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)



	September 30, 2022		December 31, 2021
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2022—$18,173,471; 2021—$17,805,309, allowance for credit losses: 2022— $0; 2021— $387)	$	16,005,140	$	21,305,287
Policy loans	605,426		589,634
Other long-term investments (includes: 2022—$748,219; 2021—$640,263 under the fair value option)	907,390		793,925
Short-term investments	85,773		69,145
Total investments	17,603,729		22,757,991
Cash	85,586		92,163
Accrued investment income	269,212		251,307
Other receivables	475,363		487,443
Deferred acquisition costs	5,162,172		4,914,728
Goodwill	481,791		481,791
Other assets	760,935		782,625

Total assets	$	24,838,788	$	29,768,048
Liabilities:
Future policy benefits	$	16,556,827	$	16,034,727
Unearned and advance premium	64,223		65,472
Policy claims and other benefits payable	417,739		412,940
Other policyholders' funds	103,161		98,935
Total policy liabilities	17,141,950		16,612,074
Current and deferred income taxes	568,282		1,765,021
Short-term debt	434,737		479,644
Long-term debt (estimated fair value: 2022—$1,445,523; 2021—$1,667,009)	1,627,547		1,546,494
Other liabilities	704,674		722,009

Total liabilities	20,477,190		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	540,636		520,564
Accumulated other comprehensive income (loss)	(1,811,549)		2,677,583
Retained earnings	6,633,369		6,182,100
Treasury stock, at cost: (2022—12,225,433 shares; 2021—9,650,845 shares)	(1,110,076)		(846,659)
Total shareholders' equity	4,361,598		8,642,806
Total liabilities and shareholders' equity	$	24,838,788	$	29,768,048

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollar amounts in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Life premium	$	755,115	$	728,924	$	2,269,641	$	2,165,213
Health premium	319,289		299,143		955,478		888,902
Other premium	1		—		1		1
Total premium	1,074,405		1,028,067		3,225,120		3,054,116
Net investment income	245,625		238,975		733,101		713,103
Realized gains (losses)	(29,155)		10,475		(66,845)		47,286

Other income	398		321		861		1,004
Total revenue	1,291,273		1,277,838		3,892,237		3,815,509

Benefits and expenses:
Life policyholder benefits	494,627		516,196		1,555,004		1,532,298
Health policyholder benefits	198,415		187,906		592,488		564,589
Other policyholder benefits	6,986		7,303		21,110		21,848
Total policyholder benefits	700,028		711,405		2,168,602		2,118,735

Amortization of deferred acquisition costs	156,129		151,593		469,718		452,607
Commissions, premium taxes, and non-deferred acquisition costs	93,028		82,774		277,436		244,752
Other operating expense	88,140		80,385		262,150		240,750
Interest expense	23,965		20,886		65,737		63,833
Total benefits and expenses	1,061,290		1,047,043		3,243,643		3,120,677

Income before income taxes	229,983		230,795		648,594		694,832
Income tax benefit (expense)	(43,204)		(41,924)		(120,450)		(127,826)



Net income	$	186,779	$	188,871	$	528,144	$	567,006




Basic net income per common share	$	1.92	$	1.86	$	5.38	$	5.53




Diluted net income per common share	$	1.90	$	1.84	$	5.33	$	5.46

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollar amounts in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	186,779	$	188,871	$	528,144	$	567,006

Other comprehensive income (loss):

Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period	(1,368,910)		(95,906)		(5,704,042)		(453,917)

Other reclassification adjustments included in net income	12,142		(14,599)		30,371		(31,096)
Foreign exchange adjustment on fixed maturities recorded at fair value	2,856		(519)		4,975		4,141



Total unrealized investment gains (losses)	(1,353,912)		(111,024)		(5,668,696)		(480,872)
Less applicable tax (expense) benefit	284,319		23,317		1,190,428		100,984
Unrealized gains (losses) on investments, net of tax	(1,069,593)		(87,707)		(4,478,268)		(379,888)

Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costs	4,699		432		11,154		1,199
Less applicable tax (expense) benefit	(988)		(91)		(2,343)		(252)
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax	3,711		341		8,811		947

Foreign exchange translation:
Foreign exchange translation adjustments, other than securities	(21,379)		(6,839)		(35,220)		(1,276)
Less applicable tax (expense) benefit	4,488		1,437		7,395		269
Foreign exchange translation adjustments, other than securities, net of tax	(16,891)		(5,402)		(27,825)		(1,007)

Pension:



Pension adjustments	3,438		5,198		10,316		15,598
Less applicable tax (expense) benefit	(721)		(1,090)		(2,166)		(3,275)
Pension adjustments, net of tax	2,717		4,108		8,150		12,323

Other comprehensive income (loss)	(1,080,056)		(88,660)		(4,489,132)		(367,625)
Comprehensive income (loss)	$	(893,277)	$	100,211	$	(3,960,988)	$	199,381

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 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

Comprehensive income (loss)	—		—		—		(1,600,988)		177,004		—		(1,423,984)
Common dividends declared ($0.2075 per share)	—		—		—		—		(20,238)		—		(20,238)
Acquisition of treasury stock	—		—		—		—		—		(143,939)		(143,939)
Stock-based compensation	—		—		8,448		—		—		—		8,448
Exercise of stock options	—		—		—		—		(2,419)		11,222		8,803

Balance at June 30, 2022	—		109,218		531,516		(731,493)		6,469,956		(1,056,087)		5,323,110



