Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

Globe Life Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollar amounts in thousands, except per share data)



	September 30, 2023		December 31, 2022
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2023—$18,914,693; 2022—$18,301,692, allowance for credit losses: 2023— $7,500; 2022— $0)	$	16,260,034	$	16,503,365
Policy loans	644,553		614,866
Other long-term investments (includes: 2023—$782,210; 2022—$768,689 under the fair value option)	1,050,106		976,016
Short-term investments	83,934		114,121
Total investments	18,038,627		18,208,368
Cash	85,546		92,559
Accrued investment income	284,642		259,581
Other receivables	616,881		589,079
Deferred acquisition costs	5,889,293		5,535,697
Goodwill	481,791		481,791
Other assets	769,247		760,066
Total assets	$	26,166,027	$	25,927,141
Liabilities:
Future policy benefits at current discount rates: (at original rates: 2023—$16,757,558; 2022—$16,306,870)	$	17,218,098	$	18,040,042
Unearned and advance premium	260,843		253,140
Policy claims and other benefits payable	503,072		507,219
Other policyholders' funds	218,210		123,236
Total policy liabilities	18,200,223		18,923,637
Current and deferred income taxes	554,853		434,649
Short-term debt	447,537		449,103
Long-term debt (estimated fair value: 2023—$1,586,674; 2022—$1,440,277)	1,798,583		1,627,952
Other liabilities	541,700		542,223
Total liabilities	21,542,896		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	543,693		529,661
Accumulated other comprehensive income (loss)	(2,458,974)		(2,790,313)
Retained earnings	7,519,893		6,894,535
Treasury stock, at cost: (2023—10,952,084 shares; 2022—8,478,288 shares)	(1,086,699)		(789,524)
Total shareholders' equity	4,623,131		3,949,577
Total liabilities and shareholders' equity	$	26,166,027	$	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 Q3 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollar amounts in thousands, except per share data)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Life premium	$	788,099	$	758,875	$	2,342,429	$	2,264,895
Health premium	331,236		320,406		982,916		956,397
Other premium	—		1		—		1
Total premium	1,119,335		1,079,282		3,325,345		3,221,293
Net investment income	266,926		246,711		785,275		736,317
Realized gains (losses)	(2,193)		(29,155)		(78,963)		(66,845)

Other income	50		399		185		862
Total revenue	1,384,118		1,297,237		4,031,842		3,891,627

Benefits and expenses:
Life policyholder benefits(1)	515,676		545,933		1,536,317		1,533,726
Health policyholder benefits(2)	193,790		182,409		580,676		561,502
Other policyholder benefits	9,578		9,234		27,488		27,928
Total policyholder benefits	719,044		737,576		2,144,481		2,123,156

Amortization of deferred acquisition costs	95,757		88,012		282,159		258,693
Commissions, premium taxes, and non-deferred acquisition costs	138,677		124,768		414,933		376,490
Other operating expense	85,870		88,140		256,074		262,150
Interest expense	25,955		23,965		76,640		65,737
Total benefits and expenses	1,065,303		1,062,461		3,174,287		3,086,226

Income before income taxes	318,815		234,776		857,555		805,401
Income tax benefit (expense)	(61,732)		(44,190)		(161,602)		(153,358)



Net income	$	257,083	$	190,586	$	695,953	$	652,043




Basic net income per common share	$	2.72	$	1.96	$	7.29	$	6.64




Diluted net income per common share	$	2.68	$	1.94	$	7.20	$	6.58

(1)Net of the total remeasurement, including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a $11.3 million gain and a $45.2 million loss for the three months ended September 30, 2023 and 2022, respectively. Net of the total remeasurement gain of $16.5 million for the nine months ended September 30, 2023 and the total remeasurement loss of $49.3 million for the same period in 2022.

(2)Net of the total remeasurement, including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a $7.8 million gain and $9.7 million gain for the three months ended September 30, 2023 and 2022, respectively. Net of the total remeasurement gain of $8.3 million and $13.8 million for the nine months ended September 30, 2023 and 2022, respectively.

