




Basic net income per common share		$	1.66	$	1.73




Diluted net income per common share		$	1.64	$	1.70

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollar amounts in thousands)


	Three Months Ended March 31,
		2022		2021
Net income		$	164,361	$	178,517

Other comprehensive income (loss):

Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period		(2,292,922)		(1,262,059)
Provision for credit losses
Other reclassification adjustments included in net income		(4,030)		(17,142)
Foreign exchange adjustment on fixed maturities recorded at fair value		284		2,442



Total unrealized investment gains (losses)		(2,296,668)		(1,276,759)
Less applicable tax (expense) benefit		482,299		268,119
Unrealized gains (losses) on investments, net of tax		(1,814,369)		(1,008,640)

Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costs		376		359
Less applicable tax (expense) benefit		(79)		(75)
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax		297		284

Foreign exchange translation:
Foreign exchange translation adjustments, other than securities		4,138		(610)
Less applicable tax (expense) benefit		(869)		128
Foreign exchange translation adjustments, other than securities, net of tax		3,269		(482)

Pension:



Pension adjustments		3,437		5,200
Less applicable tax (expense) benefit		(722)		(1,091)
Pension adjustments, net of tax		2,715		4,109

Other comprehensive income (loss)		(1,808,088)		(1,004,729)
Comprehensive income (loss)		$	(1,643,727)	$	(826,212)

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)

(Dollar amounts in thousands, except per share data)


	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Shareholders' Equity
Balance at December 31, 2021	$	—	$	109,218	$	520,564	$	2,677,583	$	6,182,100	$	(846,659)	$	8,642,806


Comprehensive income (loss)	—		—		—		(1,808,088)		164,361		—		(1,643,727)
Common dividends declared ($0.2075 per share)	—		—		—		—		(20,543)		—		(20,543)
Acquisition of treasury stock	—		—		—		—		—		(119,482)		(119,482)
Stock-based compensation	—		—		2,504		—		(345)		6,876		9,035
Exercise of stock options	—		—		—		—		(9,964)		35,895		25,931

Balance at March 31, 2022	$	—	$	109,218	$	523,068	$	869,495	$	6,315,609	$	(923,370)	$	6,894,020


	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Shareholders' Equity

Balance at December 31, 2020	$	—	$	113,218	$	527,435	$	3,029,244	$	5,874,109	$	(772,914)	$	8,771,092


Comprehensive income (loss)	—		—		—		(1,004,729)		178,517		—		(826,212)
Common dividends declared ($0.1975 per share)	—		—		—		—		(20,435)		—		(20,435)
Acquisition of treasury stock	—		—		—		—		—		(132,720)		(132,720)
Stock-based compensation	—		—		(11,422)		—		1,168		18,142		7,888
Exercise of stock options	—		—		—		—		(12,807)		45,531		32,724


Balance at March 31, 2021	$	—	$	113,218	$	516,013	$	2,024,515	$	6,020,552	$	(841,961)	$	7,832,337

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar amounts in thousands)


	Three Months Ended March 31,
	2022		2021













Cash provided from (used for) operating activities	$	397,133	$	371,830

Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold	75,116		61,858
Fixed maturities available for sale—matured or other redemptions	115,160		36,683
Other long-term investments	20,929		3,733
Total investments sold or matured	211,205		102,274
Acquisition of investments:
Fixed maturities—available for sale	(339,145)		(295,869)
Other long-term investments	(122,010)		(65,997)
Total investments acquired	(461,155)		(361,866)
Net (increase) decrease in policy loans	(2,324)		82
Net (increase) decrease in short-term investments	11,801		14,434


Additions to properties	(6,981)		(15,529)

Investments in low-income housing interests	(27,870)		(9,080)
Cash provided from (used for) investing activities	(275,324)		(269,685)

Cash provided from (used for) financing activities:
Issuance of common stock	25,931		32,724
Cash dividends paid to shareholders	(19,687)		(19,511)



Net borrowing (repayment) of commercial paper	42,348		20,001
Acquisition of treasury stock	(119,482)		(132,720)
Net receipts (payments) from deposit-type products	(13,810)		(13,811)
Cash provided from (used for) financing activities	(84,700)		(113,317)

Effect of foreign exchange rate changes on cash	(1,644)		(2,171)
Net increase (decrease) in cash	35,465		(13,343)
Cash at beginning of year	92,163		94,847
Cash at end of period	$	127,628	$	81,504

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 1—Significant Accounting Policies

Business*:* (Globe Life), (the Company), refers to Globe Life Inc., an insurance holding company incorporated in Delaware in 1979, and Globe Life Inc. subsidiaries and affiliates. Globe Life Inc.'s direct or indirect primary subsidiaries are Globe Life And Accident Insurance Company, American Income Life Insurance Company, Liberty National Life Insurance Company, Family Heritage Life Insurance Company of America, and United American Insurance Company. The underwriting companies are owned by their ultimate corporate parent, Globe Life Inc. (the Parent Company).

Globe Life provides a variety of life and supplemental health insurance products and annuities to a broad base of customers. The Company is organized into four reportable segments: life insurance, supplemental health insurance, annuities, and investments.

Basis of Presentation: The accompanying consolidated financial statements of Globe Life have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America (GAAP) for annual financial statements. However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the consolidated financial position at March 31, 2022, and the consolidated results of operations, comprehensive income, and cash flows for the periods ended March 31, 2022 and 2021. The interim period consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Form 10-K filed with the Securities Exchange Commission (SEC) on February 24, 2022.

Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See further documentation in the significant accounting policies or the accompanying notes.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 2—New Accounting Standards


Accounting Pronouncements Yet to be Adopted
Standard	Description	Effective Date	Effect on the Consolidated Financial Statements

ASU No. 2018-12/2019-09/2020-11, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, with clarification guidance issued in November 2019 and 2020.	ASU 2018-12 is a significant change to our current accounting and disclosure of long-duration contracts, which is our primary business. The guidance was primarily issued to: 1) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, 2) simplify and improve the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts, 3) simplify the amortization of deferred acquisition costs, and 4) improve the effectiveness of the required disclosures. On an annual basis, the Company will be required to update cash flow assumptions such as mortality, morbidity, and persistency, which are recorded in net income. On a quarterly basis, the future policy benefits will be remeasured utilizing an upper-medium grade fixed income instrument yield and the effects of the change will be recognized in accumulated other comprehensive income (AOCI).	As a result of the issuance of ASU 2020-11 in November 2020, the effective date for this standard was changed to January 1, 2023. Early adoption is available.	The Company does not expect to early adopt ASU 2018-12 and has selected a modified retrospective transition method upon adoption as of the transition date of January 1, 2021. Due to the overall nature of this standard, the impact on the consolidated financial statements is expected to be significant. At the transition date, the Company expects a significant decrease in accumulated other comprehensive income due to the requirement to re-measure policy liabilities using an interest rate currently lower than what is used in valuing the policy liabilities under existing guidance. In addition, the new guidance requires the removal of interest on our DAC asset and changes the related amortization of the asset. These changes are expected to result in a significant reduction to DAC amortization in the near to intermediate term. While the requirements of the new guidance represent a significant change from existing GAAP, the new guidance will not impact capital and surplus or net income under statutory accounting practices, cash flows on our policies, or the underlying economics of our business. Significant progress has been made by the Company in order to timely adopt the new guidance, including validating computations, establishing proper controls, finalizing accounting policies, and preparing financial disclosures. The Company anticipates providing quantitative estimates of the impact of adoption of the ASU later this year once we have properly tested our models and assumptions and determined the appropriate discount rates.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income

Components of Accumulated Other Comprehensive Income: An analysis of the change in balance by component of Accumulated Other Comprehensive Income is as follows for the three month periods ended March 31, 2022 and 2021:


	Three Months Ended March 31, 2022
	Available for Sale Assets		Deferred Acquisition Costs		Foreign Exchange		Pension Adjustments		Total
Balance at January 1, 2022	$	2,765,290	$	(3,418)	$	19,387	$	(103,676)	$	2,677,583
Other comprehensive income (loss) before reclassifications, net of tax	(1,811,185)		297		3,269		—		(1,807,619)
Reclassifications, net of tax	(3,184)		—		—		2,715		(469)
Other comprehensive income (loss)	(1,814,369)		297		3,269		2,715		(1,808,088)
Balance at March 31, 2022	$	950,921	$	(3,121)	$	22,656	$	(100,961)	$	869,495


	Three Months Ended March 31, 2021
	Available for Sale Assets		Deferred Acquisition Costs		Foreign Exchange		Pension Adjustments		Total
Balance at January 1, 2021	$	3,175,572	$	(4,704)	$	23,302	$	(164,926)	$	3,029,244
Other comprehensive income (loss) before reclassifications, net of tax	(995,098)		284		(482)		—		(995,296)
Reclassifications, net of tax	(13,542)		—		—		4,109		(9,433)
Other comprehensive income (loss)	(1,008,640)		284		(482)		4,109		(1,004,729)
Balance at March 31, 2021	$	2,166,932	$	(4,420)	$	22,820	$	(160,817)	$	2,024,515

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Reclassification Adjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are presented below for the three month periods ended March 31, 2022 and 2021.


	Three Months Ended March 31,			Affected line items in the Statement of Operations
Component Line Item		2022		2021
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses		$	(4,937)	$	(18,790)	Realized (gains) losses

Amortization of (discount) premium		907		1,648		Net investment income
Total before tax		(4,030)		(17,142)
Tax		846		3,600		Income taxes
Total after-tax		(3,184)		(13,542)
Pension adjustments:
Amortization of prior service cost		158		158		Other operating expense
Amortization of actuarial (gain) loss		3,279		5,042		Other operating expense
Total before tax		3,437		5,200
Tax		(722)		(1,091)		Income taxes
Total after-tax		2,715		4,109
Total reclassification (after-tax)		$	(469)	$	(9,433)

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 4—Investments

Portfolio Composition*:* Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance for credit losses at March 31, 2022 and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows. Redeemable preferred stock is included within "Corporates, by sector."


	At March 31, 2022
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value(1)		% of Total Fixed Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	378,985	$	—	$	23,462	$	(717)	$	401,730	2
States, municipalities, and political subdivisions	2,398,188		—		106,675		(195,127)		2,309,736		12
Foreign governments	60,836		—		469		(8,275)		53,030		—
Corporates, by sector:
Financial	4,656,368		—		419,779		(83,808)		4,992,339		26
Utilities	1,913,100		—		251,695		(10,273)		2,154,522		11
Energy	1,586,815		—		178,334		(19,601)		1,745,548		9
Other corporate sectors	6,843,681		—		608,394		(90,200)		7,361,875		39
Total corporates	14,999,964		—		1,458,202		(203,882)		16,254,284		85
Collateralized debt obligations	36,310		—		23,228		—		59,538		—
Other asset-backed securities	101,127		—		491		(829)		100,789		1
Total fixed maturities	$	17,975,410	$	—	$	1,612,527	$	(408,830)	$	19,179,107	100

(1)Amount reported in the balance sheet.

(2)At fair value.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	At December 31, 2021
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value(1)		% of Total Fixed Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	383,083	$	—	$	64,513	$	(164)	$	447,432	2
States, municipalities, and political subdivisions	2,252,997		—		239,135		(2,907)		2,489,225		12
Foreign governments	59,861		—		900		(5,132)		55,629		—
Corporates, by sector:
Financial	4,569,160		(387)		907,741		(9,349)		5,467,165		26
Utilities	1,931,391		—		490,119		(1,012)		2,420,498		11
Energy	1,587,892		—		346,780		(1,683)		1,932,989		9
Other corporate sectors	6,879,459		—		1,454,464		(13,362)		8,320,561		39
Total corporates	14,967,902		(387)		3,199,104		(25,406)		18,141,213		85
Collateralized debt obligations	36,468		—		27,037		—		63,505		—
Other asset-backed securities	104,998		—		3,715		(430)		108,283		1
Total fixed maturities	$	17,805,309	$	(387)	$	3,534,404	$	(34,039)	$	21,305,287	100

(1)Amount reported in the balance sheet.