Comprehensive income (loss)	—		—		—		(1,080,056)		186,779		—		(893,277)
Common dividends declared ($0.2075 per share)	—		—		—		—		(20,126)		—		(20,126)
Acquisition of treasury stock	—		—		—		—		—		(72,031)		(72,031)
Stock-based compensation	—		—		9,120		—		—		—		9,120
Exercise of stock options	—		—		—		—		(3,240)		18,042		14,802

Balance at September 30, 2022	$	—	$	109,218	$	540,636	$	(1,811,549)	$	6,633,369	$	(1,110,076)	$	4,361,598

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Shareholders' Equity (Continued)

(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, 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

Comprehensive income (loss)	—		—		—		725,764		199,618		—		925,382
Common dividends declared ($0.1975 per share)	—		—		—		—		(20,171)		—		(20,171)
Acquisition of treasury stock	—		—		—		—		—		(162,864)		(162,864)
Stock-based compensation	—		—		8,634		—		—		—		8,634
Exercise of stock options	—		—		—		—		(14,033)		47,637		33,604

Balance at June 30, 2021	—		113,218		524,647		2,750,279		6,185,966		(957,188)		8,616,922



Comprehensive income (loss)	—		—		—		(88,660)		188,871		—		100,211
Common dividends declared ($0.1975 per share)	—		—		—		—		(19,981)		—		(19,981)
Acquisition of treasury stock	—		—		—		—		—		(97,796)		(97,796)
Stock-based compensation	—		—		9,036		—		(1,260)		—		7,776
Exercise of stock options	—		—		—		—		(335)		1,354		1,019

Balance at September 30, 2021	$	—	$	113,218	$	533,683	$	2,661,619	$	6,353,261	$	(1,053,630)	$	8,608,151

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar amounts in thousands)


	Nine Months Ended September 30,
	2022		2021













Cash provided from (used for) operating activities	$	1,050,387	$	1,060,022

Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold	346,722		91,795
Fixed maturities available for sale—matured or other redemptions	387,787		249,653
Other long-term investments	55,877		36,060
Total investments sold or matured	790,386		377,508
Acquisition of investments:
Fixed maturities—available for sale	(1,178,751)		(687,993)
Other long-term investments	(186,275)		(206,609)
Total investments acquired	(1,365,026)		(894,602)
Net (increase) decrease in policy loans	(15,792)		(1,412)
Net (increase) decrease in short-term investments	(16,628)		14,418


Additions to properties	(19,766)		(30,730)
Other investing activities	—		(59,200)
Investments in low-income housing interests	(64,023)		(35,236)
Cash provided from (used for) investing activities	(690,849)		(629,254)

Cash provided from (used for) financing activities:
Issuance of common stock	49,536		67,347
Cash dividends paid to shareholders	(60,441)		(60,068)
Repayment of debt	(150,000)		(300,000)
Proceeds from issuance of debt	250,492		325,000
Payment for debt issuance costs	(5,272)		(7,639)
Net borrowing (repayment) of commercial paper	(60,582)		(10,991)
Acquisition of treasury stock	(335,452)		(393,380)
Net receipts (payments) from deposit-type products	(66,078)		(48,276)
Cash provided from (used for) financing activities	(377,797)		(428,007)

Effect of foreign exchange rate changes on cash	11,682		(1,283)
Net increase (decrease) in cash	(6,577)		1,478
Cash at beginning of year	92,163		94,847
Cash at end of period	$	85,586	$	96,325

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q3 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 condensed 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 condensed consolidated financial position at September 30, 2022, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended September 30, 2022 and 2021. The interim period condensed 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 Q3 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

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 the accounting and disclosure of long-duration life and health insurance contracts. The guidance was issued primarily 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.

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; however, the Company will not early adopt the standard and has selected the modified retrospective transition method upon adoption as of the transition date (“Transition Date”) of January 1, 2021. The modified retrospective transition method requires the amended guidance be applied to contracts issued after the beginning of the earliest period presented, or the Transition Date, which will result in the restatement of the 2021 and 2022 consolidated financial statements.

In summary, the Company continues to assess the impact the adoption will have on the consolidated financial statements and has determined it will have a significant impact on the Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Shareholders’ Equity, and the Consolidated Statements of Comprehensive Income (Loss). On a quarterly basis, the Company’s 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”), a component of shareholders’ equity. At least annually, the Company will update its estimate of cash flows used for establishing reserves using actual historical experience and updated future cash flow assumptions, such as mortality, morbidity, and persistency. Finally, the adoption requires changes in the future treatment of our Deferred Acquisition Cost (“DAC”) asset and is expected to result in a significant reduction to DAC amortization in the near to intermediate term.

On the Transition Date, the Company expects a decrease in AOCI due to the requirement to re-measure future policy benefits using a discount rate currently lower than what is used in valuing the future policy benefits under existing guidance. The methodology for determining current discount rates consists of constructing a discount rate curve intended to be reflective of the currency and tenor of the insurance liability cash flows. Discount rates reflect upper-medium grade fixed-income instrument yields, which generally consist of single-A rated fixed income instruments. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets denominated in the same currency as the policies. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company will use estimation techniques consistent with the fair value guidance in ASC 820. It is important to note that the impact to AOCI is sensitive to the discount rate assumption and associated fluctuations.

