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, 2023		December 31, 2022
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2023—$18,526,703; 2022—$18,301,692, allowance for credit losses: 2023— $32,767; 2022— $0)	$	17,206,885	$	16,503,365
Policy loans	622,736		614,866
Other long-term investments (includes: 2023—$789,197; 2022—$768,689 under the fair value option)	1,022,611		976,016
Short-term investments	74,377		114,121
Total investments	18,926,609		18,208,368
Cash	172,108		92,559
Accrued investment income	279,445		259,581
Other receivables	594,421		589,079
Deferred acquisition costs	5,654,438		5,535,697
Goodwill	481,791		481,791
Other assets	751,311		760,066
Total assets	$	26,860,123	$	25,927,141
Liabilities:
Future policy benefits at current discount rates: (at original rates: 2023—$16,442,516; 2022—$16,306,870)	$	18,896,574	$	18,040,042
Unearned and advance premium	271,517		253,140
Policy claims and other benefits payable	489,296		507,219
Other policyholders' funds	142,686		123,236
Total policy liabilities	19,800,073		18,923,637
Current and deferred income taxes	427,608		434,649
Short-term debt	514,247		449,103
Long-term debt (estimated fair value: 2023—$1,484,172; 2022—$1,440,277)	1,628,354		1,627,952
Other liabilities	643,550		542,223
Total liabilities	23,013,832		21,977,564
Commitments and Contingencies (Note 5)
Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2023 and 2022	—		—
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2023—105,218,183 issued; 2022—105,218,183 issued)	105,218		105,218
Additional paid-in-capital	528,639		529,661
Accumulated other comprehensive income (loss)	(2,961,093)		(2,790,313)
Retained earnings	7,092,544		6,894,535
Treasury stock, at cost: (2023—9,489,745 shares; 2022—8,478,288 shares)	(919,017)		(789,524)
Total shareholders' equity	3,846,291		3,949,577
Total liabilities and shareholders' equity	$	26,860,123	$	25,927,141

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2023 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,
		2023		2022
Revenue:
Life premium		$	772,597	$	749,128
Health premium		322,493		315,684
Other premium		—		—
Total premium		1,095,090		1,064,812
Net investment income		257,105		244,894
Realized gains (losses)		(30,927)		(7,244)

Other income		50		164
Total revenue		1,321,318		1,302,626

Benefits and expenses:
Life policyholder benefits (net of remeasurement (gain) loss: 2023—$(2,697); 2022—$5,783)		507,977		495,429
Health policyholder benefits (net of remeasurement (gain) loss: 2023—$2,038; 2022—$(1,959))		190,962		189,018
Other policyholder benefits		8,988		9,702
Total policyholder benefits		707,927		694,149

Amortization of deferred acquisition costs		92,322		84,496
Commissions, premium taxes, and non-deferred acquisition costs		137,797		125,509
Other operating expense		84,171		84,352
Interest expense		24,867		19,944
Total benefits and expenses		1,047,084		1,008,450

Income before income taxes		274,234		294,176
Income tax benefit (expense)		(50,624)		(56,692)



Net income		$	223,610	$	237,484




Basic net income per common share		$	2.32	$	2.39




Diluted net income per common share		$	2.28	$	2.37

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollar amounts in thousands)


	Three Months Ended March 31,
		2023		2022
Net income		$	223,610	$	237,484

Other comprehensive income (loss):

Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period		469,119		(2,292,922)

Other reclassification adjustments included in net income		32,590		(4,030)
Foreign exchange adjustment on fixed maturities recorded at fair value		9,567		284



Total unrealized investment gains (losses)		511,276		(2,296,668)
Less applicable tax (expense) benefit		(107,368)		482,299
Unrealized gains (losses) on investments, net of tax		403,908		(1,814,369)

Future Policy Benefits:
Change in discount rate on future policy benefits		(720,890)		2,805,511
Less applicable tax (expense) benefit		151,387		(589,156)
Future policy benefit adjustments, net of tax		(569,503)		2,216,355






Foreign exchange translation:
Foreign exchange translation adjustments, other than securities		(6,516)		4,228
Less applicable tax (expense) benefit		1,368		(887)
Foreign exchange translation adjustments, other than securities, net of tax		(5,148)		3,341

Pension:



Pension adjustments		(48)		3,437
Less applicable tax (expense) benefit		11		(722)
Pension adjustments, net of tax		(37)		2,715

Other comprehensive income (loss)		(170,780)		408,042
Comprehensive income (loss)		$	52,830	$	645,526

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2023 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, 2022	$	—	$	105,218	$	529,661	$	(2,790,313)	$	6,894,535	$	(789,524)	$	3,949,577


Comprehensive income (loss)	—		—		—		(170,780)		223,610		—		52,830
Common dividends declared ($0.2250 per share)	—		—		—		—		(21,542)		—		(21,542)
Acquisition of treasury stock	—		—		—		—		—		(179,276)		(179,276)
Stock-based compensation	—		—		(1,022)		—		—		8,700		7,678
Exercise of stock options	—		—		—		—		(4,059)		41,083		37,024

Balance at March 31, 2023	$	—	$	105,218	$	528,639	$	(2,961,093)	$	7,092,544	$	(919,017)	$	3,846,291


	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	$	(4,235,048)	$	6,455,733	$	(846,659)	$	2,003,808


Comprehensive income (loss)	—		—		—		408,042		237,484		—		645,526
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	$	(3,827,006)	$	6,662,365	$	(923,370)	$	2,544,275

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar amounts in thousands)


	Three Months Ended March 31,
	2023		2022













Cash provided from (used for) operating activities	$	477,330	$	397,133

Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold	15,705		75,116
Fixed maturities available for sale—matured or other redemptions	61,560		115,160
Other long-term investments	1,950		20,929
Total investments sold or matured	79,215		211,205
Acquisition of investments:
Fixed maturities—available for sale	(285,505)		(339,145)
Other long-term investments	(47,898)		(122,010)
Total investments acquired	(333,403)		(461,155)
Net (increase) decrease in policy loans	(7,870)		(2,324)
Net (increase) decrease in short-term investments	39,744		11,801


Additions to property and equipment	(8,210)		(6,981)

Investments in low-income housing interests	(17,246)		(27,870)
Cash provided from (used for) investing activities	(247,770)		(275,324)

Cash provided from (used for) financing activities:
Issuance of common stock	37,024		25,931
Cash dividends paid to shareholders	(20,071)		(19,687)

Short-term borrowings from FHLB	45,000		—

Net borrowing (repayment) of commercial paper	20,070		42,348
Acquisition of treasury stock	(179,276)		(119,482)
Net receipts (payments) from deposit-type products	(54,487)		(13,810)
Cash provided from (used for) financing activities	(151,740)		(84,700)

Effect of foreign exchange rate changes on cash	1,729		(1,644)
Net increase (decrease) in cash	79,549		35,465
Cash at beginning of year	92,559		92,163
Cash at end of period	$	172,108	$	127,628

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.

See accompanying Notes to Condensed Consolidated Financial Statements.

GL Q1 2023 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. (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.

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 (DTC).

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 March 31, 2023, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended March 31, 2023 and 2022. 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 23, 2023.

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.

Significant Accounting Policy Updates*:* The following accounting policies were updated since the 2022 Form 10-K due to the adoption of ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12). Refer to Note 2—New Acc ounting Stan dards for additional information on the financial statement impacts related to the adoption of this standard.

*Future Policy Benefits—*The liability for future policy benefits for traditional and limited-payment long duration life and health products comprises approximately 91% of the total liability for future policy benefits. The liability is determined each reporting period based on the net level premium method. This method requires the liability for future policy benefits be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders. Net level premiums reflect a recomputed net premium ratio1 using actual experience since the issue date or the Transition Date, and expected future experience. The liability is accrued as premium revenue is recognized and adjusted for differences between actual and expected experience. Long-duration insurance contracts issued by the Company are grouped into cohorts based on the contract issue year, distribution channel, legal entity and product type.

1 The net premium ratio is the percentage of gross premiums needed to fund actual and expected benefits and related settlement expenses.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Both the present value of expected future benefit payments and the present value of expected future net premiums are based primarily on assumptions of discount rates, mortality, morbidity, lapse, and persistency. Each quarter, the Company remeasures its liability for future policy benefits using current discount rates with the effect of the change recognized in Other Comprehensive Income, a component of shareholders’ equity. In addition, the Company recognizes a liability remeasurement gain or loss within the Condensed Consolidated Statements of Operations using original discount rates, and relating to actual experience under the net premium calculation, as compared to the prior reporting period assumptions.

The Company reviews, and updates as necessary, its cash flow assumptions (mortality, morbidity, lapses and persistency) used to calculate the change in the liability for future policy benefits at least annually. These cash flow assumptions are reviewed at the same time every year, or more frequently, if suggested by experience. If cash flow assumptions are changed, the net premium ratio is recalculated from the original issue date, or the Transition Date, using actual experience and projected future cash flows. When the expected future net premiums exceed the expected future gross premiums, or the present value of future policyholder benefits exceeds the present value of expected future gross premiums, the liability for future policy benefits is adjusted with changes recognized in policyholder benefits on the Condensed Consolidated Statements of Operations. The cash flow assumptions do not include an adjustment for adverse deviation. Mortality tables used for individual life insurance include various industry tables and reflect modifications based on Company experience. Morbidity assumptions for individual health are based on Company experience and industry data. Lapse and persistency assumptions are based on Globe Life's experience.

The liability for future policy benefits is discounted as noted above, using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. 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. 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. We further accrete interest as a component of policyholder benefits using the original discount rate that is locked-in during the year of contract issuance. The original discount rates (or the locked-in discount rates) are used for interest accretion purposes and for the determination of net premiums, whereas the current discount rates are used for purposes of valuing the liability.