(2)At fair value.

A schedule of fixed maturities available for sale by contractual maturity date at March 31, 2022, is shown below on an amortized cost basis, net of allowance for credit losses, and on a fair value basis. Actual disposition dates could differ from contractual maturities due to call or prepayment provisions.


	At March 31, 2022
	Amortized Cost, net		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	112,714	$	114,802
Due after one year through five years	989,010		1,050,870
Due after five years through ten years	1,723,492		1,902,841
Due after ten years through twenty years	7,046,768		7,962,921
Due after twenty years	7,965,869		7,987,219
Mortgage-backed and asset-backed securities	137,557		160,454
	$	17,975,410	$	19,179,107

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Analysis of Investment Operations: "Net investment income" for the three month periods ended March 31, 2022 and 2021 is summarized as follows:


	Three Months Ended March 31,
		2022		2021		% Change
Fixed maturities available for sale		$	225,284	$	221,719	2
Policy loans		11,428		11,268		1
Other long-term investments(1)		12,713		8,162		56
Short-term investments		2		4		(50)
		249,427		241,153		3
Less investment expense		(5,593)		(5,333)		5
Net investment income		$	243,834	$	235,820	3

(1) For the three months ended March 31, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $10.7 million and $5.8 million of distributions, respectively in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.

Selected information about sales of fixed maturities available for sale is as follows:


	Three Months Ended March 31,
		2022		2021
Fixed maturities available for sale:
Proceeds from sales(1)		$	75,116	$	61,858
Gross realized gains		773		1,134
Gross realized losses		(3,679)		(12,019)

(1)There were no unsettled sales in the periods ended March 31, 2022 and 2021.

An analysis of "Realized gains (losses)" is as follows:


	Three Months Ended March 31,
		2022		2021
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)		$	4,549	$	15,444

Provision for credit losses		387		3,346
Fair value option—change in fair value		(5,338)		9,885
Other investments		(6,842)		(523)
Realized gains (losses) from investments		(7,244)		28,152



Applicable tax		1,521		(5,912)
Realized gains (losses), net of tax		$	(5,723)	$	22,240

(1)During the three months ended March 31, 2022 and 2021, the Company recorded $0 and $85.8 million of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $25.2 million, respectively in realized gains (losses).

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Fair Value Measurements: The following tables represent the fair value of fixed maturities measured on a recurring basis at March 31, 2022 and December 31, 2021:


	Fair Value Measurement at March 31, 2022 Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—		$	401,730		$	—		$	401,730
States, municipalities, and political subdivisions	—			2,309,736			—			2,309,736
Foreign governments	—			53,030			—			53,030
Corporates, by sector:
Financial	—			4,835,986			156,353			4,992,339
Utilities	—			2,027,154			127,368			2,154,522
Energy	—			1,732,407			13,141			1,745,548
Other corporate sectors	—			7,072,767			289,108			7,361,875
Total corporates	—			15,668,314			585,970			16,254,284
Collateralized debt obligations	—			—			59,538			59,538
Other asset-backed securities	—			100,789			—			100,789
Total fixed maturities	$	—		$	18,533,599		$	645,508		$	19,179,107
Percentage of total	—		%	97		%	3		%	100		%


	Fair Value Measurement at December 31, 2021 Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—		$	447,432		$	—		$	447,432
States, municipalities, and political subdivisions	—			2,489,225			—			2,489,225
Foreign governments	—			55,629			—			55,629
Corporates, by sector:
Financial	—			5,303,547			163,618			5,467,165
Utilities	—			2,266,231			154,267			2,420,498
Energy	—			1,919,416			13,573			1,932,989
Other corporate sectors	—			8,010,331			310,230			8,320,561
Total corporates	—			17,499,525			641,688			18,141,213
Collateralized debt obligations	—			—			63,505			63,505
Other asset-backed securities	—			108,283			—			108,283
Total fixed maturities	$	—		$	20,600,094		$	705,193		$	21,305,287
Percentage of total	—		%	97		%	3		%	100		%

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables represent changes in fixed maturities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


	Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Asset- backed Securities			Collateralized Debt Obligations			Corporates			Total
Balance at January 1, 2022	$	—		$	63,505		$	641,688		$	705,193

Included in realized gains / losses	—			—			—			—
Included in other comprehensive income	—			(3,809)			(36,360)			(40,169)
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			1,123			1			1,124
Other(1)	—			(1,281)			(19,359)			(20,640)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at March 31, 2022	$	—		$	59,538		$	585,970		$	645,508
Percent of total fixed maturities	—		%	—		%	3		%	3		%

(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.

(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.


	Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Asset- backed Securities			Collateralized Debt Obligations			Corporates			Total
Balance at January 1, 2021	$	12,870		$	71,598		$	714,505		$	798,973

Included in realized gains / losses	—			(6,787)			—			(6,787)
Included in other comprehensive income	(1,261)			9,900			(24,135)			(15,496)
Acquisitions	—			—			—			—
Sales	—			(13,213)			—			(13,213)
Amortization	—			1,140			2			1,142
Other(1)	—			(1,337)			(2,028)			(3,365)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at March 31, 2021	$	11,609		$	61,301		$	688,344		$	761,254
Percent of total fixed maturities	—		%	1		%	3		%	4		%

(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table presents changes in unrealized gains or (losses) for the period included in other comprehensive income for assets held at the end of the reporting period for Level 3s:


	Changes in Unrealized Gains (Losses) included in Other Comprehensive Income for Assets Held at the End of the Period
	Asset- backed Securities		Collateralized Debt Obligations		Corporates		Total
At March 31, 2022	$	—	$	(3,809)	$	(36,360)	$	(40,169)
At March 31, 2021	(1,261)		9,900		(24,135)		(15,496)

Unrealized Loss Analysis*:* The following table discloses information about fixed maturities available for sale in an unrealized loss position.