On the Transition Date, using current discount rates applicable at that time, we expect the after-tax impact to AOCI to be a decrease in the range of $7.5 billion to $8.5 billion due to a $9.5 billion to $11.0 billion increase in future policy benefits. Holding all else equal but using discount rates as of September 30, 2022, the increase in future policy benefits would have been $1.2 billion to $2.0 billion. Under the new standard, the future policy benefits recorded on the Consolidated Balance Sheets are different than those used in the determination of net income. Future policy benefits recorded within the Consolidated Balance Sheets are determined using current discount rates as of the valuation date, while future policy benefits used for the determination of net income are determined using locked-in discount rates1 based on policy issue dates. On the Transition Date, two significant drivers of the increase in future policy benefits and decrease in AOCI within the Consolidated Balance Sheets are the lower level of current discount rates as compared to the locked-in discount rates used under prior guidance and the long average life of

1 Locked-in discount rates are those discount rates which are established at issue and locked-in for each year of issue for use in establishing reserves to compute net income.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

the Company’s life insurance cash flows. Another driver of the large increase in future policy benefits is the required use of the same net premium ratio2 using locked-in discount rates and current discount rates.

The new guidance requires a more granular assessment of the net premium ratio. Any blocks of business that require increases in future policy benefits to minimum levels, or that have a net premium ratio greater than 100%, will require an adjustment to the opening balance of retained earnings (decrease). At the Transition Date, we expect a $15 million to $50 million, net of tax, decrease to opening retained earnings related to these items.

Under the new standard, the annual amortization of DAC in our Consolidated Statements of Operations will be significantly lower in the near and intermediate term due to: 1) the requirement to no longer defer renewal commissions until such year as the commissions are actually incurred, 2) the requirement to no longer accrue and amortize interest on our DAC balances, and 3) the modification of the method for amortizing DAC including the updating of assumptions. For business with deferrals of renewal commissions, as is the case with our captive agency channels, the expected amortization rate, as a percentage of premium, for certain blocks of business will no longer be level but will increase over the period of time during which commissions are deferred. The decrease in amortization in the near term will primarily impact our life insurance line of business. In total, we expect the impact on net income from the decrease in amortization to be in the range of $120 million to $145 million, net of tax, related to the restatement of prior periods. As time progresses, we expect this impact to diminish as the deferral of future renewal commissions increases amortization amounts.

Policyholder benefits, as reported in our Consolidated Statement of Operations, will be restated in 2021 and 2022 under the new guidance. It is expected to be lower in 2021 and 2022, resulting in higher net income for those respective periods than under the current guidance. Going forward, fluctuations in experience and changes in assumptions will result in changes in both future policy obligations and amortization of DAC as a percent of premium.

While the requirements of the new guidance represent a 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.

ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

ASU 2022-03 adds disclosure requirements specific to equity securities subject to contractual sale restrictions. The disclosures clarify the nature of the contractual sale as well as the duration of the restriction and the circumstances that could cause a lapse in the restriction.

This standard is effective for the Company on January 1, 2024, and will be implemented on a prospective basis. Early adoption is available. The Company does not expect the standard will have a material impact on the Consolidated Financial Statements.

2 The net premium ratio is the ratio between the present value of benefits and the present value of gross premium.

GL Q3 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 and nine month periods ended September 30, 2022 and 2021:



	Three Months Ended September 30, 2022
	Available for Sale Assets		Deferred Acquisition Costs		Foreign Exchange		Pension Adjustments		Total
Balance at July 1, 2022	$	(643,385)	$	1,682	$	8,453	$	(98,243)	$	(731,493)
Other comprehensive income (loss) before reclassifications, net of tax	(1,079,185)		3,711		(16,891)		—		(1,092,365)
Reclassifications, net of tax	9,592		—		—		2,717		12,309
Other comprehensive income (loss)	(1,069,593)		3,711		(16,891)		2,717		(1,080,056)
Balance at September 30, 2022	$	(1,712,978)	$	5,393	$	(8,438)	$	(95,526)	$	(1,811,549)



	Three Months Ended September 30, 2021
	Available for Sale Assets		Deferred Acquisition Costs		Foreign Exchange		Pension Adjustments		Total
Balance at July 1, 2021	$	2,883,391	$	(4,098)	$	27,697	$	(156,711)	$	2,750,279
Other comprehensive income (loss) before reclassifications, net of tax	(76,174)		341		(5,402)		—		(81,235)
Reclassifications, net of tax	(11,533)		—		—		4,108		(7,425)
Other comprehensive income (loss)	(87,707)		341		(5,402)		4,108		(88,660)
Balance at September 30, 2021	$	2,795,684	$	(3,757)	$	22,295	$	(152,603)	$	2,661,619


	Nine Months Ended September 30, 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	(4,502,261)		8,811		(27,825)		—		(4,521,275)
Reclassifications, net of tax	23,993		—		—		8,150		32,143
Other comprehensive income (loss)	(4,478,268)		8,811		(27,825)		8,150		(4,489,132)
Balance at September 30, 2022	$	(1,712,978)	$	5,393	$	(8,438)	$	(95,526)	$	(1,811,549)


	Nine Months Ended September 30, 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	(355,322)		947		(1,007)		—		(355,382)
Reclassifications, net of tax	(24,566)		—		—		12,323		(12,243)
Other comprehensive income (loss)	(379,888)		947		(1,007)		12,323		(367,625)
Balance at September 30, 2021	$	2,795,684	$	(3,757)	$	22,295	$	(152,603)	$	2,661,619

GL Q3 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 and nine month periods ended September 30, 2022 and 2021.