The liability for future policy benefits for annuity and interest sensitive life-type products is represented by policy account value. For limited-payment contracts, a deferred profit liability is also recorded, with changes recognized in income over the life of the contract in proportion to the amount of insurance in force.

*Deferred Acquisition Costs—*Certain costs of acquiring new insurance business are deferred and recorded as an asset. These costs are capitalized on a grouped contract basis and amortized over the expected term of the related contracts, and are essential for the acquisition of new insurance business. Deferred acquisition costs (DAC) are directly related to the successful issuance of an insurance contract, and primarily include sales commissions, policy issue costs, direct to consumer advertising costs, and underwriting costs. Additionally, DAC includes the value of business acquired (VOBA), which are the costs of acquiring blocks of insurance from other companies or through the acquisition of other companies. These costs represent the difference between the fair value of the contractual insurance assets acquired and liabilities assumed, compared against the assets and liabilities for insurance contracts that the Company issues or holds measured in accordance with GAAP.

DAC is amortized on a constant-level basis over the expected term of the grouped contracts, with the related expense included in amortization of deferred acquisition costs on the Condensed Consolidated Statements of Operations. The in-force metric used to compute the DAC amortization rate is annualized premium in force. The assumptions used to amortize acquisition costs include mortality, morbidity, and persistency. These assumptions are reviewed at least annually and revised in conjunction with any change in the future policy benefit assumptions. The effect of changes in the assumptions are recognized over the remaining expected contract term as a revision of future amortization amounts.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

VOBA is amortized on a basis that is consistent with DAC, as described above, and is subject to periodic recoverability and loss recognition testing to determine if there is a premium deficiency. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized VOBA asset. These cash flows consist primarily of premium income, less benefits and expenses. The present value of these cash flows, less the reserve liability, is then compared with the unamortized balance. In the event the estimated present value of net cash flows is less, the deficiency would be recognized by a charge to earnings and either a reduction of unamortized acquisition costs or an increase in the liability for future benefits.

Note 2—New Accounting Standards

Accounting Pronouncements Adopted in the Current Year: On January 1, 2023, the Company adopted ASU 2018-12 on a modified retrospective basis as of the transition date (Transition Date) of January 1, 2021*.* The amended guidance is a significant change to the accounting and disclosure of long-duration life and health insurance contracts. The modified retrospective transition method requires the updated standard be applied to all long-duration life and health contracts, which has resulted in the adjustment of the 2021 and 2022 consolidated financial statements.

The following tables summarize the balance of and changes to the liability for future policy benefits for traditional life and health long-duration contracts on the Transition Date due to the adoption of ASU 2018-12:


		Net Liability for Future Policy Benefits - Long Duration Life
	American Income			DTC			Liberty National			Other			Total
Balance, net of reinsurance, at original discount rates as of December 31, 2020		$	3,541,317		$	2,492,226		$	2,140,071		$	2,736,804		$	10,910,418
Effect of changes in discount rate assumptions		3,334,600			2,195,430			1,229,610			2,297,835			9,057,475
Effect of capping and flooring(1)		—			16,899			2,433			2			19,334
Balance, net of reinsurance, at current discount rates as of January 1, 2021		$	6,875,917		$	4,704,555		$	3,372,114		$	5,034,641		$	19,987,227


		Net liability for Future Policy Benefits - Long Duration Health
	United American			Family Heritage			Liberty National			American Income			DTC			Total
Balance, net of reinsurance, at original discount rates as of December 31, 2020		$	131,505		$	1,383,128		$	501,312		$	101,998		$	(2,941)		$	2,115,002
Effect of changes in discount rate assumptions		75,652			497,250			219,992			60,366			346			853,606
Effect of capping and flooring(1)		6,506			—			19,324			—			4,193			30,023
Balance, net of reinsurance, at current discount rates as of January 1, 2021		$	213,663		$	1,880,378		$	740,628		$	162,364		$	1,598		$	2,998,631

(1)When the present value of expected future net premiums exceeds the present value of expected future gross premiums for a given cohort (capping), or the present value of future policy benefits and related termination expenses exceeds the present value of expected future net premiums (flooring), an adjustment is made to the liability for future policy benefits.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table presents total policy liabilities, both before and after the Transition Date:


	January 1,		December 31,
	2021		2020

Future policy benefits:
Net liability for future policy benefits—long duration life	$	19,987,227	$	10,910,418
Net liability for future policy benefits—long duration health	2,998,631		2,115,002





Additional insurance liabilities(1),(2)	2,008,399		2,218,116
Total future policy benefits	24,994,257		15,243,536

Unearned and advance premium(1)	243,369		61,728

Policy claims and other benefits payable(1)	473,524		399,507

Other policyholders' funds(1)	98,459		97,968
Total policy liabilities	$	25,809,609	$	15,802,739

(1)In addition to the discount rate related adjustments to future policy benefits, the Company reclassified certain balances within total policy liabilities on the Consolidated Balance Sheets as a result of adopting ASU 2018-12. The reclassifications had an immaterial impact on Shareholders' Equity. See table summarizing the transition adjustments to Shareholders' Equity below.

(2)The Company's additional insurance liabilities consist primarily of: 1) deferred profit liability on limited-payment contracts; and 2) reserves on deferred annuity and interest sensitive life blocks of business. See Note 6—Policy Liabilities for additional information.

The following table presents the Company's deferred policy acquisition costs, both before and after the Transition Date:


		January 1,			December 31,
	2021			2020
Life:
American Income		$	1,647,761		$	1,647,761
Direct to Consumer		1,498,970			1,498,435
Liberty National		531,504			531,504
Other		304,786			304,459
Total life		3,983,021			3,982,159

Health:
United American		65,020			74,353
Family Heritage		364,751			364,751
Liberty National		124,754			124,888
American Income		39,477			39,477
Direct to Consumer		2,215			6,600
Total health		596,217			610,069

Annuity		8,309			3,216
Total DAC		$	4,587,547		$	4,595,444

In accordance with ASU 2018-12, the Company has adjusted its DAC balance to remove the impact of unrealized gains and losses that were previously recorded in Accumulated Other Comprehensive Income (AOCI) on the Consolidated Statements of Shareholders' Equity. Under prior guidance, the Company included these amounts within its calculation of amortization.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table presents the effect of transition adjustments due to the adoption of ASU 2018-12 on Shareholders' Equity:


	Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Other(1)		Total
Shareholders’ Equity, as of December 31, 2020	$	5,874,109	$	3,029,244	$	(132,261)	$	8,771,092
Effect of changes in discount rate assumptions	—		(7,829,753)		—		(7,829,753)
Effect of capping and flooring	(38,992)		—		—		(38,992)
Effect of removal of unrealized gain (loss) on DAC	—		4,704		—		4,704
Other adjustments	26,470		—		—		26,470
Shareholders’ Equity, as of January 1, 2021	$	5,861,587	$	(4,795,805)	$	(132,261)	$	933,521

(1)Other represents common stock, additional paid-in capital, and treasury stock, combining balances that were unaffected by the new standard.

As of the Transition Date, the primary effects of the changes required by the standard were to AOCI and retained earnings. As seen in the table above, the transition adjustments impacting AOCI consist of the effect of changes in discount rate assumptions and the effect of the removal of unrealized gains (losses) on DAC. The effect of changes in discount rate assumptions is the impact, net of tax, of the Company re-measuring its liability for future policy benefits using current discount rates. As of the Transition Date, we experienced a lower level of current discount rates than the original discount rates used in valuing our future policy benefits under the prior guidance, thus reducing Shareholders' Equity. For the effect of removing unrealized gains (losses) on DAC, this adjustment relates to the requirement to remove unrealized gains (losses) that were included within the amortization calculation, as noted previously.

Regarding the impact on retained earnings, when the present value of net premiums exceeds the present value of gross premiums for a given cohort (capping), or the present value of future benefits and related termination expenses exceeds the present value of future gross premiums (flooring), an adjustment is recognized to the liability for future policy benefits. Any blocks of business that require increases in future policy benefits to minimum levels, or that have a net premium ratio greater than 100%, required an adjustment to the opening balance of retained earnings (decrease).

Accounting Pronouncements Yet to be Adopted: ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, 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. The Company does not expect the standard will have a material impact on the Consolidated Financial Statements.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Effect of New Accounting Standards on Previously Reported Results*:* The impacts from the adoption of ASU 2018-12 on the Company's previously reported results included in these financial statements are as follows:

Condensed Consolidated Balance Sheets



	December 31, 2022
	As Previously Reported		Adoption Impact		As Adjusted
Assets:








Other receivables	$	484,887	$	104,192	$	589,079
Deferred acquisition costs	5,249,907		285,790		5,535,697



Liabilities:
Future policy benefits	16,721,846		1,318,196		18,040,042
Unearned and advance premium	60,742		192,398		253,140
Policy claims and other benefits payable	430,027		77,192		507,219


Current and deferred income taxes	686,172		(251,523)		434,649





Shareholders' equity:



Accumulated other comprehensive income (loss)	(1,415,714)		(1,374,599)		(2,790,313)
Retained earnings	6,466,220		428,315		6,894,535

Condensed Consolidated Statements of Operations


	Three Months Ended March 31, 2022

		As Previously Reported		Adoption Impact		As Adjusted
Revenue:
Life premium		$	754,602	$	(5,474)	$	749,128
Health premium		317,000		(1,316)		315,684


Net investment income		243,834		1,060		244,894





Benefits and expenses:
Life policyholder benefits		549,343		(53,914)		495,429
Health policyholder benefits		196,855		(7,837)		189,018
Other policyholder benefits		7,050		2,652		9,702


Amortization of deferred acquisition costs		158,384		(73,888)		84,496
Commissions, premium taxes, and non-deferred acquisition costs		90,813		34,696		125,509




Income before income taxes		201,615		92,561		294,176
Income tax benefit (expense)		(37,254)		(19,438)		(56,692)



Net income		$	164,361	$	73,123	$	237,484




Basic net income per common share		$	1.66	$	0.73	$	2.39




Diluted net income per common share		$	1.64	$	0.73	$	2.37

See Note 1—Significant Accounting Policies, Note 6—Policy Liabilities, and Note 7—DAC for additional information on the adoption.