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 Q3 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollar amounts in thousands)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	257,083	$	190,586	$	695,953	$	652,043

Other comprehensive income (loss):

Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period	(1,068,091)		(1,368,910)		(932,301)		(5,704,042)

Other reclassification adjustments included in net income	851		12,142		82,866		30,371
Foreign exchange adjustment on fixed maturities recorded at fair value	1,603		2,856		603		4,975



Total unrealized investment gains (losses)	(1,065,637)		(1,353,912)		(848,832)		(5,668,696)
Less applicable tax (expense) benefit	223,782		284,319		178,250		1,190,428
Unrealized gains (losses) on investments, net of tax	(841,855)		(1,069,593)		(670,582)		(4,478,268)

Future Policy Benefits:
Change in discount rate on future policy benefits	1,687,310		1,711,223		1,272,631		7,308,021
Less applicable tax (expense) benefit	(354,334)		(359,354)		(267,252)		(1,534,684)
Future policy benefit adjustments, net of tax	1,332,976		1,351,869		1,005,379		5,773,337






Foreign exchange translation:
Foreign exchange translation adjustments, other than securities	(7,881)		(22,375)		(4,039)		(36,556)
Less applicable tax (expense) benefit	1,655		4,697		847		7,675
Foreign exchange translation adjustments, other than securities, net of tax	(6,226)		(17,678)		(3,192)		(28,881)

Pension:



Pension adjustments	35		3,438		(336)		10,316
Less applicable tax (expense) benefit	(7)		(721)		70		(2,166)
Pension adjustments, net of tax	28		2,717		(266)		8,150

Other comprehensive income (loss)	484,923		267,315		331,339		1,274,338
Comprehensive income (loss)	$	742,006	$	457,901	$	1,027,292	$	1,926,381

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 Q3 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

Comprehensive income (loss)	—		—		—		17,196		215,260		—		232,456
Common dividends declared ($0.2250 per share)	—		—		—		—		(21,330)		—		(21,330)
Acquisition of treasury stock	—		—		—		—		—		(89,755)		(89,755)
Stock-based compensation	—		—		7,487		—		—		—		7,487
Exercise of stock options	—		—		—		—		(665)		5,822		5,157

Balance at June 30, 2023	—		105,218		536,126		(2,943,897)		7,285,809		(1,002,950)		3,980,306



Comprehensive income (loss)	—		—		—		484,923		257,083		—		742,006
Common dividends declared ($0.2250 per share)	—		—		—		—		(21,181)		—		(21,181)
Acquisition of treasury stock	—		—		—		—		—		(96,898)		(96,898)
Stock-based compensation	—		—		7,567		—		—		—		7,567
Exercise of stock options	—		—		—		—		(1,818)		13,149		11,331

Balance at September 30, 2023	$	—	$	105,218	$	543,693	$	(2,458,974)	$	7,519,893	$	(1,086,699)	$	4,623,131

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 Q3 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Shareholders' Equity (Continued)

(Unaudited)

(Dollar amounts in thousands, except per share data)


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

Balance at December 31, 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

Comprehensive income (loss)	—		—		—		598,981		223,973		—		822,954
Common dividends declared ($0.2075 per share)	—		—		—		—		(20,238)		—		(20,238)
Acquisition of treasury stock	—		—		—		—		—		(143,939)		(143,939)
Stock-based compensation	—		—		8,448		—		—		—		8,448
Exercise of stock options	—		—		—		—		(2,419)		11,222		8,803

Balance at June 30, 2022	—		109,218		531,516		(3,228,025)		6,863,681		(1,056,087)		3,220,303



Comprehensive income (loss)	—		—		—		267,315		190,586		—		457,901
Common dividends declared ($0.2075 per share)	—		—		—		—		(20,126)		—		(20,126)
Acquisition of treasury stock	—		—		—		—		—		(72,031)		(72,031)
Stock-based compensation	—		—		9,120		—		—		—		9,120
Exercise of stock options	—		—		—		—		(3,240)		18,042		14,802

Balance at September 30, 2022	$	—	$	109,218	$	540,636	$	(2,960,710)	$	7,030,901	$	(1,110,076)	$	3,609,969

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 Q3 2023 FORM 10-Q

Globe Life Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollar amounts in thousands)



	Nine Months Ended September 30,
	2023		2022













Cash provided from (used for) operating activities	$	1,091,028	$	1,050,387

Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold	192,007		346,722
Fixed maturities available for sale—matured or other redemptions	212,936		387,787
Other long-term investments	133,163		55,877
Total investments sold or matured	538,106		790,386
Acquisition of investments:
Fixed maturities—available for sale	(1,076,699)		(1,178,751)
Other long-term investments	(199,093)		(186,275)
Total investments acquired	(1,275,792)		(1,365,026)
Net (increase) decrease in policy loans	(29,687)		(15,792)
Net (increase) decrease in short-term investments	30,187		(16,628)