	Less than Twelve Months	Twelve Months or Longer	Total
Number of issues (CUSIPs) held:
As of March 31, 2022	915	54	969
As of December 31, 2021	138	42	180

Globe Life's entire fixed maturity portfolio consisted of 2,091 issues by 876 different issuers at March 31, 2022 and 2,060 issues by 843 different issuers at December 31, 2021. The weighted-average quality rating of all unrealized loss positions at amortized cost was A and A- as of March 31, 2022 and December 31, 2021, respectively.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at March 31, 2022 and December 31, 2021.

Analysis of Gross Unrealized Investment Losses


	At March 31, 2022
	Less than Twelve Months				Twelve Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	27,111	$	(271)	$	3,591	$	(446)	$	30,702	$	(717)
States, municipalities and political subdivisions	1,308,081		(193,624)		4,630		(1,503)		1,312,711		(195,127)
Foreign governments	7,738		(959)		25,506		(7,316)		33,244		(8,275)
Corporates, by sector:
Financial	889,046		(62,791)		54,507		(8,343)		943,553		(71,134)
Utilities	257,824		(8,762)		4,736		(1,106)		262,560		(9,868)
Energy	236,413		(13,801)		—		—		236,413		(13,801)
Other corporate sectors	1,003,128		(65,334)		64,580		(14,433)		1,067,708		(79,767)
Total corporates	2,386,411		(150,688)		123,823		(23,882)		2,510,234		(174,570)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	44,651		(569)		—		—		44,651		(569)
Total investment grade securities	3,773,992		(346,111)		157,550		(33,147)		3,931,542		(379,258)

Below investment grade securities:
States, municipalities and political subdivisions	—		—		—		—		—		—

Corporates, by sector:
Financial	56,133		(4,293)		54,149		(8,381)		110,282		(12,674)
Utilities	14,690		(405)		—		—		14,690		(405)
Energy	26,871		(718)		22,996		(5,082)		49,867		(5,800)
Other corporate sectors	41,377		(2,624)		24,854		(7,809)		66,231		(10,433)
Total corporates	139,071		(8,040)		101,999		(21,272)		241,070		(29,312)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		13,102		(260)		13,102		(260)
Total below investment grade securities	139,071		(8,040)		115,101		(21,532)		254,172		(29,572)
Total fixed maturities	$	3,913,063	$	(354,151)	$	272,651	$	(54,679)	$	4,185,714	$	(408,830)

Gross unrealized losses may fluctuate quarter over quarter due to adverse factors in the market that affect our holdings, such as changes in interest rates or credit spreads. The Company considers many factors when determining whether an allowance for a credit loss should be recorded. While the Company holds securities that may be in an unrealized loss position from time to time, Globe Life does not generally intend to sell and it is likely that management will not be required to sell the fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Analysis of Gross Unrealized Investment Losses


	At December 31, 2021
	Less than Twelve Months				Twelve Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	118	$	(1)	$	3,867	$	(163)	$	3,985	$	(164)
States, municipalities and political subdivisions	141,310		(2,824)		2,436		(83)		143,746		(2,907)
Foreign governments	12,567		(561)		23,144		(4,571)		35,711		(5,132)
Corporates, by sector:
Financial	133,654		(1,507)		52,864		(1,932)		186,518		(3,439)
Utilities	25,447		(692)		2,372		(320)		27,819		(1,012)
Energy	6,519		(238)		—		—		6,519		(238)
Other corporate sectors	115,444		(3,566)		40,249		(3,670)		155,693		(7,236)
Total corporates	281,064		(6,003)		95,485		(5,922)		376,549		(11,925)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	10,489		(16)		1		—		10,490		(16)
Total investment grade securities	445,548		(9,405)		124,933		(10,739)		570,481		(20,144)

Below investment grade securities:
States, municipalities and political subdivisions	—		—		—		—		—		—

Corporates, by sector:
Financial	15,695		(272)		56,897		(5,638)		72,592		(5,910)
Utilities	—		—		—		—		—		—
Energy	—		—		26,639		(1,445)		26,639		(1,445)
Other corporate sectors	700		(11)		26,581		(6,115)		27,281		(6,126)
Total corporates	16,395		(283)		110,117		(13,198)		126,512		(13,481)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		13,043		(414)		13,043		(414)
Total below investment grade securities	16,395		(283)		123,160		(13,612)		139,555		(13,895)
Total fixed maturities	$	461,943	$	(9,688)	$	248,093	$	(24,351)	$	710,036	$	(34,039)

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Fixed Maturities, Allowance for Credit Losses*:* A summary of the activity in the allowance for credit losses is as follows.


	Three Months Ended March 31,
		2022		2021
Allowance for credit losses beginning balance		$	387	$	3,346
Additions to allowance for which credit losses were not previously recorded		—		—
Additions (reductions) to allowance for fixed maturities that previously had an allowance		—		—
Reduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period		(387)		(3,346)
Allowance for credit losses ending balance		$	—	$	—

As of March 31, 2022 and December 31, 2021, the Company did not have any fixed maturities in non-accrual status.

Other Long-Term Investments*:* Other long-term investments consist of the following assets:



	March 31, 2022		December 31, 2021
Investment funds	$	732,360	$	640,263
Commercial mortgage loan participations	144,074		141,843
Other	13,335		11,819
Total	$	889,769	$	793,925

The following table presents additional information about the Company's investment funds as of March 31, 2022 and December 31, 2021 at fair value:



	Fair Value				Unfunded Commitments
Investment Category	March 31, 2022		December 31, 2021		March 31, 2022		Redemption Term/Notice




Commercial mortgage loans	$	409,918	$	423,776	$	254,876	Fully redeemable and non-redeemable with varying terms.
Opportunistic credit	173,058		178,215		—		Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.