	Three Months Ended September 30,				Nine Months Ended September 30,				Affected line items in the Statement of Operations
Component Line Item	2022		2021		2022		2021
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses	$	12,256	$	(16,269)	$	29,741	$	(35,925)	Realized (gains) losses

Amortization of (discount) premium	(114)		1,670		630		4,829		Net investment income
Total before tax	12,142		(14,599)		30,371		(31,096)
Tax	(2,550)		3,066		(6,378)		6,530		Income taxes
Total after-tax	9,592		(11,533)		23,993		(24,566)
Pension adjustments:
Amortization of prior service cost	158		158		474		474		Other operating expense
Amortization of actuarial (gain) loss	3,280		5,040		9,842		15,124		Other operating expense
Total before tax	3,438		5,198		10,316		15,598
Tax	(721)		(1,090)		(2,166)		(3,275)		Income taxes
Total after-tax	2,717		4,108		8,150		12,323
Total reclassification (after-tax)	$	12,309	$	(7,425)	$	32,143	$	(12,243)

Note 4—Investments

Portfolio Composition*:* Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance for credit losses at September 30, 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 September 30, 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	$	389,357	$	—	$	2	$	(36,510)	$	352,849	2
States, municipalities, and political subdivisions	2,739,017		—		24,724		(598,476)		2,165,265		14
Foreign governments	50,144		—		42		(10,277)		39,909		—
Corporates, by sector:
Financial	4,818,454		—		49,913		(552,378)		4,315,989		27
Utilities	1,906,747		—		30,252		(144,762)		1,792,237		11
Energy	1,466,551		—		14,281		(135,922)		1,344,910		8
Other corporate sectors	6,677,566		—		49,208		(866,795)		5,859,979		37
Total corporates	14,869,318		—		143,654		(1,699,857)		13,313,115		83
Collateralized debt obligations	36,721		—		13,874		—		50,595		—
Other asset-backed securities	88,914		—		5		(5,512)		83,407		1
Total fixed maturities	$	18,173,471	$	—	$	182,301	$	(2,350,632)	$	16,005,140	100

(1)Amount reported in the balance sheet.

(2)At fair value.

GL Q3 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 September 30, 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 September 30, 2022
	Amortized Cost, net		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	162,473	$	163,087
Due after one year through five years	1,020,894		1,021,499
Due after five years through ten years	1,716,490		1,695,969
Due after ten years through twenty years	7,477,686		6,932,181
Due after twenty years	7,670,293		6,058,402
Mortgage-backed and asset-backed securities	125,635		134,002
	$	18,173,471	$	16,005,140

GL Q3 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 and nine month periods ended September 30, 2022 and 2021 is summarized as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2022		2021		% Change	2022		2021		% Change
Fixed maturities available for sale	$	227,673	$	223,287	2	$	679,710	$	668,284	2
Policy loans	11,716		11,376		3	34,724		33,968		2
Other long-term investments(1)	10,933		9,390		16	34,349		26,432		30
Short-term investments	969		10			1,093		20
	251,291		244,063		3	749,876		728,704		3
Less investment expense	(5,666)		(5,088)		11	(16,775)		(15,601)		8
Net investment income	$	245,625	$	238,975	3	$	733,101	$	713,103	3

(1)For the three months ended September 30, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $8.4 million and $7.1 million of distributions, respectively, in net investment income. For the nine months ended September 30, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $27.7 million and $19.4 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Fixed maturities available for sale:
Proceeds from sales(1)	$	127,695	$	17,085	$	346,722	$	91,795
Gross realized gains	165		304		938		1,438
Gross realized losses	(11,537)		—		(56,384)		(12,101)

(1)There were no unsettled sales in the periods ended September 30, 2022 and 2021.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)	$	(12,256)	$	16,269	$	(30,128)	$	32,578

Provision for credit losses	—		—		387		3,346
Fair value option—change in fair value	(11,551)		1,585		(15,942)		14,013
Other investments	(5,348)		1,935		(21,162)		6,663
Realized gains (losses) from investments	(29,155)		19,789		(66,845)		56,600
Realized loss on redemption of debt	—		(9,314)		—		(9,314)
Total realized gains (losses)	(29,155)		10,475		(66,845)		47,286
Applicable tax	6,122		(2,200)		14,037		(9,930)
Realized gains (losses), net of tax	$	(23,033)	$	8,275	$	(52,808)	$	37,356

(1)During the three months ended September 30, 2022 and 2021, the Company recorded $22.1 million and $0 of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $0, respectively, in realized gains (losses). During the nine months ended September 30, 2022 and 2021, the Company recorded $24.0 million and $108.3 million of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $25.2 million, respectively, in realized gains (losses).

GL Q3 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 September 30, 2022 and December 31, 2021:


	Fair Value Measurement at September 30, 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	$	—		$	352,849		$	—		$	352,849
States, municipalities, and political subdivisions	—			2,165,265			—			2,165,265
Foreign governments	—			39,909			—			39,909
Corporates, by sector:
Financial	—			4,202,350			113,639			4,315,989
Utilities	—			1,681,228			111,009			1,792,237
Energy	—			1,333,105			11,805			1,344,910
Other corporate sectors	—			5,611,867			248,112			5,859,979
Total corporates	—			12,828,550			484,565			13,313,115
Collateralized debt obligations	—			—			50,595			50,595
Other asset-backed securities	—			83,407			—			83,407
Total fixed maturities	$	—		$	15,469,980		$	535,160		$	16,005,140
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 Q3 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	—			(13,163)			(114,525)			(127,688)
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			3,382			6			3,388
Other(1)	—			(3,129)			(42,604)			(45,733)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2022	$	—		$	50,595		$	484,565		$	535,160
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	(82)			(6,787)			2,733			(4,136)
Included in other comprehensive income	63			12,482			(15,346)			(2,801)
Acquisitions	—			—			25,000			25,000
Sales	(12,851)			(13,213)			—			(26,064)
Amortization	—			3,388			8			3,396
Other(1)	—			(4,307)			(72,730)			(77,037)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2021	$	—		$	63,161		$	654,170		$	717,331
Percent of total fixed maturities	—		%	—		%	3		%	3		%

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

GL Q3 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 September 30, 2022	$	—	$	(13,163)	$	(114,525)	$	(127,688)
At September 30, 2021	63		12,482		(15,346)		(2,801)

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 September 30, 2022	1,886	122	2,008
As of December 31, 2021	138	42	180

Globe Life's entire fixed maturity portfolio consisted of 2,275 issues by 957 different issuers at September 30, 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- as of September 30, 2022 and December 31, 2021.