Additions to property and equipment	(36,449)		(19,766)

Investments in low-income housing interests	(54,337)		(64,023)
Cash provided from (used for) investing activities	(827,972)		(690,849)

Cash provided from (used for) financing activities:
Issuance of common stock	61,079		49,536
Cash dividends paid to shareholders	(62,945)		(60,441)
Repayment of debt	(165,612)		(150,000)
Proceeds from issuance of debt	170,000		250,492
Payment for debt issuance costs	(757)		(5,272)
Net borrowing from FHLB	198,000		—
Net borrowing (repayment) of commercial paper	(34,066)		(60,582)
Acquisition of treasury stock	(365,929)		(335,452)
Net receipts (payments) from deposit-type products	(69,526)		(66,078)
Cash provided from (used for) financing activities	(269,756)		(377,797)

Effect of foreign exchange rate changes on cash	(313)		11,682
Net increase (decrease) in cash	(7,013)		(6,577)
Cash at beginning of year	92,559		92,163
Cash at end of period	$	85,546	$	85,586

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 Q3 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 September 30, 2023, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended September 30, 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 Q3 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, and lapses. 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 regularly reviews its cash flow assumptions (mortality, morbidity, and lapses) used to calculate the change in the liability for future policy benefits. These cash flow assumptions are updated as necessary in the third quarter of 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 assumptions are based on Company 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 lapses. 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 Q3 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 (also referred to as Long Duration Targeted Improvements or LDTI) 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 Q3 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 Q3 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 Q3 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 September 30, 2022					Nine Months Ended September 30, 2022

		As Previously Reported		Adoption Impact		As Adjusted		As Previously Reported		Adoption Impact		As Adjusted
Revenue:
Life premium		$	755,115	$	3,760	$	758,875	$	2,269,641	$	(4,746)	$	2,264,895
Health premium		319,289		1,117		320,406		955,478		919		956,397


Net investment income		245,625		1,086		246,711		733,101		3,216		736,317





Benefits and expenses:
Life policyholder benefits		494,627		51,306		545,933		1,555,004		(21,278)		1,533,726
Health policyholder benefits		198,415		(16,006)		182,409		592,488		(30,986)		561,502
Other policyholder benefits		6,986		2,248		9,234		21,110		6,818		27,928


Amortization of deferred acquisition costs		156,129		(68,117)		88,012		469,718		(211,025)		258,693
Commissions, premium taxes, and non-deferred acquisition costs		93,028		31,740		124,768		277,436		99,054		376,490




Income before income taxes		229,983		4,793		234,776		648,594		156,807		805,401
Income tax benefit (expense)		(43,204)		(986)		(44,190)		(120,450)		(32,908)		(153,358)



Net income		$	186,779	$	3,807	$	190,586	$	528,144	$	123,899	$	652,043




Basic net income per common share		$	1.92	$	0.04	$	1.96	$	5.38	$	1.26	$	6.64




Diluted net income per common share		$	1.90	$	0.04	$	1.94	$	5.33	$	1.25	$	6.58

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

GL Q3 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 and nine month periods ended September 30, 2023 and 2022:


	Three Months Ended September 30, 2023
	Available for Sale Assets		Future Policy Benefits		Foreign Exchange		Pension Adjustments		Total
Balance at July 1, 2023	$	(1,249,399)	$	(1,696,801)	$	1,353	$	950	$	(2,943,897)
Other comprehensive income (loss) before reclassifications, net of tax	(842,527)		1,332,976		(6,226)		—		484,223
Reclassifications, net of tax	672		—		—		28		700
Other comprehensive income (loss)	(841,855)		1,332,976		(6,226)		28		484,923
Balance at September 30, 2023	$	(2,091,254)	$	(363,825)	$	(4,873)	$	978	$	(2,458,974)


	Three Months Ended September 30, 2022
	Available for Sale Assets		Future Policy Benefits		Foreign Exchange		Pension Adjustments		Total
Balance at July 1, 2022	$	(643,385)	$	(2,494,442)	$	8,045	$	(98,243)	$	(3,228,025)
Other comprehensive income (loss) before reclassifications, net of tax	(1,079,185)		1,351,869		(17,678)		—		255,006
Reclassifications, net of tax	9,592		—		—		2,717		12,309
Other comprehensive income (loss)	(1,069,593)		1,351,869		(17,678)		2,717		267,315
Balance at September 30, 2022	$	(1,712,978)	$	(1,142,573)	$	(9,633)	$	(95,526)	$	(2,960,710)