Other	149,384		38,272		103,264		Fully redeemable with varying terms and non-redeemable.
Total investment funds	$	732,360	$	640,263	$	358,140

The Company had $118 million of capital called during the quarter from existing investment funds, reducing our unfunded commitments. Our unfunded commitments were $358 million as of March 31, 2022.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Commercial Mortgage Loan Participations (commercial mortgage loans): Summaries of commercial mortgage loans by property type and geographical location at March 31, 2022 and December 31, 2021 are as follows:


	March 31, 2022			December 31, 2021
	Carrying Value		% of Total	Carrying Value		% of Total
Property type:
Mixed use	$	60,396	42	$	57,996	41
Hospitality	23,161		16	23,186		16
Retail	19,860		14	19,811		14
Industrial	17,900		13	17,900		13
Multi-family	14,770		10	14,872		11
Office	8,814		6	8,905		6

Total recorded investment	144,901		101	142,670		101
Less allowance for credit losses	(827)		(1)	(827)		(1)
Carrying value, net of allowance for credit losses	$	144,074	100	$	141,843	100


	March 31, 2022			December 31, 2021
	Carrying Value		% of Total	Carrying Value		% of Total
Geographic location:
California	$	69,167	48	$	67,659	48
New York	18,551		13	18,373		13
Pennsylvania	11,673		8	11,673		8
Indiana	9,717		7	9,717		7
Florida	8,246		6	8,213		6
Texas	5,960		4	5,898		4
Other	21,587		15	21,137		15
Total recorded investment	144,901		101	142,670		101
Less allowance for credit losses	(827)		(1)	(827)		(1)
Carrying value, net of allowance for credit losses	$	144,074	100	$	141,843	100

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables are reflective of Management's internal risk ratings of the loan portfolio. Loans are rated low, moderate, and high. The risk categories consider many different factors such as quality of asset, borrower status, as well as macroeconomic factors including COVID-19. These loans, originated in 2017 to 2020, are transitional or under construction and may not yet be income producing. Certain ratios, such as loan to value and debt service coverage ratios, may not be evaluated as the value of the underlying transitional property significantly fluctuates based on completion of the project.


	Net Book Value of Commercial Mortgage Loans Receivable by Year of Origination
	As of March 31, 2022
Risk Rating:	Number of Loans	2022		2021		2020		2019		2018		2017		Total
Low	14	$	—	$	—	$	25,045	$	12,509	$	41,151	$	35,851	$	114,556
Moderate	6	—		—		1,297		17,434		—		—		18,731
High	2	—		—		—		4,597		7,017		—		11,614
Total commercial mortgage loans	22	$	—	$	—	$	26,342	$	34,540	$	48,168	$	35,851	144,901
Less allowance for credit losses on the investment pool														(827)
Less allowance for credit losses on individual loans														—
Carrying value, net of valuation allowance														$	144,074


	Net Book Value of Commercial Mortgage Loans Receivable by Year of Origination
	As of December 31, 2021
Risk Rating:	Number of Loans	2021		2020		2019		2018		2017		Total
Low	14	$	—	$	23,636	$	11,925	$	41,209	$	35,729	$	112,499
Moderate	6	—		1,400		17,173		—		—		18,573
High	2	—		—		4,593		7,005		—		11,598
Total commercial mortgage loans	22	$	—	$	25,036	$	33,691	$	48,214	$	35,729	142,670
Less allowance for credit losses on the investment pool												(827)
Less allowance for credit losses on individual loans												—
Carrying value, net of valuation allowance												$	141,843

As of March 31, 2022, the Company evaluated the commercial mortgage loan portfolio on a pool basis to determine the allowance for credit losses. At the end of the period, the Company had 22 loans in the portfolio. For the three months ended March 31, 2022, the allowance for credit losses remained at $827 thousand. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.


	Three Months Ended March 31,
	2022		2021
Allowance for credit losses beginning balance	$	827	$	3,505

Provision (reversal) for credit losses	—		(1,358)

Allowance for credit losses ending balance	$	827	$	2,147

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

There were no delinquent commercial mortgage loans as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, the Company had one commercial mortgage loan in non-accrual status, which could result in foreclosure during 2022. The outstanding principal balance of this loan was $4.6 million as of March 31, 2022 and December 31, 2021. The Company's unfunded commitment balance to commercial loan borrowers was $27 million as of March 31, 2022.

Note 5—Commitments and Contingencies

Guarantees: The Parent Company has guaranteed letters of credit in connection with its credit facility with a group of banks. The letters of credit were issued by TMK Re, Ltd., a wholly-owned subsidiary, to secure TMK Re, Ltd.’s obligation for claims on certain policies reinsured by TMK Re, Ltd. that were sold by other Globe Life insurance subsidiaries. These letters of credit facilitate TMK Re, Ltd.’s ability to reinsure the business of Globe Life's insurance carriers. The agreement was amended on September 30, 2021 and now expires in 2026. The maximum amount of letters of credit available is $250 million. The Parent Company would be liable to the extent that TMK Re, Ltd. does not pay the reinsured party. The amount outstanding at March 31, 2022 was $125 million.

Litigation: Globe Life Inc. (formerly Torchmark Corporation) and its subsidiaries, in common with the insurance industry in general, are subject to litigation, including putative class action litigation, alleged breaches of contract, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of agents of the Parent Company's insurance subsidiaries, employment discrimination, and miscellaneous other causes of action. Based upon information presently available, and in light of legal and other factual defenses available to the Parent Company and its subsidiaries, management does not believe that it is reasonably possible that such litigation will have a material adverse effect on Globe Life's financial condition, future operating results or liquidity; however, assessing the eventual outcome of litigation necessarily involves forward-looking speculation as to judgments to be made by judges, juries and appellate courts in the future. This bespeaks caution, particularly in states with reputations for high punitive damage verdicts. Globe Life's management recognizes that large punitive damage awards bearing little or no relation to actual damages continue to be awarded by juries in jurisdictions in which the Company has substantial business, creating the potential for unpredictable material adverse judgments in any given punitive damage suit.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 6—Liability for Unpaid Claims

Activity in the liability for unpaid health claims is summarized as follows:


	March 31, 2022		December 31, 2021

Balance at beginning of period	$	167,832	$	162,261
Incurred related to:
Current year	176,953		638,054
Prior year	(12,008)		(22,477)
Total incurred	164,945		615,577
Paid related to:
Current year	70,775		487,096
Prior year	89,235		122,910
Total paid	160,010		610,006
Balance at end of period	$	172,767	$	167,832

Below is the reconciliation of the liability of *"*Policy claims and other benefits payable" in the Condensed Consolidated Balance Sheets.