GL Q3 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 September 30, 2022 and December 31, 2021.

Analysis of Gross Unrealized Investment Losses


	At September 30, 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	$	349,350	$	(35,764)	$	3,416	$	(746)	$	352,766	$	(36,510)
States, municipalities and political subdivisions	1,728,650		(562,887)		52,359		(35,589)		1,781,009		(598,476)
Foreign governments	5,754		(142)		23,983		(10,135)		29,737		(10,277)
Corporates, by sector:
Financial	2,895,779		(490,451)		75,439		(27,653)		2,971,218		(518,104)
Utilities	1,114,356		(135,376)		20,829		(6,416)		1,135,185		(141,792)
Energy	958,397		(125,270)		—		—		958,397		(125,270)
Other corporate sectors	4,378,481		(799,054)		80,275		(37,894)		4,458,756		(836,948)
Total corporates	9,347,013		(1,550,151)		176,543		(71,963)		9,523,556		(1,622,114)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	61,532		(4,177)		9,712		(711)		71,244		(4,888)
Total investment grade securities	11,492,299		(2,153,121)		266,013		(119,144)		11,758,312		(2,272,265)

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

Corporates, by sector:
Financial	127,557		(18,081)		39,446		(16,193)		167,003		(34,274)
Utilities	27,925		(2,970)		—		—		27,925		(2,970)
Energy	14,220		(2,453)		19,868		(8,199)		34,088		(10,652)
Other corporate sectors	167,639		(25,403)		6,861		(4,444)		174,500		(29,847)
Total corporates	337,341		(48,907)		66,175		(28,836)		403,516		(77,743)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		12,083		(624)		12,083		(624)
Total below investment grade securities	337,341		(48,907)		78,258		(29,460)		415,599		(78,367)
Total fixed maturities	$	11,829,640	$	(2,202,028)	$	344,271	$	(148,604)	$	12,173,911	$	(2,350,632)

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 Q3 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 Q3 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 September 30,				Nine Months Ended September 30,
	2022		2021		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 September 30, 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:



	September 30, 2022		December 31, 2021
Investment funds	$	748,219	$	640,263
Commercial mortgage loan participations	140,069		141,843
Other	19,102		11,819
Total	$	907,390	$	793,925

The following table presents additional information about the Company's investment funds as of September 30, 2022 and December 31, 2021 at fair value:



	Fair Value				Unfunded Commitments
Investment Category	September 30, 2022		December 31, 2021		September 30, 2022		Redemption Term/Notice




Commercial mortgage loans	$	425,189	$	423,776	$	354,361	Fully redeemable and non-redeemable with varying terms.
Opportunistic credit	159,972		178,215		—		Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.


Infrastructure	149,532		22,664		30,338		Fully redeemable and non-redeemable with varying terms.


Other	13,526		15,608		127,500
Total investment funds	$	748,219	$	640,263	$	512,199

The Company had $165 million of capital called during the year from existing investment funds. Our unfunded commitments were $512 million as of September 30, 2022.

GL Q3 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 September 30, 2022 and December 31, 2021 are as follows:



	September 30, 2022			December 31, 2021
	Carrying Value		% of Total	Carrying Value		% of Total
Property type:
Mixed use	$	62,239	45	$	57,996	41
Hospitality	20,767		15	23,186		16
Retail	19,423		14	19,811		14
Industrial	17,308		12	17,900		13
Multi-family	14,386		10	14,872		11
Office	8,106		6	8,905		6

Total recorded investment	142,229		102	142,670		101
Less allowance for credit losses	(2,160)		(2)	(827)		(1)
Carrying value, net of allowance for credit losses	$	140,069	100	$	141,843	100


	September 30, 2022			December 31, 2021
	Carrying Value		% of Total	Carrying Value		% of Total
Geographic location:
California	$	68,698	49	$	67,659	48
New York	19,452		14	18,373		13
Pennsylvania	11,673		8	11,673		8
Indiana	9,717		7	9,717		7
Florida	8,279		6	8,213		6
Texas	6,136		5	5,898		4
Other	18,274		13	21,137		15
Total recorded investment	142,229		102	142,670		101
Less allowance for credit losses	(2,160)		(2)	(827)		(1)
Carrying value, net of allowance for credit losses	$	140,069	100	$	141,843	100

GL Q3 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 2022, 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 September 30, 2022
Risk Rating:	Number of Loans	2022		2021		2020		2019		2018		2017		Total
Low	14	$	3,000	$	—	$	27,181	$	12,337	$	35,462	$	36,188	$	114,168
Moderate	5	—		—		1,195		15,722		—		—		16,917
High	2	—		—		—		4,110		7,034		—		11,144
Total commercial mortgage loans	21	$	3,000	$	—	$	28,376	$	32,169	$	42,496	$	36,188	142,229
Less allowance for credit losses on the investment pool														(1,151)
Less allowance for credit losses on individual loans														(1,009)
Carrying value, net of valuation allowance														$	140,069


	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 September 30, 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 21 loans in the portfolio. For the nine months ended September 30, 2022, the allowance for credit losses increased $1.3 million. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Allowance for credit losses beginning balance	$	1,109	$	1,639	$	827	$	3,505

Provision (reversal) for credit losses	1,051		(455)		1,333		(2,321)

Allowance for credit losses ending balance	$	2,160	$	1,184	$	2,160	$	1,184

As of September 30, 2022 and December 31, 2021, the Company had one commercial mortgage loan in non-accrual status, which went into foreclosure during the year. The outstanding principal balance of this loan was $4.1 million as of September 30, 2022 and December 31, 2021. Among the remaining commercial mortgage loans, none were delinquent as of September 30, 2022 and December 31, 2021. The Company's unfunded commitment balance to commercial loan borrowers was $21 million as of September 30, 2022.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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 September 30, 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, worker misclassification, 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 Parent Company's insurance subsidiaries have substantial business, creating the potential for unpredictable material adverse judgments in any given punitive damage suit.