GL Q1 2023 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, 2023 and 2022:


	Three Months Ended March 31, 2023
	Available for Sale Assets		Future Policy Benefits		Foreign Exchange		Pension Adjustments		Total
Balance at January 1, 2023	$	(1,420,672)	$	(1,369,204)	$	(1,681)	$	1,244	$	(2,790,313)
Other comprehensive income (loss) before reclassifications, net of tax	378,162		(569,503)		(5,148)		—		(196,489)
Reclassifications, net of tax	25,746		—		—		(37)		25,709
Other comprehensive income (loss)	403,908		(569,503)		(5,148)		(37)		(170,780)
Balance at March 31, 2023	$	(1,016,764)	$	(1,938,707)	$	(6,829)	$	1,207	$	(2,961,093)


	Three Months Ended March 31, 2022
	Available for Sale Assets		Future Policy Benefits		Foreign Exchange		Pension Adjustments		Total
Balance at January 1, 2022	$	2,765,290	$	(6,915,910)	$	19,248	$	(103,676)	$	(4,235,048)
Other comprehensive income (loss) before reclassifications, net of tax	(1,811,185)		2,216,355		3,341		—		408,511
Reclassifications, net of tax	(3,184)		—		—		2,715		(469)
Other comprehensive income (loss)	(1,814,369)		2,216,355		3,341		2,715		408,042
Balance at March 31, 2022	$	950,921	$	(4,699,555)	$	22,589	$	(100,961)	$	(3,827,006)

GL Q1 2023 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, 2023 and 2022.



	Three Months Ended March 31,			Affected line items in the Statements of Operations
Component Line Item		2023		2022
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses		$	33,124	$	(4,937)	Realized (gains) losses

Amortization of (discount) premium		(534)		907		Net investment income
Total before tax		32,590		(4,030)
Tax		(6,844)		846		Income taxes
Total after-tax		25,746		(3,184)
Pension adjustments:
Amortization of prior service cost		269		158		Other operating expense
Amortization of actuarial (gain) loss		(317)		3,279		Other operating expense
Total before tax		(48)		3,437
Tax		11		(722)		Income taxes
Total after-tax		(37)		2,715
Total reclassification (after-tax)		$	25,709	$	(469)

GL Q1 2023 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, 2023 and December 31, 2022, 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, 2023
	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	$	389,441	$	—	$	114	$	(27,482)	$	362,073	2
States, municipalities, and political subdivisions	2,894,161		—		41,407		(426,929)		2,508,639		15
Foreign governments	53,789		—		13		(11,282)		42,520		—
Corporates, by sector:
Financial	4,973,445		(26,040)		84,796		(453,394)		4,578,807		27
Utilities	1,958,888		—		70,798		(94,579)		1,935,107		11
Energy	1,434,766		—		38,477		(80,338)		1,392,905		8
Other corporate sectors	6,697,469		(6,727)		126,968		(557,390)		6,260,320		36
Total corporates	15,064,568		(32,767)		321,039		(1,185,701)		14,167,139		82
Collateralized debt obligations	36,778		—		8,724		—		45,502		—
Other asset-backed securities	87,966		—		4		(6,958)		81,012		1
Total fixed maturities	$	18,526,703	$	(32,767)	$	371,301	$	(1,658,352)	$	17,206,885	100

(1)Amount reported in the balance sheet.

(2)At fair value.

The Company has exposure to banks as part of its fixed maturity portfolio. The Company’s bank securities had a fair value of $1.3 billion (8% of the total fixed maturity portfolio) at March 31, 2023 and December 31, 2022.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	At December 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	$	394,439	$	—	$	27	$	(38,968)	$	355,498	2
States, municipalities, and political subdivisions	2,791,030		—		24,328		(505,447)		2,309,911		14
Foreign governments	55,164		—		6		(12,706)		42,464		—
Corporates, by sector:
Financial	4,907,794		—		63,126		(504,489)		4,466,431		27
Utilities	1,924,190		—		36,670		(125,713)		1,835,147		11
Energy	1,436,598		—		22,637		(101,923)		1,357,312		8
Other corporate sectors	6,667,043		—		78,903		(738,772)		6,007,174		37
Total corporates	14,935,625		—		201,336		(1,470,897)		13,666,064		83
Collateralized debt obligations	37,098		—		13,266		—		50,364		—
Other asset-backed securities	88,336		—		4		(9,276)		79,064		1
Total fixed maturities	$	18,301,692	$	—	$	238,967	$	(2,037,294)	$	16,503,365	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, 2023, 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, 2023
	Amortized Cost, net		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	169,491	$	170,003
Due after one year through five years	1,113,684		1,118,421
Due after five years through ten years	1,691,785		1,717,908
Due after ten years through twenty years	7,976,112		7,740,695
Due after twenty years	7,418,120		6,333,344
Mortgage-backed and asset-backed securities	124,744		126,514
	$	18,493,936	$	17,206,885

GL Q1 2023 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, 2023 and 2022 is summarized as follows:


	Three Months Ended March 31,
		2023		2022		% Change
Fixed maturities available for sale		$	232,299	$	225,284	3
Policy loans		11,755		11,428		3
Other long-term investments(1)		15,743		12,713		24
Short-term investments		1,595		2
		261,392		249,427		5
Less investment expense		(4,287)		(4,533)		(5)
Net investment income		$	257,105	$	244,894	5

(1)For the three months ended March 31, 2023 and 2022, the investment funds, accounted for under the fair value option method, recorded $11.3 million and $10.7 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,
		2023		2022
Fixed maturities available for sale:
Proceeds from sales(1)		$	15,705	$	75,116
Gross realized gains		—		773
Gross realized losses		(358)		(3,679)

(1)There were no unsettled sales in the periods ended March 31, 2023 and 2022.

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


	Three Months Ended March 31,
		2023		2022
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)		$	(357)	$	4,549

Provision for credit losses		(32,767)		387
Fair value option—change in fair value		1,858		(5,338)
Other investments		339		(6,842)
Realized gains (losses) from investments		(30,927)		(7,244)


Applicable tax		6,495		1,521
Realized gains (losses), net of tax		$	(24,432)	$	(5,723)

(1)During the three months ended March 31, 2023 and 2022, the Company recorded $0 and $0 of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $0, respectively, in realized gains (losses).

GL Q1 2023 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, 2023 and December 31, 2022:


	Fair Value Measurement at March 31, 2023 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	$	—		$	362,073		$	—		$	362,073
States, municipalities, and political subdivisions	—			2,508,639			—			2,508,639
Foreign governments	—			42,520			—			42,520
Corporates, by sector:
Financial	—			4,445,091			133,716			4,578,807
Utilities	—			1,822,748			112,359			1,935,107
Energy	—			1,381,989			10,916			1,392,905
Other corporate sectors	—			6,045,672			214,648			6,260,320
Total corporates	—			13,695,500			471,639			14,167,139
Collateralized debt obligations	—			—			45,502			45,502
Other asset-backed securities	—			81,012			—			81,012
Total fixed maturities	$	—		$	16,689,744		$	517,141		$	17,206,885
Percentage of total	—		%	97		%	3		%	100		%


	Fair Value Measurement at December 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	$	—		$	355,498		$	—		$	355,498
States, municipalities, and political subdivisions	—			2,309,911			—			2,309,911
Foreign governments	—			42,464			—			42,464
Corporates, by sector:
Financial	—			4,332,495			133,936			4,466,431
Utilities	—			1,723,832			111,315			1,835,147
Energy	—			1,346,212			11,100			1,357,312
Other corporate sectors	—			5,785,442			221,732			6,007,174
Total corporates	—			13,187,981			478,083			13,666,064
Collateralized debt obligations	—			—			50,364			50,364
Other asset-backed securities	—			79,064			—			79,064
Total fixed maturities	$	—		$	15,974,918		$	528,447		$	16,503,365
Percentage of total	—		%	97		%	3		%	100		%

GL Q1 2023 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, 2023	$	—		$	50,364		$	478,083		$	528,447

Included in realized gains / losses	—			—			—			—
Included in other comprehensive income	—			(4,542)			5,370			828
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			1,141			2			1,143
Other(1)	—			(1,461)			(11,816)			(13,277)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at March 31, 2023	$	—		$	45,502		$	471,639		$	517,141
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, 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.

GL Q1 2023 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 and losses for the period included in accumulated other comprehensive income for assets held at the end of the reporting period for Level 3s:



	Changes in Unrealized Gains (Losses) included in Accumulated Other Comprehensive Income for Assets Held at the End of the Period
	Asset- backed Securities		Collateralized Debt Obligations		Corporates		Total
At March 31, 2023	$	—	$	(4,542)	$	5,370	$	828
At March 31, 2022	—		(3,809)		(36,360)		(40,169)

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, 2023	624	1,290	1,914
As of December 31, 2022	1,819	157	1,976

Globe Life's entire fixed maturity portfolio consisted of 2,379 issues by 987 different issuers at March 31, 2023 and 2,328 issues by 979 different issuers at December 31, 2022. The weighted-average quality rating of all unrealized loss positions at amortized cost was A- as of March 31, 2023 and December 31, 2022.

The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at March 31, 2023 and December 31, 2022.