	March 31, 2022		December 31, 2021

Policy claims and other benefits payable:
Life insurance	$	260,786	$	245,108
Health insurance	172,767		167,832
Total	$	433,553	$	412,940

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 7—Postretirement Benefits

Globe Life has qualified noncontributory defined benefit pension plans (Pension Plans) and contributory savings plans that cover substantially all employees. There is also a nonqualified noncontributory supplemental executive retirement plan (SERP) that covers a limited number of officers. The tables included herein will focus on the Pension Plans and SERP.

Pension Assets: The following table presents the assets of the Company's Pension Plans at March 31, 2022 and December 31, 2021.

Pension Assets by Component at March 31, 2022


	Fair Value Determined by:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Amount		% to Total
Corporate bonds:
Financial	$	—	$	47,184	$	—	$	47,184	8
Utilities	—		39,148		—		39,148		7
Energy	—		20,916		—		20,916		4
Other corporates	—		79,311		—		79,311		14
Total corporate bonds	—		186,559		—		186,559		33
Exchange traded fund(1)	300,244		—		—		300,244		55
Other bonds	—		223		—		223		—
Guaranteed annuity contract(2)	—		34,863		—		34,863		6
Short-term investments	12,075		—		—		12,075		2
Other	8,192		—		—		8,192		1
	$	320,511	$	221,645	$	—	542,156		97
Other long-term investments(3)							15,545		3
Total pension assets							$	557,701	100

(1)A fund including marketable securities that mirror the S&P 500 index.

(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Non-Exempt Employees Defined Benefit Pension Plan ("American Income Pension Plan").

(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns less than 1% of the investment fund. As of March 31, 2022, the expected term of the investment fund is approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Pension Assets by Component at December 31, 2021


	Fair Value Determined by:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Amount		% to Total
Corporate bonds:
Financial	$	—	$	52,522	$	—	$	52,522	9
Utilities	—		43,663		—		43,663		7
Energy	—		22,719		—		22,719		4
Other corporates	—		88,673		—		88,673		15
Total corporate bonds	—		207,577		—		207,577		35
Exchange traded fund(1)	315,720		—		—		315,720		52
Other bonds	—		239		—		239		—
Guaranteed annuity contract(2)	—		34,743		—		34,743		6
Short-term investments	13,731		—		—		13,731		2
Other	10,388		—		—		10,388		2
	$	339,839	$	242,559	$	—	582,398		97
Other long-term investments(3)							15,149		3
Total pension assets							$	597,547	100

(1)A fund including marketable securities that mirror the S&P 500 index.

(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns approximately 1% of the investment fund. As of December 31, 2021, the expected term of the investment fund was approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.

SERP: The following table includes information regarding the SERP.


	Three Months Ended March 31,
	2022		2021
Premiums paid for insurance coverage	$	443	$	443

	March 31, 2022		December 31, 2021
Total investments:
Company owned life insurance	$	53,572	$	52,791
Exchange traded funds	80,685		87,133
	$	134,257	$	139,924

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Pension Plans and SERP Liabilities: The following table presents liabilities for the defined benefit pension plans and SERP at March 31, 2022 and December 31, 2021.


	March 31, 2022		December 31, 2021
Pension Plans	$	651,861	$	686,917
SERP	91,725		92,017
Pension benefit obligation	$	743,586	$	778,934

Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the Pension Plans and SERP by expense components for the three months ended March 31, 2022 and 2021.

Components of Net Periodic Benefit Cost


	Three Months Ended March 31,
		2022		2021
Service cost		$	8,655	$	7,918
Interest cost		6,123		5,467
Expected return on assets		(8,885)		(8,083)
Amortization:
Prior service cost		158		158
Actuarial (gain) loss		3,209		4,985


Net periodic benefit cost		$	9,260	$	10,445

Note 8—Earnings Per Share

Earnings per Share*:* A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:


	Three Months Ended March 31,
		2022	2021
Basic weighted average shares outstanding		99,273,616	103,482,944
Weighted average dilutive options outstanding		976,758	1,354,773
Diluted weighted average shares outstanding		100,250,374	104,837,717

Antidilutive shares		563,991	1,836,559

Antidilutive shares are excluded from the calculation of diluted earnings per share.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 9—Debt

The following table presents information about the terms and outstanding balances of Globe Life's debt.

Selected Information about Debt Issues


				As of
				March 31, 2022								December 31, 2021
Instrument	Issue Date	Maturity Date	Coupon Rate	Par Value		Unamortized Discount & Issuance Costs		Book Value		Fair Value		Book Value
Senior notes	5/27/1993	5/15/2023	7.875%	$	165,612	$	(327)	$	165,285	$	174,991	$	165,216
Senior notes(1)	9/24/2012	9/15/2022	3.800%	150,000		(161)		149,839		151,500		149,752
Senior notes	9/27/2018	9/15/2028	4.550%	550,000		(4,888)		545,112		576,906		544,949
Senior notes	8/21/2020	8/15/2030	2.150%	400,000		(4,111)		395,889		358,344		395,778

Junior subordinated debentures	11/17/2017	11/17/2057	5.275%	125,000		(1,601)		123,399		127,150		123,396
Junior subordinated debentures	6/14/2021	6/15/2061	4.250%	325,000		(7,827)		317,173		288,340		317,155
				1,715,612		(18,915)		1,696,697		1,677,231		1,696,246
Less current maturity of long-term debt(1)				150,000		(161)		149,839		151,500		149,752
Total long-term debt				1,565,612		(18,754)		1,546,858		1,525,731		1,546,494

Current maturity of long-term debt(1)				150,000		(161)		149,839		151,500		149,752
Commercial paper				372,524		(284)		372,240		372,240		329,892
Total short-term debt				522,524		(445)		522,079		523,740		479,644

Total debt				$	2,088,136	$	(19,199)	$	2,068,937	$	2,049,471	$	2,026,138

(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.