On February 27, 2020, putative collective action litigation was filed against American Income in United States District Court for the Western District of Pennsylvania (Berry, et al v. American Income Life Insurance Company, et al, Case No. 2:20-cv-00110-LPL). The plaintiffs, former insurance sales agents of American Income, pursued relief on behalf of “all individuals who trained to become and/or worked as sales agents/insurance producers for American Income Life Insurance” in the three years prior to the filing of the complaint. The lawsuit alleged that agent trainees and insurance agents should have been classified as employees. It asserted a national collective action under the Fair Labor Standards Act and sought compensation for minimum wage, overtime, expense reimbursement, missed meal and rest breaks, recoupment of certain commissions and improper recordkeeping. In addition, the lawsuit asserted a class action under the Pennsylvania Minimum Wage Act and Pennsylvania Wage Payment and Collection Law seeking similar relief. Plaintiffs also sought liquidated damages and attorney’s fees, and asserted an unjust enrichment claim. On September 20, 2020, American Income’s motion to compel arbitration of the plaintiffs’ individual claims was granted. Thereafter, the parties negotiated the settlement of such claims for a non-material amount, individually and in the aggregate. The case was then dismissed by the Court on May 20, 2022 pursuant to a joint stipulation filed by the parties.

GL Q3 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:


	September 30, 2022		December 31, 2021

Balance at beginning of period	$	167,832	$	162,261
Incurred related to:
Current year	508,415		638,054
Prior year	(14,117)		(22,477)
Total incurred	494,298		615,577
Paid related to:
Current year	359,486		487,096
Prior year	124,805		122,910
Total paid	484,291		610,006
Balance at end of period	$	177,839	$	167,832

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


	September 30, 2022		December 31, 2021

Policy claims and other benefits payable:
Life insurance	$	239,900	$	245,108
Health insurance	177,839		167,832
Total	$	417,739	$	412,940

GL Q3 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 September 30, 2022 and December 31, 2021.

Pension Assets by Component at September 30, 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		% of Total
Corporate bonds:
Financial	$	—	$	39,536	$	—	$	39,536	8
Utilities	—		33,005		—		33,005		7
Energy	—		17,439		—		17,439		4
Other corporates	—		59,738		—		59,738		12
Total corporate bonds	—		149,718		—		149,718		31
Exchange traded fund(1)	239,191		—		—		239,191		49
Other bonds	—		201		—		201		—
Guaranteed annuity contract(2)	—		43,433		—		43,433		9
Short-term investments	28,311		—		—		28,311		6
Other	7,538		—		—		7,538		2
	$	275,040	$	193,352	$	—	468,392		97
Other long-term investments(3)							14,237		3
Total pension assets							$	482,629	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 Collective Bargaining Agreement Employees 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 September 30, 2022, the expected term of the investment fund is approximately 2 years and the commitment of the investment is fully funded. The investment is non-redeemable.

GL Q3 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		% of 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.


	Nine Months Ended September 30,
	2022		2021
Premiums paid for insurance coverage	$	443	$	2,193

	September 30, 2022		December 31, 2021
Total investments:
Company owned life insurance	$	54,274	$	52,791
Exchange traded funds	68,643		87,133
	$	122,917	$	139,924

GL Q3 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 September 30, 2022 and December 31, 2021.


	September 30, 2022		December 31, 2021
Pension Plans	$	517,293	$	686,917
SERP	92,050		92,017
Pension benefit obligation	$	609,343	$	778,934

The decline in the pension benefit obligation is primarily a result of an increase in the discount rate as well as contributions made during the year.

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 and nine months ended September 30, 2022 and 2021.

Components of Net Periodic Benefit Cost


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Service cost	$	8,657	$	7,919	$	25,968	$	23,755
Interest cost	6,124		5,467		18,368		16,403
Expected return on assets	(8,885)		(8,083)		(26,655)		(24,249)
Amortization:
Prior service cost	158		158		474		474
Actuarial (gain) loss	3,208		4,984		9,625		14,953


Net periodic benefit cost	$	9,262	$	10,445	$	27,780	$	31,336

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 September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Basic weighted average shares outstanding	97,258,349	101,498,408	98,244,271	102,618,327
Weighted average dilutive options outstanding	889,175	882,609	857,964	1,171,159
Diluted weighted average shares outstanding	98,147,524	102,381,017	99,102,235	103,789,486

Antidilutive shares	2,602,609	2,601,499	2,351,522	2,349,321

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

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 9—Debt

On May 19, 2022, Globe Life completed the issuance of $400 million principal amount of 4.8% Senior notes due June 15, 2032, of which $150 million is owned by Globe Life affiliates. Total proceeds received by the Parent from the issuance, net of the underwriters’ discount, were $395 million. The proceeds were used to fund $300 million of 3.8% Senior notes, of which $150 million was owned by Globe life affiliates, that matured on September 15, 2022, as well as for the reduction of commercial paper and other general corporate purposes.