GL Q1 2023 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 March 31, 2023
	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	$	275,114	$	(17,384)	$	84,691	$	(10,098)	$	359,805	$	(27,482)
States, municipalities, and political subdivisions	601,542		(23,575)		1,219,137		(403,354)		1,820,679		(426,929)
Foreign governments	15,491		(145)		25,555		(11,137)		41,046		(11,282)
Corporates, by sector:
Financial	1,355,645		(92,771)		1,482,482		(308,161)		2,838,127		(400,932)
Utilities	304,897		(14,438)		474,873		(77,678)		779,770		(92,116)
Energy	319,199		(11,489)		332,106		(58,433)		651,305		(69,922)
Other corporate sectors	1,211,339		(64,035)		2,859,975		(470,663)		4,071,314		(534,698)
Total corporates	3,191,080		(182,733)		5,149,436		(914,935)		8,340,516		(1,097,668)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	25,733		(696)		43,631		(5,454)		69,364		(6,150)
Total investment grade securities	4,108,960		(224,533)		6,522,450		(1,344,978)		10,631,410		(1,569,511)

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

Corporates, by sector:
Financial	79,716		(9,059)		106,971		(43,403)		186,687		(52,462)
Utilities	8,265		(662)		20,166		(1,801)		28,431		(2,463)
Energy	—		—		34,289		(10,416)		34,289		(10,416)
Other corporate sectors	71,156		(4,350)		90,580		(18,342)		161,736		(22,692)
Total corporates	159,137		(14,071)		252,006		(73,962)		411,143		(88,033)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		11,580		(808)		11,580		(808)
Total below investment grade securities	159,137		(14,071)		263,586		(74,770)		422,723		(88,841)
Total fixed maturities	$	4,268,097	$	(238,604)	$	6,786,036	$	(1,419,748)	$	11,054,133	$	(1,658,352)

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 2023 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, 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	$	349,887	$	(38,218)	$	3,424	$	(750)	$	353,311	$	(38,968)
States, municipalities, and political subdivisions	1,767,624		(453,149)		95,124		(52,298)		1,862,748		(505,447)
Foreign governments	6,297		(201)		25,134		(12,505)		31,431		(12,706)
Corporates, by sector:
Financial	2,837,918		(426,132)		109,784		(42,173)		2,947,702		(468,305)
Utilities	1,088,219		(116,272)		21,636		(6,268)		1,109,855		(122,540)
Energy	855,853		(91,755)		—		—		855,853		(91,755)
Other corporate sectors	4,155,986		(665,831)		94,299		(42,344)		4,250,285		(708,175)
Total corporates	8,937,976		(1,299,990)		225,719		(90,785)		9,163,695		(1,390,775)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	60,157		(5,223)		7,960		(2,435)		68,117		(7,658)
Total investment grade securities	11,121,941		(1,796,781)		357,361		(158,773)		11,479,302		(1,955,554)

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

Corporates, by sector:
Financial	120,377		(18,901)		38,348		(17,283)		158,725		(36,184)
Utilities	27,722		(3,173)		—		—		27,722		(3,173)
Energy	14,480		(2,182)		20,075		(7,986)		34,555		(10,168)
Other corporate sectors	166,159		(25,962)		6,670		(4,635)		172,829		(30,597)
Total corporates	328,738		(50,218)		65,093		(29,904)		393,831		(80,122)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		10,874		(1,618)		10,874		(1,618)
Total below investment grade securities	328,738		(50,218)		75,967		(31,522)		404,705		(81,740)
Total fixed maturities	$	11,450,679	$	(1,846,999)	$	433,328	$	(190,295)	$	11,884,007	$	(2,037,294)

GL Q1 2023 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,
		2023		2022
Allowance for credit losses beginning balance		$	—	$	387
Additions to allowance for which credit losses were not previously recorded		32,767		—
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)
Allowance for credit losses ending balance		$	32,767	$	—

As of March 31, 2023 and December 31, 2022, 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, 2023		December 31, 2022
Investment funds	$	789,197	$	768,689
Commercial mortgage loan participations	204,275		181,305
Other	29,139		26,022
Total	$	1,022,611	$	976,016

The following table presents additional information about the Company's investment funds as of March 31, 2023 and December 31, 2022 at fair value:



	Fair Value				Unfunded Commitments
Investment Category	March 31, 2023		December 31, 2022		March 31, 2023		Redemption Term/Notice




Commercial mortgage loans	$	454,144	$	431,405	$	330,245	Fully redeemable and non-redeemable with varying terms.
Opportunistic credit	157,899		158,524		—		Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.


Infrastructure	158,036		159,534		21,366		Fully redeemable and non-redeemable with varying terms.


Other	19,118		19,226		120,079
Total investment funds	$	789,197	$	768,689	$	471,690

The Company had $21 million of capital called during the year from existing investment funds. Our unfunded commitments were $472 million as of March 31, 2023.

GL Q1 2023 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, 2023 and December 31, 2022 are as follows:



	March 31, 2023			December 31, 2022
	Carrying Value		% of Total	Carrying Value		% of Total
Property type:
Mixed use	$	59,965	29	$	62,375	34
Hospitality	28,033		14	27,796		15
Retail	23,744		12	15,342		9
Industrial	27,259		13	27,248		15
Multi-family	57,206		28	42,232		23
Office	11,137		6	8,101		5

Total recorded investment	207,344		102	183,094		101
Less allowance for credit losses	(3,069)		(2)	(1,789)		(1)
Carrying value, net of allowance for credit losses	$	204,275	100	$	181,305	100


	March 31, 2023			December 31, 2022
	Carrying Value		% of Total	Carrying Value		% of Total
Geographic location:
California	$	64,990	32	$	64,477	36
Texas	23,132		12	22,905		13
New York	27,570		14	19,167		11
Washington	14,939		7	14,925		8
Massachusetts	14,925		7	—		—
Florida	33,217		16	33,182		18
Other	28,571		14	28,438		15
Total recorded investment	207,344		102	183,094		101
Less allowance for credit losses	(3,069)		(2)	(1,789)		(1)
Carrying value, net of allowance for credit losses	$	204,275	100	$	181,305	100

GL Q1 2023 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 the key factors, debt service coverage ratios, and loan-to-value (LTV) ratios that are utilized by management to monitor the performance of the portfolios. The Company only makes new investments in commercial mortgage loans that have a LTV ratio less than 80%. Generally, a higher LTV ratio and a lower debt service coverage ratio can potentially equate to higher risk of loss.


	March 31, 2023
	Recorded Investment
	Debt Service Coverage Ratios(1)
	<1.00x		1.00x—1.20x		>1.20x		Total		% of Total
Loan-to-value ratio(2):
Less than 70%	$	24,235	$	123,466	$	20,430	$	168,131	81
70% to 80%	—		7,222		1,238		8,460		4
81% to 90%	8,307		—		—		8,307		4
Greater than 90%	7,035		15,411		—		22,446		11
Total	$	39,577	$	146,099	$	21,668	207,344		100
Less allowance for credit losses							(3,069)
Total, net of allowance for credit losses							$	204,275

(1)Annual net operating income divided by annual mortgage debt service (principal and interest).

(2)Loan balance divided by appraised value, including planned renovations and stabilized occupancy, at origination. Updated internal valuations are used when a loan is materially underperforming.


	December 31, 2022
	Recorded Investment
	Debt Service Coverage Ratios(1)
	<1.00x		1.00x—1.20x		>1.20x		Total		% of Total
Loan-to-value ratio(2):
Less than 70%	$	24,221	$	108,156	$	12,018	$	144,395	79
70% to 80%	—		22,120		1,238		23,358		13
81% to 90%	8,307		—		—		8,307		4
Greater than 90%	7,034		—		—		7,034		4
Total	$	39,562	$	130,276	$	13,256	183,094		100
Less allowance for credit losses							(1,789)
Total, net of allowance for credit losses							$	181,305

(1)Annual net operating income divided by annual mortgage debt service (principal and interest).

(2)Loan balance divided by appraised value, including planned renovations and stabilized occupancy, at origination. Updated internal valuations are used when a loan is materially underperforming.

As of March 31, 2023, 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 25 loans in the portfolio. For the three months ended March 31, 2023, 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 March 31,
		2023		2022
Allowance for credit losses beginning balance		$	1,789	$	827

Provision (reversal) for credit losses		1,280		—

Allowance for credit losses ending balance		$	3,069	$	827

GL Q1 2023 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, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the Company had no commercial mortgage loan in non-accrual status. The Company's unfunded commitment balance to commercial loan borrowers was $28 million as of March 31, 2023.

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, 2023 was $115 million.

Litigation: Globe Life Inc. 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 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 6—Policy Liabilities

The liability for future policy benefits is determined based on the net level premium method, which requires the liability be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders.

The following tables summarize balances and changes in the net liability for future policy benefits, before reinsurance, for traditional life long-duration contracts:


	Life
	Present value of expected future net premiums
	American Income		DTC		Liberty National		Other		Total












Balance at January 1, 2022	$	4,925,192	$	7,264,905	$	1,332,469	$	559,972	$	14,082,538
Beginning balance at original discount rates	3,906,098		5,533,741		1,040,242		416,141		10,896,222
Effect of changes in assumptions of future cash flows	—		—		—		—		—
Effect of actual variances from expected experience	(4,315)		(29,595)		(625)		1,652		(32,883)
Adjusted balance at January 1, 2022	3,901,783		5,504,146		1,039,617		417,793		10,863,339
Issuances(1)	215,926		173,775		22,965		7,300		419,966
Interest accrual(2)	43,074		67,608		12,810		5,172		128,664
Net premiums collected(3)	(120,203)		(149,757)		(31,627)		(10,831)		(312,418)

Effect of changes in the foreign exchange rate	2,900		—		—		—		2,900
Ending balance at original discount rates	4,043,480		5,595,772		1,043,765		419,434		11,102,451

Effect of change from original to current discount rates	603,267		1,114,883		181,223		92,398		1,991,771
Balance at March 31, 2022	$	4,646,747	$	6,710,655	$	1,224,988	$	511,832	$	13,094,222




























Balance at January 1, 2023	$	4,273,156	$	5,910,224	$	1,094,407	$	470,741	$	11,748,528
Beginning balance at original discount rates	4,246,723		5,680,864		1,066,123		449,209		11,442,919
Effect of changes in assumptions of future cash flows	—		—		—		—		—
Effect of actual variances from expected experience	(29,981)		(47,988)		(5,590)		(1,886)		(85,445)
Adjusted balance at January 1, 2023	4,216,742		5,632,876		1,060,533		447,323		11,357,474
Issuances(1)	192,555		168,952		30,142		7,241		398,890
Interest accrual(2)	47,898		70,991		13,288		5,670		137,847
Net premiums collected(3)	(127,239)		(153,919)		(33,188)		(11,557)		(325,903)

Effect of changes in the foreign exchange rate	(3,999)		—		—		—		(3,999)
Ending balance at original discount rates	4,325,957		5,718,900		1,070,775		448,677		11,564,309

Effect of change from original to current discount rates	141,680		391,650		57,308		34,379		625,017
Balance at March 31, 2023	$	4,467,637	$	6,110,550	$	1,128,083	$	483,056	$	12,189,326

(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.