	Nine Months Ended September 30, 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	(736,046)		1,005,379		(3,192)		—		266,141
Reclassifications, net of tax	65,464		—		—		(266)		65,198
Other comprehensive income (loss)	(670,582)		1,005,379		(3,192)		(266)		331,339
Balance at September 30, 2023	$	(2,091,254)	$	(363,825)	$	(4,873)	$	978	$	(2,458,974)


	Nine Months Ended September 30, 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	(4,502,261)		5,773,337		(28,881)		—		1,242,195
Reclassifications, net of tax	23,993		—		—		8,150		32,143
Other comprehensive income (loss)	(4,478,268)		5,773,337		(28,881)		8,150		1,274,338
Balance at September 30, 2022	$	(1,712,978)	$	(1,142,573)	$	(9,633)	$	(95,526)	$	(2,960,710)

GL Q3 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 and nine month periods ended September 30, 2023 and 2022.


	Three Months Ended September 30,				Nine Months Ended September 30,				Affected line items in the Statements of Operations
Component Line Item	2023		2022		2023		2022
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses	$	1,759	$	12,256	$	85,230	$	29,741	Realized (gains) losses

Amortization of (discount) premium	(908)		(114)		(2,364)		630		Net investment income
Total before tax	851		12,142		82,866		30,371
Tax	(179)		(2,550)		(17,402)		(6,378)		Income taxes
Total after-tax	672		9,592		65,464		23,993
Pension adjustments:
Amortization of prior service cost	269		158		807		474		Other operating expense
Amortization of actuarial (gain) loss	(234)		3,280		(1,143)		9,842		Other operating expense
Total before tax	35		3,438		(336)		10,316
Tax	(7)		(721)		70		(2,166)		Income taxes
Total after-tax	28		2,717		(266)		8,150
Total reclassification (after-tax)	$	700	$	12,309	$	65,198	$	32,143

GL Q3 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 September 30, 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 September 30, 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	$	395,382	$	—	$	—	$	(55,738)	$	339,644	2
States, municipalities, and political subdivisions	3,319,521		—		14,159		(696,791)		2,636,889		16
Foreign governments	42,085		—		—		(12,497)		29,588		—
Corporates, by sector:
Financial	4,938,112		—		22,380		(672,806)		4,287,686		27
Utilities	1,998,424		—		13,550		(190,901)		1,821,073		11
Energy	1,426,415		—		13,284		(136,363)		1,303,336		8
Other corporate sectors	6,671,115		(7,500)		32,193		(976,041)		5,719,767		35
Total corporates	15,034,066		(7,500)		81,407		(1,976,111)		13,131,862		81
Collateralized debt obligations	36,843		—		4,842		—		41,685		—
Other asset-backed securities	86,796		—		2		(6,432)		80,366		1
Total fixed maturities	$	18,914,693	$	(7,500)	$	100,410	$	(2,747,569)	$	16,260,034	100

(1)Amount reported in the balance sheet.

(2)At fair value.

GL Q3 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.

The Company has exposure to banks as part of its fixed maturity portfolio carrying an average rating of A- . The Company’s bank securities had a fair value of $1.2 billion (7% of the total fixed maturity portfolio) and $1.3 billion (8% of the total fixed maturity portfolio) at September 30, 2023 and December 31, 2022, respectively. Additionally, the Company has exposure to real estate investment trusts with an average rating of BBB+, which had a fair value of $382 million (2% of the total fixed maturity portfolio) and $428 million (3% of the total fixed maturity portfolio) at September 30, 2023 and December 31, 2022, respectively.