The commercial paper has the highest priority of all the debt, followed by senior notes then junior subordinated debentures. The senior notes due 2023 are noncallable, the remaining senior notes are callable under a make-whole provision, and the junior subordinated debentures are subject to an optional redemption five years from issuance. Interest on the 4.25% junior subordinated debentures is payable quarterly while all other long-term debt is payable semi-annually.

Federal Home Loan Bank (FHLB) Funding*:* In 2021, four of our insurance subsidiaries became members of the FHLB of Dallas. FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements. The membership requires ownership of FHLB common stock, as well as the purchase of activity-based common stock equal to 4.1% of outstanding borrowings.

Globe Life owns $9.4 million in FHLB common stock as of March 31, 2022 and $7.9 million as of December 31, 2021. The FHLB stock is restricted for the duration of the membership and recorded at cost (par) as required by applicable guidance. The FHLB stock is included in "Other long-term investments*"* in the Condensed Consolidated Balance Sheets and activity is recorded in "Net receipts (payments) from deposit-type products" in the Condensed Consolidated Statement of Cash Flows.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

As of March 31, 2022, there were no outstanding borrowings with the FHLB. Borrowings with the FHLB are subject to the availability of pledged assets at Globe Life. As of March 31, 2022, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $545 million, based on pledged assets with a fair value of $705 million.

Note 10—Business Segments

Globe Life is organized into four segments: life insurance, supplemental health insurance, annuities, and investments. In addition, other expenses not included in these segments are reported in "Corporate & Other."

Globe Life's reportable insurance segments are based on the insurance product lines it markets and administers: life insurance, supplemental health insurance, and annuities. These major product lines are set out as reportable segments because of the common characteristics of products within these categories, comparability of margins, and the similarity in regulatory environment and management techniques. There is also an investment segment which manages the investment portfolio, debt, and cash flow for the insurance segments and the corporate function. The Company's chief operating decision makers evaluate the overall performance of the operations of the Company in accordance with these segments.

Life insurance products marketed by Globe Life include traditional whole life and term life insurance. An immaterial amount of annuities sold as companion products are included in the life segment. Health insurance products are generally guaranteed renewable and include Medicare Supplement, critical illness, accident, and limited-benefit supplemental hospital and surgical coverage. Annuities include fixed-benefit contracts.

Globe Life markets its insurance products through a number of distribution channels, each of which sells the products of one or more of Globe Life's insurance segments. Our distribution channels consist of the following exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National) and Family Heritage Division (Family Heritage); an independent agency, United American Division (United American); and our Direct to Consumer Division (Direct to Consumer). The tables below present segment premium revenue by each of Globe Life's distribution channels.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Premium Income by Distribution Channel


	Three Months Ended March 31, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	369,987	49	$	28,854	9	$	—	—	$	398,841	37
Direct to Consumer	251,126		33	18,756		6	—		—	269,882		25
Liberty National	80,719		11	47,186		15	—		—	127,905		12
United American	2,059		—	132,664		42	—		—	134,723		13
Family Heritage	1,369		—	89,540		28	—		—	90,909		8
Other	49,342		7	—		—	—		—	49,342		5
	$	754,602	100	$	317,000	100	$	—	—	$	1,071,602	100


	Three Months Ended March 31, 2021
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	334,895	47	$	27,351	9	$	—	—	$	362,246	36
Direct to Consumer	244,028		35	19,360		7	—		—	263,388		26
Liberty National	75,737		11	47,040		16	—		—	122,777		12
United American	2,277		—	117,087		40	1		100	119,365		12
Family Heritage	1,118		—	83,335		28	—		—	84,453		9
Other	50,064		7	—		—	—		—	50,064		5
	$	708,119	100	$	294,173	100	$	1	100	$	1,002,293	100

Due to the nature of the life insurance industry, Globe Life has no individual or group that would be considered a major customer. Substantially all of Globe Life's business is conducted in the United States.

The measure of profitability established by the chief operating decision makers for the insurance segments is underwriting margin before other income and administrative expenses, in accordance with the manner in which the segments are managed. It essentially represents gross profit margin on insurance products before insurance administrative expenses and consists primarily of premium less net policy benefits, acquisition expenses, and commissions. Required interest on net policy liabilities (benefit reserves less deferred acquisition costs) is reflected as a component of the Investment segment (rather than as a component of underwriting margin in the insurance and annuity segments) in order to match this cost with the investment income earned on the assets supporting the net policy liabilities.

The measure of profitability for the Investment segment is excess investment income, representing the income earned on the investment portfolio in excess of net policy requirements and financing costs associated with Globe Life's debt. Other than the above-mentioned interest allocations, no other intersegment revenues or expenses are recognized. Expenses directly attributable to corporate operations are included in the “Corporate & Other” category. Stock-based compensation expense is considered a corporate expense by Globe Life management and is included in this category. All other unallocated revenues and expenses on a pretax basis, including insurance administrative expense, are also included in the “Corporate & Other” segment category.

Globe Life holds a sizable investment portfolio to support its insurance liabilities, the yield from which is used to offset policy benefit, acquisition, administrative and tax expenses. This yield or investment income is taken into account when establishing premium rates and profitability expectations for its insurance products. From time to time, investments are sold or called, or experience a credit loss event, each of which is reflected by the Company as

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

realized gain (loss)—investments. These gains or losses generally occur as a result of disposition due to issuer calls, compliance with Company investment policies, or other reasons often beyond management’s control. Unlike investment income, realized gains and losses are incidental to insurance operations, and only overall yields are considered when setting premium rates or insurance product profitability expectations. While these gains and losses are not relevant to segment profitability or core operating results, they can have a material positive or negative result on net income. For these reasons, management removes realized investment gains and losses when it views its segment operations.