(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.

(3)Net premiums collected represent the product of the current period net premium ratio, and the gross premiums collected during the period on the in-force business.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


		Life
	Present value of expected future policy benefits
	American Income			DTC			Liberty National			Other			Total
















Balance at January 1, 2022		$	11,773,519		$	11,859,408		$	4,542,697		$	5,488,684		$	33,664,308
Beginning balance at original discount rates		7,744,201			8,157,259			3,206,164			3,267,306			22,374,930
Effect of changes in assumptions of future cash flows		—			—			—			—			—
Effect of actual variances from expected experience		(2,959)			(25,850)			153			1,680			(26,976)
Adjusted balance at January 1, 2022		7,741,242			8,131,409			3,206,317			3,268,986			22,347,954
Issuances(1)		215,926			173,775			22,965			7,300			419,966
Interest accrual(2)		100,336			106,928			42,230			48,280			297,774
Benefit payments(3)		(104,321)			(173,611)			(63,457)			(34,297)			(375,686)

Effect of changes in the foreign exchange rate		6,511			—			—			—			6,511
Ending balance at original discount rates		7,959,694			8,238,501			3,208,055			3,290,269			22,696,519
Effect of change from original to current discount rates		2,692,562			2,511,848			858,179			1,558,106			7,620,695
Balance at March 31, 2022		$	10,652,256		$	10,750,349		$	4,066,234		$	4,848,375		$	30,317,214





Balance at January 1, 2023	$	9,119,104	$	9,225,451	$	3,429,256	$	3,976,150	$	25,749,961
Beginning balance at original discount rates	8,409,761		8,477,892		3,272,980		3,403,704		23,564,337
Effect of changes in assumptions of future cash flows	—		—		—		—		—
Effect of actual variances from expected experience	(31,526)		(48,947)		(7,054)		(2,896)		(90,423)
Adjusted balance at January 1, 2023	8,378,235		8,428,945		3,265,926		3,400,808		23,473,914
Issuances(1)	192,555		168,952		30,142		7,241		398,890
Interest accrual(2)	109,329		112,768		43,256		50,378		315,731
Benefit payments(3)	(96,674)		(147,061)		(54,730)		(30,892)		(329,357)

Effect of changes in the foreign exchange rate	(9,711)		—		—		—		(9,711)
Ending balance at original discount rates	8,573,734		8,563,604		3,284,594		3,427,535		23,849,467
Effect of change from original to current discount rates	1,063,729		1,061,076		274,418		738,992		3,138,215
Balance at March 31, 2023	$	9,637,463	$	9,624,680	$	3,559,012	$	4,166,527	$	26,987,682

(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.

(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.

(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period due to death, lapse, and maturity benefit payments based on the revised expected assumptions.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Life
	Net liability for future policy benefits as of March 31, 2022
		American Income		DTC		Liberty National		Other		Total
Net liability for future policy benefits at original discount rates		$	3,916,214	$	2,642,729	$	2,164,290	$	2,870,835	$	11,594,068
Effect of changes in discount rate assumptions		2,089,295		1,396,965		676,956		1,465,708		5,628,924
Net liability for future policy benefits at current discount rates		6,005,509		4,039,694		2,841,246		4,336,543		17,222,992
Other Adjustments(1)		(11)		2,820		(10,446)		(43,598)		(51,235)
Net liability for future policy benefits, after other adjustments, at current discount rates		$	6,005,498	$	4,042,514	$	2,830,800	$	4,292,945	$	17,171,757

(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.


	Life
	Net liability for future policy benefits as of March 31, 2023
		American Income		DTC		Liberty National		Other		Total
Net liability for future policy benefits at original discount rates		$	4,247,777	$	2,844,704	$	2,213,819	$	2,978,858	$	12,285,158
Effect of changes in discount rate assumptions		922,049		669,426		217,110		704,613		2,513,198
Net liability for future policy benefits at current discount rates		5,169,826		3,514,130		2,430,929		3,683,471		14,798,356
Other Adjustments(1)		(46)		4,546		486		(36,765)		(31,779)
Net liability for future policy benefits, after other adjustments, at current discount rates		$	5,169,780	$	3,518,676	$	2,431,415	$	3,646,706	$	14,766,577

(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables summarize balances and changes in the net liability for future policy benefits for long-duration health contracts:


	Health
	Present value of expected future net premiums
	United American		Family Heritage		Liberty National		American Income		DTC		Total












Balance at January 1, 2022	$	3,611,659	$	1,944,714	$	517,368	$	222,553	$	121,724	$	6,418,018
Beginning balance at original discount rates	2,949,851		1,688,590		414,409		178,801		96,776		5,328,427
Effect of changes in assumptions of future cash flows	—		—		—		—		—		—
Effect of actual variances from expected experience	(49,560)		(15,162)		(15,462)		(2,465)		(1,880)		(84,529)
Adjusted balance at January 1, 2022	2,900,291		1,673,428		398,947		176,336		94,896		5,243,898
Issuances(1)	90,034		53,518		10,815		10,452		880		165,699
Interest accrual(2)	30,339		14,940		4,872		1,831		1,182		53,164
Net premiums collected(3)	(62,895)		(42,751)		(12,883)		(5,252)		(2,550)		(126,331)

Effect of changes in the foreign exchange rate	—		—		—		312		—		312
Ending balance at original discount rates	2,957,769		1,699,135		401,751		183,679		94,408		5,336,742

Effect of change from original to current discount rates	379,383		91,102		61,701		24,385		15,326		571,897
Balance at March 31, 2022	$	3,337,152	$	1,790,237	$	463,452	$	208,064	$	109,734	$	5,908,639




























Balance at January 1, 2023	$	2,908,501	$	1,594,992	$	423,490	$	190,296	$	90,143	$	5,207,422
Beginning balance at original discount rates	2,941,261		1,729,219		415,442		192,631		87,751		5,366,304
Effect of changes in assumptions of future cash flows	—		—		—		—		—		—
Effect of actual variances from expected experience	(34,132)		(18,758)		(16,585)		(1,621)		(2,573)		(73,669)
Adjusted balance at January 1, 2023	2,907,129		1,710,461		398,857		191,010		85,178		5,292,635
Issuances(1)	75,839		67,787		13,303		10,212		2,392		169,533
Interest accrual(2)	31,587		16,199		4,890		2,036		1,057		55,769
Net premiums collected(3)	(65,914)		(43,979)		(12,403)		(5,424)		(2,661)		(130,381)

Effect of changes in the foreign exchange rate	—		—		—		(388)		—		(388)
Ending balance at original discount rates	2,948,641		1,750,468		404,647		197,446		85,966		5,387,168

Effect of change from original to current discount rates	49,082		(86,054)		16,800		3,220		4,277		(12,675)
Balance at March 31, 2023	$	2,997,723	$	1,664,414	$	421,447	$	200,666	$	90,243	$	5,374,493

(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.

(3)Net premiums collected represent the product of the current period net premium ratio, and the gross premiums collected during the period on the in-force business.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


		Health
	Present value of expected future policy benefits
	United American			Family Heritage			Liberty National			American Income			DTC			Total
















Balance at January 1, 2022		$	3,810,559		$	3,840,322		$	1,201,317		$	380,915		$	119,888		$	9,353,001
Beginning balance at original discount rates		3,090,901			3,193,342			921,608			285,604			95,628			7,587,083
Effect of changes in assumptions of future cash flows		—			—			—			—			—			—
Effect of actual variances from expected experience		(50,453)			(15,668)			(15,790)			(2,645)			(2,025)			(86,581)
Adjusted balance at January 1, 2022		3,040,448			3,177,674			905,818			282,959			93,603			7,500,502
Issuances(1)		89,904			53,518			10,866			10,452			876			165,616
Interest accrual(2)		32,308			29,583			12,120			3,432			1,182			78,625
Benefit payments(3)		(67,243)			(28,494)			(23,065)			(5,044)			(3,389)			(127,235)

Effect of changes in the foreign exchange rate		—			—			—			557			—			557
Ending balance at original discount rates		3,095,417			3,232,281			905,739			292,356			92,272			7,618,065
Effect of change from original to current discount rates		413,068			244,358			176,686			59,275			14,762			908,149
Balance at March 31, 2022		$	3,508,485		$	3,476,639		$	1,082,425		$	351,631		$	107,034		$	8,526,214