A schedule of fixed maturities available for sale by contractual maturity date at September 30, 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 September 30, 2023
	Amortized Cost, net		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	155,607	$	154,933
Due after one year through five years	1,149,496		1,142,206
Due after five years through ten years	1,818,217		1,732,283
Due after ten years through twenty years	8,160,666		7,271,668
Due after twenty years	7,499,521		5,836,847
Mortgage-backed and asset-backed securities	123,686		122,097
	$	18,907,193	$	16,260,034

GL Q3 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 and nine month periods ended September 30, 2023 and 2022 is summarized as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2023		2022		% Change	2023		2022		% Change
Fixed maturities available for sale	$	237,609	$	227,673	4	$	704,095	$	679,710	4
Policy loans	12,446		11,716		6	36,435		34,724		5
Other long-term investments(1)	19,993		10,933		83	52,672		34,349		53
Short-term investments	1,396		969			4,811		1,093
	271,444		251,291		8	798,013		749,876		6
Less investment expense	(4,518)		(4,580)		(1)	(12,738)		(13,559)		(6)
Net investment income	$	266,926	$	246,711	8	$	785,275	$	736,317	7

(1)For the three months ended September 30, 2023 and 2022, the investment funds, accounted for under the fair value option method, recorded $14.0 million and $8.4 million, respectively, in net investment income. For the nine months ended September 30, 2023 and 2022, the investment funds, accounted for under the fair value option method, recorded $37.2 million and $27.7 million, respectively, in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Fixed maturities available for sale:
Proceeds from sales(1)	$	46,210	$	127,695	$	192,034	$	346,722
Gross realized gains	261		165		308		938
Gross realized losses	(67,018)		(11,537)		(77,879)		(56,384)

(1)As of September 30, 2023 and 2022, the Company had $27 thousand and $0 of unsettled trades, respectively.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)	$	(66,767)	$	(12,256)	$	(77,730)	$	(30,128)

Provision for credit losses	65,008		—		(7,500)		387
Fair value option—change in fair value	868		(11,551)		7,954		(15,942)
Other investments	(1,302)		(5,348)		(1,687)		(21,162)
Realized gains (losses) from investments	(2,193)		(29,155)		(78,963)		(66,845)


Applicable tax	461		6,122		16,583		14,037
Realized gains (losses), net of tax	$	(1,732)	$	(23,033)	$	(62,380)	$	(52,808)

(1)During the three months ended September 30, 2023 and 2022, the Company recorded $21.1 million and $22.1 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period. During the nine months ended September 30, 2023 and 2022, the Company recorded $39.0 million and $24.0 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period. During the three months ended September 30, 2023, the Company sold $66 million in securities for which there was a provision for credit losses relating to holdings in Signature Bank New York and First Republic Bank, which entered receivership during the first half of the year.

GL Q3 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 September 30, 2023 and December 31, 2022:


	Fair Value Measurement at September 30, 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	$	—		$	339,644		$	—		$	339,644
States, municipalities, and political subdivisions	—			2,636,889			—			2,636,889
Foreign governments	—			29,588			—			29,588
Corporates, by sector:
Financial	—			4,164,257			123,429			4,287,686
Utilities	—			1,715,887			105,186			1,821,073
Energy	—			1,293,028			10,308			1,303,336
Other corporate sectors	—			5,523,239			196,528			5,719,767
Total corporates	—			12,696,411			435,451			13,131,862
Collateralized debt obligations	—			—			41,685			41,685
Other asset-backed securities	—			80,366			—			80,366
Total fixed maturities	$	—		$	15,782,898		$	477,136		$	16,260,034
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 Q3 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	—			(8,424)			(15,968)			(24,392)
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			3,429			5			3,434
Other(1)	—			(3,684)			(26,669)			(30,353)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2023	$	—		$	41,685		$	435,451		$	477,136
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	—			(13,163)			(114,525)			(127,688)
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			3,382			6			3,388
Other(1)	—			(3,129)			(42,604)			(45,733)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2022	$	—		$	50,595		$	484,565		$	535,160
Percent of total fixed maturities	—		%	—		%	3		%	3		%

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

GL Q3 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 September 30, 2023	$	—	$	(8,424)	$	(15,968)	$	(24,392)
At September 30, 2022	—		(13,163)		(114,525)		(127,688)

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


	Less than Twelve Months	Twelve Months or Longer	Total
Number of issues (CUSIPs) held:
As of September 30, 2023	713	1,640	2,353
As of December 31, 2022	1,819	157	1,976

Globe Life's entire fixed maturity portfolio consisted of 2,446 issues by 990 different issuers at September 30, 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 September 30, 2023 and December 31, 2022.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at September 30, 2023 and December 31, 2022.