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

Selected Information about Debt Issues


				As of
				September 30, 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	$	(185)	$	165,427	$	167,781	$	165,216
Senior notes(2)	—	—	—	—		—		—		—		149,752
Senior notes	9/27/2018	9/15/2028	4.550%	550,000		(4,562)		545,438		526,702		544,949
Senior notes	8/21/2020	8/15/2030	2.150%	400,000		(3,891)		396,109		310,560		395,778
Senior notes(1)	5/19/2022	6/15/2032	4.800%	250,000		(4,616)		245,384		231,700		—

Junior subordinated debentures	11/17/2017	11/17/2057	5.275%	125,000		(1,594)		123,406		124,016		123,396
Junior subordinated debentures	6/14/2021	6/15/2061	4.250%	325,000		(7,790)		317,210		252,545		317,155
				1,815,612		(22,638)		1,792,974		1,613,304		1,696,246
Less current maturity of long-term debt				165,612		(185)		165,427		167,781		149,752
Total long-term debt				1,650,000		(22,453)		1,627,547		1,445,523		1,546,494

Current maturity of long-term debt)				165,612		(185)		165,427		167,781		149,752
Commercial paper				270,000		(690)		269,310		269,310		329,892
Total short-term debt				435,612		(875)		434,737		437,091		479,644

Total debt				$	2,085,612	$	(23,328)	$	2,062,284	$	1,882,614	$	2,026,138

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

(2)The $300 million of 3.80% Senior notes matured on September 15, 2022, of which $150 million was owned by Globe Life affiliates.

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)**: 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 approximately 4.1% of outstanding borrowings.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Globe Life owns $13.0 million in FHLB common stock as of September 30, 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 .

As of September 30, 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 September 30, 2022, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $526 million, based on pledged assets with a fair value of $737 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 following tables present segment premium revenue by each of Globe Life's distribution channels.

Premium Income by Distribution Channel



	Three Months Ended September 30, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	378,306	50	$	29,694	9	$	—	—	$	408,000	38
Direct to Consumer	242,550		32	17,455		6	—		—	260,005		24
Liberty National	82,072		11	45,809		14	—		—	127,881		12
United American	1,949		—	134,200		42	1		100	136,150		13
Family Heritage	1,408		—	92,131		29	—		—	93,539		9
Other	48,830		7	—		—	—		—	48,830		4
	$	755,115	100	$	319,289	100	$	1	100	$	1,074,405	100

GL Q3 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 September 30, 2021
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	356,456	49	$	29,070	10	$	—	—	$	385,526	37
Direct to Consumer	240,578		33	18,192		6	—		—	258,770		25
Liberty National	78,528		11	46,716		16	—		—	125,244		12
United American	2,199		—	118,240		39	—		—	120,439		12
Family Heritage	1,286		—	86,925		29	—		—	88,211		9
Other	49,877		7	—		—	—		—	49,877		5
	$	728,924	100	$	299,143	100	$	—	—	$	1,028,067	100


	Nine Months Ended September 30, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	1,124,712	50	$	87,940	9	$	—	—	$	1,212,652	38
Direct to Consumer	743,041		33	53,802		6	—		—	796,843		25
Liberty National	244,242		11	139,650		15	—		—	383,892		12
United American	6,022		—	401,657		42	1		100	407,680		13
Family Heritage	4,147		—	272,429		28	—		—	276,576		8
Other	147,477		6	—		—	—		—	147,477		4
	$	2,269,641	100	$	955,478	100	$	1	100	$	3,225,120	100


	Nine Months Ended September 30, 2021
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	1,039,047	48	$	85,210	10	$	—	—	$	1,124,257	37
Direct to Consumer	734,046		34	56,002		6	—		—	790,048		26
Liberty National	232,118		11	140,874		16	—		—	372,992		12
United American	6,737		—	351,544		39	1		100	358,282		12
Family Heritage	3,630		—	255,272		29	—		—	258,902		8
Other	149,635		7	—		—	—		—	149,635		5
	$	2,165,213	100	$	888,902	100	$	1	100	$	3,054,116	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

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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 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.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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 September 30, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	755,115	$	319,289	$	1	$	—	$	—	$	—		$	1,074,405
Net investment income	—		—		—		245,625		—		—			245,625
Other income	—		—		—		—		398		—			398
Total revenue	755,115		319,289		1		245,625		398		—			1,320,428
Expenses:
Policy benefits	494,627		198,415		6,974		12		—		—			700,028
Required interest on reserves	(194,279)		(27,637)		(9,548)		231,464		—		—			—
Required interest on DAC	58,413		7,783		47		(66,243)		—		—			—
Amortization of acquisition costs	124,261		31,415		453		—		—		—			156,129
Commissions, premium taxes, and non-deferred acquisition costs	63,938		29,085		5		—		—		—			93,028
Insurance administrative expense(1)	—		—		—		—		75,048		1,416		(2)	76,464
Parent expense	—		—		—		—		2,556		—			2,556
Stock-based compensation expense	—		—		—		—		9,120		—			9,120
Interest expense	—		—		—		23,965		—		—			23,965
Total expenses	546,960		239,061		(2,069)		189,198		86,724		1,416			1,061,290
Subtotal	208,155		80,228		2,070		56,427		(86,326)		(1,416)			259,138
Non-operating items	—		—		—		—		—		1,416		(2)	1,416
Measure of segment profitability (pretax)	$	208,155	$	80,228	$	2,070	$	56,427	$	(86,326)	$	—		260,554