Balance at January 1, 2023	$	3,046,829	$	3,005,664	$	941,574	$	312,750	$	87,532	$	7,394,349
Beginning balance at original discount rates	3,080,633		3,336,344		904,865		303,713		85,212		7,710,767
Effect of changes in assumptions of future cash flows	—		—		—		—		—		—
Effect of actual variances from expected experience	(31,443)		(19,779)		(15,995)		(1,578)		(2,302)		(71,097)
Adjusted balance at January 1, 2023	3,049,190		3,316,565		888,870		302,135		82,910		7,639,670
Issuances(1)	75,683		67,787		13,285		10,212		2,388		169,355
Interest accrual(2)	33,480		32,289		11,840		3,668		1,057		82,334
Benefit payments(3)	(78,563)		(29,261)		(23,976)		(7,137)		(3,354)		(142,291)

Effect of changes in the foreign exchange rate	—		—		—		(708)		—		(708)
Ending balance at original discount rates	3,079,790		3,387,380		890,019		308,170		83,001		7,748,360
Effect of change from original to current discount rates	52,672		(212,708)		59,977		18,363		4,089		(77,607)
Balance at March 31, 2023	$	3,132,462	$	3,174,672	$	949,996	$	326,533	$	87,090	$	7,670,753

(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Health
	Net liability for future policy benefits as of March 31, 2022
	United American		Family Heritage		Liberty National		American Income		Direct to Consumer		Total
Net liability for future policy benefits at original discount rates	$	137,648	$	1,533,146	$	503,988	$	108,677	$	(2,136)	$	2,281,323
Effect of changes in discount rate assumptions	33,685		153,256		114,985		34,890		(564)		336,252
Net liability for future policy benefits at current discount rates	171,333		1,686,402		618,973		143,567		(2,700)		2,617,575
Other Adjustments	(1,812)		(10,847)		1,508		12		3,812		(7,327)
Net liability for future policy benefits, after other adjustments, at current discount rates	$	169,521	$	1,675,555	$	620,481	$	143,579	$	1,112	$	2,610,248

(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.


	Health
	Net liability for future policy benefits as of March 31, 2023
	United American		Family Heritage		Liberty National		American Income		Direct to Consumer		Total
Net liability for future policy benefits at original discount rates	131,149		1,636,912		485,372		110,724		(2,965)		2,361,192
Effect of changes in discount rate assumptions	3,590		(126,654)		43,177		15,143		(188)		(64,932)
Net liability for future policy benefits at current discount rates	134,739		1,510,258		528,549		125,867		(3,153)		2,296,260
Other Adjustments	1,771		(9,362)		4,348		333		4,162		1,252
Net liability for future policy benefits, after other adjustments, at current discount rates	$	136,510	$	1,500,896	$	532,897	$	126,200	$	1,009	$	2,297,512

(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.

During the three-month periods ended March 31, 2023 and 2022, the Company's results for actual variances from expected experience produced a net reserve remeasurement gain of $659 thousand and a net reserve remeasurement loss of $3.8 million in the Condensed Consolidated Statements of Operations, respectively. The variance of actual experience from expected experience during the first quarter of 2023 was primarily due to favorable variances from mortality assumptions as compared to actual experience in our life insurance segment (a $2.7 million gain), and unfavorable variances from morbidity assumptions as compared to actual experience in our health insurance segment (a $2.0 million loss). The variance of actual experience from expected experience during the first quarter of 2022 was primarily due to unfavorable variances from mortality assumptions as compared to actual experience in our life insurance segment (a $5.8 million loss), and favorable variances from morbidity assumptions as compared to actual experience in our health insurance segment (a $2.0 million gain). The life segment has experienced lower claims in the first quarter of 2023 versus the prior year mainly driven by lower excess claims due to COVID and non-COVID causes, which was seen in the American Income, Direct to Consumer, and Liberty National channels. The health segment's utilization has returned to normal levels in 2023, specifically in the United American and Liberty National channels. There were no changes to the inputs, judgments, assumptions and methods used in measuring the liability for future policy benefits during the three-month periods ended March 31, 2023 and 2022.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table reconciles the liability for future policy benefits to the C onsolidated B alance S heets as of March 31, 2023:



	At Original Discount Rates				At Current Discount Rates
	As of March 31,				As of March 31,
	2023		2022		2023		2022
Life(1):
American Income	$	4,247,758	$	3,916,187	$	5,169,780	$	6,005,498
Direct to Consumer	2,844,707		2,642,729		3,518,676		4,042,514
Liberty National	2,206,288		2,153,030		2,431,415		2,830,800
Other	2,952,802		2,846,161		3,646,706		4,292,945
Net liability for future policy benefits—long duration life	12,251,555		11,558,107		14,766,577		17,171,757

Health(1):
United American	130,992		135,891		136,510		169,521
Family Heritage	1,626,881		1,524,185		1,500,896		1,675,555
Liberty National	488,546		505,319		532,897		620,481
American Income	111,096		108,693		126,200		143,579
Direct to Consumer	961		1,004		1,009		1,112
Net liability for future policy benefits—long duration health	2,358,476		2,275,092		2,297,512		2,610,248

Deferred profit liability	177,248		184,451		177,248		184,451
Deferred annuity	907,797		1,027,087		907,797		1,027,087
Interest sensitive life	737,900		744,244		737,900		744,244
Other	9,540		8,118		9,540		8,118
Total future policy benefits	$	16,442,516	$	15,797,099	$	18,896,574	$	21,745,905

(1)Balances are presented net of the reinsurance recoverable and the effects of flooring the liability.

The following tables provide the weighted-average original and current discount rates for the liability for future policy benefits and the additional insurance liabilities for the periods ended March 31, 2023 and 2022:


	Life
	Weighted-average Discount Rates
	March 31, 2023								March 31, 2022
	American Income		DTC		Liberty National		Other		American Income		DTC		Liberty National		Other

Original discount rate	5.8	%	6.0	%	5.6	%	6.2	%	5.8	%	6.0	%	5.6	%	6.2	%
Current discount rate	4.9	%	5.0	%	5.0	%	5.0	%	4.0	%	4.0	%	3.9	%	3.9	%


	Health
	Weighted-average Discount Rates
	March 31, 2023										March 31, 2022
	United American		Family Heritage		Liberty National		American Income		DTC		United American		Family Heritage		Liberty National		American Income		DTC

Original discount rate	5.2	%	4.3	%	5.8	%	5.9	%	5.2	%	5.2	%	4.4	%	5.8	%	5.9	%	5.2	%
Current discount rate	4.8	%	4.9	%	4.9	%	4.8	%	4.8	%	3.8	%	3.9	%	3.6	%	3.8	%	3.8	%

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table provides the weighted-average durations of the liability for future policy benefits and the additional insurance liabilities for the periods ended March 31, 2023 and 2022:


		March 31,
	2023			2022
		At original discount rates	At current discount rates		At original discount rates	At current discount rates
Life
American Income		22.90	23.33		22.80	23.78
Direct to Consumer		20.24	21.82		20.81	22.93
Liberty National		14.94	15.63		15.08	16.85
Other		16.52	18.23		16.76	19.59

Health
United American		11.40	10.80		11.68	11.83
Family Heritage		14.91	14.43		15.28	15.80
Liberty National		9.31	9.66		9.01	10.11
American Income		12.15	12.74		12.45	13.95
Direct to Consumer		11.40	10.80		11.68	11.83

The following tables summarize the amount of gross premiums and interest, net of reinsurance, related to long duration life and health contracts that are recognized in the Condensed Consolidated Statements of Operations:


	Life
	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
American Income	$	387,145	$	61,431	$	369,737	$	57,262
Direct to Consumer	244,707		41,714		242,662		39,292
Liberty National	84,072		29,769		79,348		29,285
Other	51,835		44,275		52,387		42,697
Total	$	767,759	$	177,189	$	744,134	$	168,536


	Health
	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
United American	$	97,833	$	1,822	$	92,266	$	1,914
Family Heritage	96,090		15,977		89,540		14,545
Liberty National	46,745		6,920		47,496		7,226
American Income	28,096		1,632		27,937		1,601
Direct to Consumer	3,542		—		3,536		—
Total	$	272,306	$	26,351	$	260,775	$	25,286

Gross premiums are included within life and health premium on the Condensed Consolidated Statements of Operations, while the related interest expense is included in life and health policyholder benefits.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables provide the undiscounted and discounted expected future net premiums, expected future gross premiums and expected future policy benefits, at both original and current discount rates, for life and health contracts:


	Life
	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
	Not discounted		At original discount rates		At current discount rates		Not discounted		At original discount rates		At current discount rates
American Income
PV of expected future net premiums	$	7,617,532	$	4,325,957	$	4,467,637	$	7,115,131	$	4,043,480	$	4,646,747
PV of expected future gross premiums	23,041,514		13,054,486		13,575,751		21,851,854		12,374,587		14,324,455
PV of expected future policy benefits	28,821,998		8,573,734		9,637,463		26,930,450		7,959,694		10,652,256

DTC
PV of expected future net premiums	$	10,832,386	$	5,718,900	$	6,110,550	$	10,630,110	$	5,595,772	$	6,710,655
PV of expected future gross premiums	17,479,516		9,165,113		9,773,835		17,414,120		9,103,648		10,912,941
PV of expected future policy benefits	25,582,750		8,563,604		9,624,680		24,876,834		8,238,501		10,750,349

Liberty National
PV of expected future net premiums	$	1,889,419	$	1,070,775	$	1,128,083	$	1,855,371	$	1,043,765	$	1,224,988
PV of expected future gross premiums	4,453,139		2,599,082		2,667,795		4,265,146		2,485,460		2,848,626
PV of expected future policy benefits	8,658,766		3,284,594		3,559,012		8,514,395		3,208,055		4,066,234

Other
PV of expected future net premiums	$	919,924	$	448,677	$	483,056	$	869,727	$	419,434	$	511,832
PV of expected future gross premiums	3,798,669		1,920,302		2,126,949		3,907,011		1,950,624		2,441,512
PV of expected future policy benefits	12,392,224		3,427,535		4,166,527		12,277,130		3,290,269		4,848,375