Analysis of Gross Unrealized Investment Losses


	At September 30, 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	$	1,920	$	(192)	$	337,694	$	(55,546)	$	339,614	$	(55,738)
States, municipalities, and political subdivisions	941,815		(77,118)		1,408,695		(619,673)		2,350,510		(696,791)
Foreign governments	1,464		(24)		28,124		(12,473)		29,588		(12,497)
Corporates, by sector:
Financial	1,399,885		(90,121)		2,066,825		(533,152)		3,466,710		(623,273)
Utilities	693,321		(36,324)		649,894		(152,242)		1,343,215		(188,566)
Energy	370,280		(16,721)		522,381		(108,746)		892,661		(125,467)
Other corporate sectors	1,005,726		(67,518)		3,507,313		(890,230)		4,513,039		(957,748)
Total corporates	3,469,212		(210,684)		6,746,413		(1,684,370)		10,215,625		(1,895,054)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		69,047		(5,849)		69,047		(5,849)
Total investment grade securities	4,414,411		(288,018)		8,589,973		(2,377,911)		13,004,384		(2,665,929)

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

Corporates, by sector:
Financial	25,065		(3,110)		144,381		(46,423)		169,446		(49,533)
Utilities	—		—		27,772		(2,335)		27,772		(2,335)
Energy	—		—		33,774		(10,896)		33,774		(10,896)
Other corporate sectors	45,943		(1,920)		56,687		(16,373)		102,630		(18,293)
Total corporates	71,008		(5,030)		262,614		(76,027)		333,622		(81,057)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		11,262		(583)		11,262		(583)
Total below investment grade securities	71,008		(5,030)		273,876		(76,610)		344,884		(81,640)
Total fixed maturities	$	4,485,419	$	(293,048)	$	8,863,849	$	(2,454,521)	$	13,349,268	$	(2,747,569)

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 unlikely that management will be required to sell the fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.

GL Q3 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 Q3 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Allowance for credit losses beginning balance	$	72,508	$	—	$	—	$	387
Additions to allowance for which credit losses were not previously recorded	—		—		72,508		—
Additions (reductions) to allowance for fixed maturities that previously had an allowance	(65,008)		—		(65,008)		—
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	$	7,500	$	—	$	7,500	$	—

As of September 30, 2023 and December 31, 2022, the Company did not have any fixed maturities in non-accrual status. During the three months ended September 30, 2023, the Company sold $66 million in securities for which there was a provision for credit losses relating to holdings in Signature Bank New York and First Republic Bank, which entered receivership during the first half of the year.

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


	September 30, 2023		December 31, 2022
Investment funds	$	782,210	$	768,689
Commercial mortgage loan participations	228,802		181,305
Other	39,094		26,022
Total	$	1,050,106	$	976,016

The following table presents additional information about the Company's investment funds as of September 30, 2023 and December 31, 2022 at fair value:


	Fair Value				Unfunded Commitments
Investment Category	September 30, 2023		December 31, 2022		September 30, 2023		Redemption Term/Notice




Commercial mortgage loans	$	419,120	$	431,405	$	575,445	Fully redeemable and non-redeemable with varying terms.
Opportunistic and private credit	162,202		158,524		135,000		Fully redeemable and non-redeemable with varying terms.


Infrastructure	166,603		159,534		16,279		Fully redeemable and non-redeemable with varying terms.


Other	34,285		19,226		60,000		Non-redeemable with varying terms
Total investment funds	$	782,210	$	768,689	$	786,724

The Company had $103 million of capital called during the year from existing investment funds.

GL Q3 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 September 30, 2023 and December 31, 2022 are as follows:


	September 30, 2023			December 31, 2022
	Carrying Value		% of Total	Carrying Value		% of Total
Property type:
Multi-family	$	99,265	43	$	42,232	23
Mixed use	39,012		17	62,375		34
Industrial	37,778		17	27,248		15
Hospitality	25,159		11	27,796		15
Retail	23,842		10	15,342		9
Office	6,734		3	8,101		5

Total recorded investment	231,790		101	183,094		101
Less allowance for credit losses	(2,988)		(1)	(1,789)		(1)
Carrying value, net of allowance for credit losses	$	228,802	100	$	181,305	100


	September 30, 2023			December 31, 2022
	Carrying Value		% of Total	Carrying Value		% of Total
Geographic location:
California	$	51,371	22	$	64,477	36
Texas	45,775		20	22,905		13
Florida	33,367		15	33,182		18
New Jersey	25,090		11	—		—
New York	20,278		9	19,167		11
Washington	14,962		6	14,925		8
Other	40,947		18	28,438		15
Total recorded investment	231,790		101	183,094		101
Less allowance for credit losses	(2,988)		(1)	(1,789)		(1)
Carrying value, net of allowance for credit losses	$	228,802	100	$	181,305	100

GL Q3 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.