Realized gain (loss)—investments														(29,155)

Legal proceedings														(1,416)

Income before income taxes per Condensed Consolidated Statements of Operations														$	229,983

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

(2)Legal proceedings.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Three Months Ended September 30, 2021
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	728,924	$	299,143	$	—	$	—	$	—	$	—		$	1,028,067
Net investment income	—		—		—		238,975		—		—			238,975
Other income	—		—		—		—		321		—			321
Total revenue	728,924		299,143		—		238,975		321		—			1,267,363
Expenses:
Policy obligations	516,196		187,906		7,303		—		—		—			711,405
Required interest on reserves	(185,295)		(25,859)		(10,034)		221,188		—		—			—
Required interest on DAC	55,066		7,203		64		(62,333)		—		—			—
Amortization of acquisition costs	122,311		28,799		483		—		—		—			151,593
Commissions, premium taxes, and non-deferred acquisition costs	58,652		24,116		6		—		—		—			82,774
Insurance administrative expense(1)	—		—		—		—		68,036					68,036
Parent expense	—		—		—		—		2,176		2,397		(2)	4,573
Stock-based compensation expense	—		—		—		—		7,776		—			7,776
Interest expense	—		—		—		20,886		—		—			20,886
Total expenses	566,930		222,165		(2,178)		179,741		77,988		2,397			1,047,043
Subtotal	161,994		76,978		2,178		59,234		(77,667)		(2,397)			220,320
Non-operating items	—		—		—		—		—		2,397		(2)	2,397
Measure of segment profitability (pretax)	$	161,994	$	76,978	$	2,178	$	59,234	$	(77,667)	$	—		222,717

Realized gain (loss)—investments														19,789
Realized loss—redemption of debt														(9,314)

Non-operating expenses														(2,397)
Income before income taxes per Condensed Consolidated Statements of Operations														$	230,795

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

(2)Non-operating expenses.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Nine Months Ended September 30, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	2,269,641	$	955,478	$	1	$	—	$	—	$	—		$	3,225,120
Net investment income	—		—		—		733,101		—		—			733,101
Other income	—		—		—		—		861		—			861
Total revenue	2,269,641		955,478		1		733,101		861		—			3,959,082
Expenses:
Policy obligations	1,555,004		592,488		21,098		12		—		—			2,168,602
Required interest on reserves	(575,710)		(81,740)		(28,890)		686,340		—		—			—
Required interest on DAC	171,288		22,808		149		(194,245)		—		—			—
Amortization of acquisition costs	372,872		95,488		1,358		—		—		—			469,718
Commissions, premium taxes, and non-deferred acquisition costs	190,028		87,390		18		—		—		—			277,436
Insurance administrative expense(1)	—		—		—		—		221,313		6,513		(2,3)	227,826
Parent expense	—		—		—		—		8,089		(368)		(3)	7,721
Stock-based compensation expense	—		—		—		—		26,603		—			26,603
Interest expense	—		—		—		65,737		—		—			65,737
Total expenses	1,713,482		716,434		(6,267)		557,844		256,005		6,145			3,243,643
Subtotal	556,159		239,044		6,268		175,257		(255,144)		(6,145)			715,439
Non-operating items	—		—		—		—		—		6,145		(2,3)	6,145
Measure of segment profitability (pretax)	$	556,159	$	239,044	$	6,268	$	175,257	$	(255,144)	$	—		721,584

Realized gain (loss)—investments														(66,845)


Legal proceedings														(1,416)
Non-operating expenses														(4,729)
Income before income taxes per Condensed Consolidated Statements of Operations														$	648,594

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

(2)Legal proceedings.

(3) Non-operating expenses.

GL Q3 2022 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Nine Months Ended September 30, 2021
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	2,165,213	$	888,902	$	1	$	—	$	—	$	—		$	3,054,116
Net investment income	—		—		—		713,103		—		—			713,103
Other income	—		—		—		—		1,004		—			1,004
Total revenue	2,165,213		888,902		1		713,103		1,004		—			3,768,223
Expenses:
Policy obligations	1,532,298		564,589		21,848		—		—		—			2,118,735
Required interest on reserves	(547,715)		(76,288)		(30,055)		654,058		—		—			—
Required interest on DAC	163,083		21,242		200		(184,525)		—		—			—
Amortization of acquisition costs	366,022		85,138		1,447		—		—		—			452,607
Commissions, premium taxes, and non-deferred acquisition costs	174,130		70,602		20		—		—		—			244,752
Insurance administrative expense(1)	—		—		—		—		201,715		5,089		(2)	206,804
Parent expense	—		—		—		—		7,251		2,397		(3)	9,648
Stock-based compensation expense	—		—		—		—		24,298		—			24,298
Interest expense	—		—		—		63,833		—		—			63,833
Total expenses	1,687,818		665,283		(6,540)		533,366		233,264		7,486			3,120,677
Subtotal	477,395		223,619		6,541		179,737		(232,260)		(7,486)			647,546
Non-operating items	—		—		—		—		—		7,486		(2,3)	7,486
Measure of segment profitability (pretax)	$	477,395	$	223,619	$	6,541	$	179,737	$	(232,260)	$	—		655,032

Realized gain (loss)—investments														56,600
Realized loss—redemption of debt														(9,314)

Legal proceedings														(5,089)
Non-operating expenses														(2,397)
Income before income taxes per Condensed Consolidated Statements of Operations														$	694,832

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

(2)Legal proceedings.

(3)Non-operating expenses.

GL Q3 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 Q3 2022 FORM 10-Q

GLOBE LIFE INC.

Management's Discussion & Analysis

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