Total
PV of expected future net premiums	$	21,259,261	$	11,564,309	$	12,189,326	$	20,470,339	$	11,102,451	$	13,094,222
PV of expected future gross premiums	48,772,838		26,738,983		28,144,330		47,438,131		25,914,319		30,527,534
PV of expected future policy benefits	75,455,738		23,849,467		26,987,682		72,598,809		22,696,519		30,317,214

As of March 31, 2023 for the life segment using current discount rates, the Company anticipates $12.2 billion of expected future net premiums and $28.1 billion of expected future gross premiums. As of March 31, 2022 using current discount rates, the Company anticipated $13.1 billion in expected future net premiums and $30.5 billion of expected future gross premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Health
	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
	Not discounted		At original discount rates		At current discount rates		Not discounted		At original discount rates		At current discount rates
United American
PV of expected future net premiums	$	4,685,306	$	2,948,641	$	2,997,723	$	4,763,592	$	2,957,769	$	3,337,152
PV of expected future gross premiums	6,783,819		4,279,547		4,346,007		6,781,444		4,226,705		4,765,664
PV of expected future policy benefits	4,909,212		3,079,790		3,132,462		5,057,861		3,095,417		3,508,485

Family Heritage
PV of expected future net premiums	$	2,908,079	$	1,750,468	$	1,664,414	$	2,784,235	$	1,699,135	$	1,790,237
PV of expected future gross premiums	6,442,316		3,846,392		3,682,300		5,897,650		3,570,212		3,791,575
PV of expected future policy benefits	6,358,594		3,387,380		3,174,672		6,004,155		3,232,281		3,476,639

Liberty National
PV of expected future net premiums	$	634,061	$	404,647	$	421,447	$	641,225	$	401,751	$	463,452
PV of expected future gross premiums	2,232,290		1,396,334		1,468,763		2,174,779		1,356,873		1,577,158
PV of expected future policy benefits	1,575,745		890,019		949,996		1,594,836		905,739		1,082,425

American Income
PV of expected future net premiums	$	351,655	$	197,446	$	200,666	$	323,828	$	183,679	$	208,064
PV of expected future gross premiums	1,760,671		984,216		1,037,339		1,723,857		963,321		1,130,227
PV of expected future policy benefits	626,151		308,170		326,533		599,187		292,356		351,631

Direct to Consumer
PV of expected future net premiums	$	131,187	$	85,966	$	90,243	$	148,614	$	94,408	$	109,734
PV of expected future gross premiums	171,266		112,442		118,105		204,317		130,162		151,140
PV of expected future policy benefits	124,597		83,001		87,090		143,711		92,272		107,034

Total
PV of expected future net premiums	8,710,288		5,387,168		5,374,493		8,661,494		5,336,742		5,908,639
PV of expected future gross premiums	17,390,362		10,618,931		10,652,514		16,782,047		10,247,273		11,415,764
PV of expected future policy benefits	13,594,299		7,748,360		7,670,753		13,399,750		7,618,065		8,526,214

As of March 31, 2023 for the health segment using current discount rates, the Company anticipates $5.4 billion of expected future net premiums and $10.6 billion of expected future gross premiums. As of March 31, 2022 using current discount rates, the Company anticipated $5.9 billion in expected future net premiums and $11.4 billion of expected future gross premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table summarizes the balances of, and changes in, policyholders’ account balances as of March 31, 2023 and 2022:


	Policyholders' Account Balances
	2023						2022
	Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds		Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds
Balance at January 1,	$	739,105	954,318		123,234		$	745,335	$	1,033,525	$	99,468
Issuances	—		202		—		—		340		—
Premiums received	6,030		4,776		21,662		6,297		8,216		2,044
Policy charges	(3,319)		—		—		(3,474)		—		—
Surrenders and withdrawals	(5,384)		(43,533)		(3,303)		(5,280)		(11,873)		(2,805)
Benefit payments	(7,844)		(15,784)		—		(8,999)		(12,073)		—

Interest credited	7,135		7,560		1,238		7,170		8,290		1,125
Other	2,177		258		(145)		3,195		662		292
Balance at March 31,	$	737,900	$	907,797	$	142,686	$	744,244	$	1,027,087	$	100,124


Weighted-average credit rate	3.92		%	3.29	%	3.78	%	3.91		%	3.26	%	4.58	%
Net amount at risk	$	1,847,128		N/A		N/A		$	1,952,631		N/A		N/A
Cash surrender value	676,247			907,797		142,686		693,201			1,027,064		100,124

The following tables present the policyholders' account balances by range of guaranteed minimum crediting rates and the related range of difference, if any, in basis points between rates being credited to policy holders and the respective guaranteed minimums:


	At March 31, 2023
Range of guaranteed minimum crediting rates	Interest Sensitive Life(1)		Deferred Annuity(1)		Other Policyholders' Funds(1)
At guaranteed minimum
Less than 3.00%	$	—	$	1,971	$	43,191
3.00%-3.99%	28,956		698,952		4,097
4.00%-4.99%	619,411		206,874		57,596
Greater than 5.00%	89,533		—		37,802
Total	$	737,900	$	907,797	$	142,686

(1)All of the Company's policyholders' account balances had actual crediting rates at the guaranteed minimum.


	At March 31, 2022
Range of guaranteed minimum crediting rates	Interest Sensitive Life(1)		Deferred Annuity(1)		Other Policyholders' Funds(1)
At guaranteed minimum
Less than 3.00%	$	—	$	2,254	$	—
3.00%-3.99%	28,684		811,865		2,911
4.00%-4.99%	626,179		212,968		58,990
Greater than 5.00%	89,381		—		38,223
Total	$	744,244	$	1,027,087	$	100,124

(1)All of the Company's policyholders' account balances had minimum crediting rates at the guaranteed minimum.

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 7—Deferred Acquisition Costs

The following tables roll forward the deferred policy acquisition costs for the three months ended March 31, 2023 and 2022:


	Life
	American Income		DTC		Liberty National		Other		Total












Balance at January 1, 2022	$	1,960,254	$	1,583,695	$	566,419	$	301,647	$	4,412,015
Capitalizations	114,428		48,216		20,465		3,487		186,596
Amortization expense	(33,513)		(23,172)		(11,046)		(4,198)		(71,929)
Foreign exchange adjustment	1,738		—		—		—		1,738
Experience adjustment	—		—		—		—		—
Balance at March 31, 2022	$	2,042,907	$	1,608,739	$	575,838	$	300,936	$	4,528,420
















Balance at January 1, 2023	$	2,258,291	$	1,676,931	$	610,723	$	298,346	$	4,844,291
Capitalizations	115,395		47,410		24,221		3,321		190,347
Amortization expense	(38,299)		(24,753)		(12,412)		(4,125)		(79,589)
Foreign exchange adjustment	(2,787)		—		—		—		(2,787)
Experience adjustment	—		—		—		—		—
Balance at March 31, 2023	$	2,332,600	$	1,699,588	$	622,532	$	297,542	$	4,952,262


	Health
	United American		Family Heritage		Liberty National		American Income		DTC		Total
Balance at January 1, 2022	$	81,140	$	388,967	$	127,537	$	49,406	$	2,032	$	649,082
Capitalizations	580		12,363		4,121		3,155		—		20,219
Amortization expense	(1,516)		(6,405)		(3,320)		(829)		(44)		(12,114)
Foreign exchange adjustment	—		—		—		88		—		88
Experience adjustment	—		—		—		—		—		—
Balance at March 31, 2022	$	80,204	$	394,925	$	128,338	$	51,820	$	1,988	$	657,275
















Balance at January 1, 2023	$	77,394	$	416,608	$	133,096	$	57,811	$	1,854	$	686,763
Capitalizations	507		15,097		4,882		3,143		—		23,629
Amortization expense	(1,513)		(6,560)		(3,250)		(938)		(47)		(12,308)
Foreign exchange adjustment	—		—		—		(126)		—		(126)
Experience adjustment	—		—		—		—		—		—
Balance at March 31, 2023	$	76,388	$	425,145	$	134,728	$	59,890	$	1,807	$	697,958

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following table presents a reconciliation of deferred policy acquisition costs to the Consolidated Balance Sheets as of March 31, 2023:


		March 31,
	2023			2022
Life
American Income		$	2,332,600		$	2,042,907
Direct to Consumer		1,699,588			1,608,739
Liberty National		622,532			575,838
Other		297,542			300,936
Total DAC - Life		4,952,262			4,528,420

Health
United American		76,388			80,204
Family Heritage		425,145			394,925
Liberty National		134,728			128,338
American Income		59,890			51,820
Direct to Consumer		1,807			1,988
Total DAC - Health		697,958			657,275

Annuity		4,218			5,988
Total		$	5,654,438		$	5,191,683

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 8—Liability for Unpaid Claims

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


	March 31, 2023		December 31, 2022

Balance at beginning of period	$	182,202	$	171,109
Incurred related to:
Current year	173,865		676,190
Prior year	(1,923)		(15,631)
Total incurred	171,942		660,559
Paid related to:
Current year	72,870		517,856
Prior year	99,876		131,610
Total paid	172,746		649,466
Balance at end of period	$	181,398	$	182,202

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


	March 31, 2023		December 31, 2022

Policy claims and other benefits payable:
Life insurance	$	307,898	$	325,017
Health insurance	181,398		182,202
Total	$	489,296	$	507,219

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 9—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, 2023 and December 31, 2022.