	September 30, 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%	$	26,987	$	151,455	$	36,769	$	215,211	93
70% to 80%	—		—		—		—		—
81% to 90%	8,391		—		1,153		9,544		4
Greater than 90%	7,035		—		—		7,035		3
Total	$	42,413	$	151,455	$	37,922	231,790		100
Less allowance for credit losses							(2,988)
Total, net of allowance for credit losses							$	228,802

(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 September 30, 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 nine months ended September 30, 2023, the allowance for credit losses increased $1.2 million. Additionally, there was one foreclosure that resulted in a $2.9 million after tax realized loss during the period. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Allowance for credit losses beginning balance	$	2,928	$	1,109	$	1,789	$	827

Provision (reversal) for credit losses	60		1,051		1,199		1,333

Allowance for credit losses ending balance	$	2,988	$	2,160	$	2,988	$	2,160

GL Q3 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 September 30, 2023 and December 31, 2022. As of September 30, 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 $23 million as of September 30, 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 September 30, 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; alleged employment discrimination; alleged worker misclassification; and miscellaneous other causes of action. Based upon information presently available, and in light of legal and other factual defenses available to the Parent Company and its subsidiaries, management does not believe that it is reasonably possible that such litigation will have a material adverse effect on Globe Life's financial condition, future operating results or liquidity; however, assessing the eventual outcome of litigation necessarily involves forward-looking speculation as to judgments to be made by judges, juries and appellate courts in the future. This bespeaks caution, particularly in states with reputations for high punitive damage verdicts.

On September 30, 2022, putative class action litigation was filed against American Income Life Insurance Company (“American Income”), Giglione-Ackerman Agency, LLC, Eric Giglione and David Ackerman (collectively, “Defendants”) in New Jersey Superior Court (Atiya Bell, et al. v. American Income Life Insurance Company, et al., Case No. MID-L-004928-22). American Income subsequently removed the case to United States District Court for the District of New Jersey (Case No. 2:22-cv-06913-CCC-MAH). Plaintiffs Atiya Bell and Abel Flores (“Plaintiffs”) are former New Jersey independent sales agents who allege they should have been classified as employees, and assert claims under New Jersey state law on behalf of (i) a putative class of registered agents in New Jersey who have worked remotely for at least one week since March 9, 2020, and (ii) a putative class of registered agents in New Jersey who trained for at least one week to become sales agents for American Income in New Jersey during the six years prior to September 30, 2022. Plaintiffs make claims under the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law for the alleged failure to pay minimum wages and overtime pay, including for time spent in training, liquidated damages and attorney’s fees and costs. On December 21, 2022, American Income filed a motion to compel arbitration of the claims pursuant to the provisions of the agent agreements. The Court denied American Income’s motion without prejudice “pending further factual development of the record.” The Court ordered the parties “to conduct limited discovery on the issue of arbitrability,” after which American Income intends to renew its motion to compel arbitration.

GL Q3 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 for the three and nine month periods ended September 30, 2023 and 2022:


	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 on future cash flows	34,266		79,571		17,719		35,214		166,770
Effect of actual variances from expected experience	(76,338)		(180,498)		(15,119)		(7,237)		(279,192)
Adjusted balance at January 1, 2022	3,864,026		5,432,814		1,042,842		444,118		10,783,800
Issuances(1)	596,320		499,777		73,299		23,148		1,192,544
Interest accrual(2)	131,251		204,334		38,378		15,575		389,538
Net premiums collected(3)	(366,147)		(451,993)		(95,338)		(32,628)		(946,106)

Effect of changes in the foreign exchange rate	(21,643)		—		—		—		(21,643)
Ending balance at original discount rates	4,203,807		5,684,932		1,059,181		450,213		11,398,133

Effect of change from original to current discount rates	(26,258)		153,525		17,403		15,056		159,726
Balance at September 30, 2022	$	4,177,549	$	5,838,457	$	1,076,584	$	465,269	$	11,557,859