Management removes items that are related to prior periods when evaluating the operating results of current periods. Management also removes non-operating items unrelated to the Company's core insurance activities when evaluating those results. Therefore, these items are excluded in its presentation of segment results, because accounting guidance requires that operating segment results be presented as management views its business. With the exception of the administrative settlements noted in the paragraphs above, all of these items are included in “Other operating expense” in the Condensed Consolidated Statements of Operations for the appropriate year. See additional detail below in the tables.

The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note—1 Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.


	Three Months Ended March 31, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	754,602	$	317,000	$	—	$	—	$	—	$	—		$	1,071,602
Net investment income	—		—		—		243,834		—		—			243,834
Other income	—		—		—		—		164		—			164
Total revenue	754,602		317,000		—		243,834		164		—			1,315,600
Expenses:
Policy obligations	549,343		196,855		7,050		—		—		—			753,248
Required interest on reserves	(189,709)		(26,865)		(9,672)		226,246		—		—			—
Required interest on DAC	56,232		7,463		53		(63,748)		—		—			—
Amortization of acquisition costs	126,079		31,852		453		—		—		—			158,384
Commissions, premium taxes, and non-deferred acquisition costs	62,203		28,602		8		—		—		—			90,813
Insurance administrative expense(1)	—		—		—		—		72,565		112		(2)	72,677
Parent expense	—		—		—		—		2,640		—			2,640
Stock-based compensation expense	—		—		—		—		9,035		—			9,035
Interest expense	—		—		—		19,944		—		—			19,944
Total expenses	604,148		237,907		(2,108)		182,442		84,240		112			1,106,741
Subtotal	150,454		79,093		2,108		61,392		(84,076)		(112)			208,859
Non-operating items	—		—		—		—		—		112		(2)	112
Measure of segment profitability (pretax)	$	150,454	$	79,093	$	2,108	$	61,392	$	(84,076)	$	—		208,971

Realized gain (loss)—investments														(7,244)



Non-operating expenses														(112)
Income before income taxes per Condensed Consolidated Statements of Operations														$	201,615

(1)Administrative expense is not allocated to insurance segments.

(2) Non-operating expenses.

GL Q1 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Three Months Ended March 31, 2021
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	708,119	$	294,173	$	1	$	—	$	—	$	—		$	1,002,293
Net investment income	—		—		—		235,820		—		—			235,820
Other income	—		—		—		—		295		—			295
Total revenue	708,119		294,173		1		235,820		295		—			1,238,408
Expenses:
Policy obligations	517,631		187,829		7,259		—		—		—			712,719
Required interest on reserves	(179,925)		(24,995)		(10,005)		214,925		—		—			—
Required interest on DAC	53,795		6,962		70		(60,827)		—		—			—
Amortization of acquisition costs	123,304		29,207		482		—		—		—			152,993
Commissions, premium taxes, and non-deferred acquisition costs	56,668		22,990		8		—		—		—			79,666
Insurance administrative expense(1)	—		—		—		—		66,176		4,828		(2)	71,004
Parent expense	—		—		—		—		2,318		—			2,318
Stock-based compensation expense	—		—		—		—		7,888		—			7,888
Interest expense	—		—		—		21,178		—		—			21,178
Total expenses	571,473		221,993		(2,186)		175,276		76,382		4,828			1,047,766
Subtotal	136,646		72,180		2,187		60,544		(76,087)		(4,828)			190,642
Non-operating items	—		—		—		—		—		4,828		(2)	4,828
Measure of segment profitability (pretax)	$	136,646	$	72,180	$	2,187	$	60,544	$	(76,087)	$	—		195,470

Realized gain (loss)—investments														28,152


Legal proceedings														(4,828)

Income before income taxes per Condensed Consolidated Statements of Operations														$	218,794

(1)Administrative expense is not allocated to insurance segments.

(2)Legal proceedings.

GL Q1 2022 FORM 10-Q

CAUTIONARY STATEMENTS

We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission. Any statement that is not a historical fact, or that might otherwise be considered an opinion or projection concerning the Company or its business, whether express or implied, is meant as and should be considered a forward-looking statement. Such statements represent management's opinions concerning future operations, strategies, financial results or other developments. We specifically disclaim any obligation to update or revise any forward-looking statement because of new information, future developments, or otherwise.

Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the COVID-19 pandemic and associated direct and indirect effects on our business operations, financial results and financial condition. If these estimates or assumptions prove to be incorrect, the actual results of Globe Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance industry generally, or applicable to the Company specifically. Such events or developments could include, but are not necessarily limited to:

1.Economic and other conditions, including the impact of inflation and the COVID-19 pandemic on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions;

2.Regulatory developments, including changes in accounting standards or governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);

3.Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;

4.Interest rate changes that affect product sales and/or investment portfolio yield;

5.General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from the COVID-19 pandemic, particularly in certain industries that may comprise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities;

6.Changes in the competitiveness of the Company's products and pricing;

7.Litigation results;

8.Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from operating during the COVID-19 pandemic and the impact of higher than anticipated inflation);

9.The ability to obtain timely and appropriate premium rate increases for health insurance policies from our regulators;

10.The customer response to new products and marketing initiatives;

11.Reported amounts in the consolidated financial statements which are based on management estimates and judgments which may differ from the actual amounts ultimately realized;

12.Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems;

13.The severity, magnitude and impact of natural or man-made catastrophic events, including but not limited to pandemics, tornadoes, hurricanes, earthquakes, war and terrorism, on our operations and personnel, commercial activity and demand for our products; and

14.Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period.

Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission.

GL Q1 2022 FORM 10-Q

GLOBE LIFE INC.

Management's Discussion & Analysis

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