Pension Assets by Component at March 31, 2023


	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	$	—	$	22,482	$	—	$	22,482	4
Utilities	—		20,838		—		20,838		4
Energy	—		7,564		—		7,564		2
Other corporates	—		26,433		—		26,433		5
Total corporate bonds	—		77,317		—		77,317		15
Exchange traded fund(1)	276,478		—		—		276,478		53
U.S. Government and Agency	—		76,643		—		76,643		15
Other bonds	—		202		—		202		—
Guaranteed annuity contract(2)	—		43,297		—		43,297		8
Short-term investments	23,016		—		—		23,016		4
Other	12,379		—		—		12,379		2
	$	311,873	$	197,459	$	—	509,332		97
Other long-term investments(3)							13,767		3
Total pension assets							$	523,099	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 March 31, 2023, 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 Q1 2023 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, 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	$	—	$	35,649	$	—	$	35,649	7
Utilities	—		23,436		—		23,436		5
Energy	—		12,776		—		12,776		3
Other corporates	—		56,786		—		56,786		11
Total corporate bonds	—		128,647		—		128,647		26
Exchange traded fund(1)	258,297		—		—		258,297		52
U.S. Government and Agency	—		44,213		—		44,213		9
Other bonds	—		200		—		200		—
Guaranteed annuity contract(2)	—		43,116		—		43,116		8
Short-term investments	4,467		—		—		4,467		1
Other	6,547		—		—		6,547		1
	$	269,311	$	216,176	$	—	485,487		97
Other long-term investments(3)							14,288		3
Total pension assets							$	499,775	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, 2022, 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,
	2023		2022
Premiums paid for insurance coverage	$	443	$	443

	March 31, 2023		December 31, 2022
Total investments:
Company owned life insurance	$	54,788	$	54,681
Exchange traded funds	74,632		71,258
	$	129,420	$	125,939

GL Q1 2023 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, 2023 and December 31, 2022.


	March 31, 2023		December 31, 2022
Pension Plans	$	517,770	$	492,103
SERP	70,499		70,464
Pension benefit obligation	$	588,269	$	562,567

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, 2023 and 2022.

Components of Net Periodic Benefit Cost


	Three Months Ended March 31,
		2023		2022
Service cost		$	5,392	$	8,655
Interest cost		7,834		6,123
Expected return on assets		(9,656)		(8,885)
Amortization:
Prior service cost		269		158
Actuarial (gain) loss		(52)		3,209


Net periodic benefit cost		$	3,787	$	9,260

Note 10—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,
		2023	2022
Basic weighted average shares outstanding		96,388,211	99,273,616
Weighted average dilutive options outstanding		1,522,889	976,758
Diluted weighted average shares outstanding		97,911,100	100,250,374

Antidilutive shares		209,870	563,991

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

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 11—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, 2023								December 31, 2022
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	$	(38)	$	165,574	$	164,746	$	165,500

Senior notes	9/27/2018	9/15/2028	4.550%	550,000		(4,229)		545,771		546,348		545,601
Senior notes	8/21/2020	8/15/2030	2.150%	400,000		(3,668)		396,332		323,984		396,219
Senior notes(1)	5/19/2022	6/15/2032	4.800%	250,000		(4,412)		245,588		241,275		245,493

Junior subordinated debentures	11/17/2017	11/17/2057	5.275%	125,000		(1,585)		123,415		124,265		123,410
Junior subordinated debentures	6/14/2021	6/15/2061	4.250%	325,000		(7,752)		317,248		248,300		317,229
				1,815,612		(21,684)		1,793,928		1,648,918		1,793,452
Less current maturity of long-term debt				165,612		(38)		165,574		164,746		165,500
Total long-term debt				1,650,000		(21,646)		1,628,354		1,484,172		1,627,952

Current maturity of long-term debt				165,612		(38)		165,574		164,746		165,500
FHLB borrowings				45,000		—		45,000		45,000		—
Commercial paper				305,000		(1,327)		303,673		303,673		283,603
Total short-term debt				515,612		(1,365)		514,247		513,419		449,103

Total debt				$	2,165,612	$	(23,011)	$	2,142,601	$	1,997,591	$	2,077,055

(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 unsecured 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)**: FHLB membership provides our 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.

Globe Life owns $16.0 million in FHLB common stock as of March 31, 2023 and $14.3 million as of December 31, 2022. 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 Consolidated Balance Sheets.

Borrowings with the FHLB are subject to the availability of pledged assets at Globe Life. As of March 31, 2023, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $633 million, based on

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

pledged assets with a fair value of $850 million. As of March 31, 2023, $43 million in funding agreements were outstanding with the FHLB, compared to $23 million as of December 31, 2022. This amount is included in "Other policyholders' funds" on the Consolidated Balance Sheets. In addition, the Company had $45 million in short-term borrowings from the FHLB as of March 31, 2023, compared to $0 as of December 31, 2022, and this amount is recorded in "Short-term debt" on the Consolidated Balance Sheets.

Note 12—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 that manages the investment portfolio and cash flow for the insurance segments and the corporate function, which has been retrospectively adjusted to exclude the interest on deferred acquisition costs due to the adoption of ASU 2018-12 and the interest on debt. 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.

The following tables present segment premium revenue by each of Globe Life's distribution channels.

Premium Income by Distribution Channel


	Three Months Ended March 31, 2023
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	387,512	50	$	29,594	9	$	—	—	$	417,106	38
Direct to Consumer	247,667		32	17,248		5	—		—	264,915		24
Liberty National	85,203		11	46,972		15	—		—	132,175		12
United American	1,882		—	132,607		41	—		—	134,489		12
Family Heritage	1,480		—	96,072		30	—		—	97,552		9
Other	48,853		7	—		—	—		—	48,853		5
	$	772,597	100	$	322,493	100	$	—	—	$	1,095,090	100

GL Q1 2023 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, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	370,106	49	$	28,766	9	$	—	—	$	398,872	37
Direct to Consumer	245,732		33	17,928		6	—		—	263,660		25
Liberty National	80,560		11	47,760		15	—		—	128,320		12
United American	2,074		—	131,690		42	—		—	133,764		13
Family Heritage	1,359		—	89,540		28	—		—	90,899		8
Other	49,297		7	—		—	—		—	49,297		5
	$	749,128	100	$	315,684	100	$	—	—	$	1,064,812	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 policy liabilities 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 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 policy requirements. During the implementation of ASU 2018-12, the Company reviewed its segment disclosures and modified the measure of profitability of our Investment Segment due to the adoption impact of the standard and to align more appropriately with how we view and measure this segment. As of January 1, 2023, this measure was retrospectively adjusted to exclude the interest on deferred acquisition costs due to the adoption of ASU 2018-12 and the interest expense on 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 and interest on debt, 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

GL Q1 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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, 2023
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments		Consolidated
Revenue:
Premium	$	772,597	$	322,493	$	—	$	—	$	—	$	—	$	1,095,090
Net investment income	—		—		—		257,105		—		—		257,105
Other income	—		—		—		—		50		—		50
Total revenue	772,597		322,493		—		257,105		50		—		1,352,245
Expenses:
Policy benefits	507,977		190,962		7,541		1,447		—		—		707,927
Required interest on reserves	(189,821)		(26,323)		(10,259)		226,403		—		—		—

Amortization of acquisition costs	79,589		12,308		425		—		—		—		92,322
Commissions, premium taxes, and non-deferred acquisition costs	83,578		54,214		5		—		—		—		137,797
Insurance administrative expense(1)	—		—		—		—		73,907				73,907
Parent expense	—		—		—		—		2,585		—		2,585
Stock-based compensation expense	—		—		—		—		7,679		—		7,679
Interest expense	—		—		—		—		24,867		—		24,867
Total expenses	481,323		231,161		(2,288)		227,850		109,038		—		1,047,084
Subtotal	291,274		91,332		2,288		29,255		(108,988)		—		305,161
Non-operating items	—		—		—		—		—				—
Measure of segment profitability (pretax)	$	291,274	$	91,332	$	2,288	$	29,255	$	(108,988)	$	—	305,161

Realized gain (loss)—investments													(30,927)



Income before income taxes per Condensed Consolidated Statements of Operations													$	274,234

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

GL Q1 2023 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, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	749,128	$	315,684	$	—	$	—	$	—	$	—		$	1,064,812
Net investment income	—		—		—		244,894		—		—			244,894
Other income	—		—		—		—		164		—			164
Total revenue	749,128		315,684		—		244,894		164		—			1,309,870
Expenses:
Policy obligations	495,429		189,018		8,642		1,060		—		—			694,149
Required interest on reserves	(181,372)		(25,270)		(11,367)		218,009		—		—			—

Amortization of acquisition costs	71,929		12,114		453		—		—		—			84,496
Commissions, premium taxes, and non-deferred acquisition costs	73,548		51,952		9		—		—		—			125,509
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	459,534		227,814		(2,263)		219,069		104,184		112			1,008,450
Subtotal	289,594		87,870		2,263		25,825		(104,020)		(112)			301,420
Non-operating items	—		—		—		—		—		112		(2)	112
Measure of segment profitability (pretax)	$	289,594	$	87,870	$	2,263	$	25,825	$	(104,020)	$	—		301,532

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


Non-operating expenses														(112)
Income before income taxes per Condensed Consolidated Statements of Operations														$	294,176

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

(2)Non-operating expenses.

Note 13—Subsequent Events

Subsequent to the balance sheet date, the Company closed on a $170 million delayed draw term loan in April 2023 with an 18-month term and a variable interest rate. The proceeds from the term loan will be used to retire the 7.875% Senior Notes maturing on May 15, 2023.

During the quarter, we reviewed available information to evaluate whether an expected credit loss allowance should be established related to our holdings of First Republic Bank. Based on our review, which included analyst reports, public company information, and investment and business news relative to current events, we determined no allowance was needed. Subsequent to March 31, 2023, it was announced First Republic Bank had entered receivership effective April 30, 2023. The Company had $38.6 million outstanding, at amortized cost, with First Republic Bank as of March 31, 2023 with no associated allowance for credit losses. As of May 9, 2023, the fair value of the investment in First Republic Bank was $0.4 million.

GL Q1 2023 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, geopolitical events, 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, financing costs, and/or investment portfolio yield;

5.General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from geopolitical events and 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 2023 FORM 10-Q

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