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 on future cash flows	14,265		36,170		5,178		8,419		64,032
Effect of actual variances from expected experience	(103,922)		(219,723)		(26,533)		(13,882)		(364,060)
Adjusted balance at January 1, 2023	4,157,066		5,497,311		1,044,768		443,746		11,142,891
Issuances(1)	557,844		450,361		92,894		21,756		1,122,855
Interest accrual(2)	147,968		214,988		40,362		17,071		420,389
Net premiums collected(3)	(388,288)		(461,367)		(100,093)		(34,542)		(984,290)

Effect of changes in the foreign exchange rate	(631)		—		—		—		(631)
Ending balance at original discount rates	4,473,959		5,701,293		1,077,931		448,031		11,701,214

Effect of change from original to current discount rates	(155,254)		(31,118)		(18,702)		(1,499)		(206,573)
Balance at September 30, 2023	$	4,318,705	$	5,670,175	$	1,059,229	$	446,532	$	11,494,641

(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 Q3 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 net premiums
	American Income		DTC		Liberty National		Other		Total
Balance at July 1, 2022	$	4,379,496	$	6,164,946	$	1,123,072	$	461,964	$	12,129,478
Beginning balance at original discount rates	4,146,094		5,616,356		1,042,155		416,918		11,221,523
Effect of changes in assumptions on future cash flows	34,266		79,571		17,719		35,214		166,770
Effect of actual variances from expected experience	(58,998)		(89,037)		(5,994)		(3,741)		(157,770)
Adjusted balance at July 1, 2022	4,121,362		5,606,890		1,053,880		448,391		11,230,523
Issuances(1)	176,042		160,780		24,493		7,553		368,868
Interest accrual(2)	44,410		68,476		12,793		5,270		130,949
Net premiums collected(3)	(123,636)		(151,214)		(31,985)		(11,001)		(317,836)

Effect of changes in the foreign exchange rate	(14,371)		—		—		—		(14,371)
Ending balance at original discount rates	4,203,807		5,684,932		1,059,181		450,213		11,398,133

Effect of change from original to current discount rates	(26,258)		153,525		17,403		15,056		159,726
Balance at September 30, 2022	$	4,177,549	$	5,838,457	$	1,076,584	$	465,269	$	11,557,859

Balance at July 1, 2023	$	4,472,847	$	5,988,577	$	1,110,017	$	471,279	$	12,042,720
Beginning balance at original discount rates	4,399,053		5,700,354		1,071,561		445,475		11,616,443
Effect of changes in assumptions on future cash flows	14,265		36,170		5,178		8,419		64,032
Effect of actual variances from expected experience	(34,571)		(91,120)		(10,938)		(7,232)		(143,861)
Adjusted balance at July 1, 2023	4,378,747		5,645,404		1,065,801		446,662		11,536,614
Issuances(1)	181,823		136,611		32,045		7,143		357,622
Interest accrual(2)	51,119		72,515		13,707		5,741		143,082
Net premiums collected(3)	(131,329)		(153,237)		(33,622)		(11,515)		(329,703)

Effect of changes in the foreign exchange rate	(6,401)		—		—		—		(6,401)
Ending balance at original discount rates	4,473,959		5,701,293		1,077,931		448,031		11,701,214

Effect of change from original to current discount rates	(155,254)		(31,118)		(18,702)		(1,499)		(206,573)
Balance at September 30, 2023	$	4,318,705	$	5,670,175	$	1,059,229	$	446,532	$	11,494,641

(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 Q3 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 on future cash flows		48,534			104,910			33,457			39,725			226,626
Effect of actual variances from expected experience		(81,429)			(174,141)			(14,582)			(8,325)			(278,477)
Adjusted balance at January 1, 2022		7,711,306			8,088,028			3,225,039			3,298,706			22,323,079
Issuances(1)		596,320			499,774			73,299			23,148			1,192,541
Interest accrual(2)		305,526			323,432			126,814			145,941			901,713
Benefit payments(3)		(287,253)			(476,182)			(168,502)			(92,033)			(1,023,970)

Effect of changes in the foreign exchange rate		(51,726)			—			—			—			(51,726)
Ending balance at original discount rates		8,274,173			8,435,052			3,256,650			3,375,762			23,341,637
Effect of change from original to current discount rates		569,356			609,256			108,603			503,107			1,790,322
Balance at September 30, 2022		$	8,843,529		$	9,044,308		$	3,365,253		$	3,878,869		$	25,131,959





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 on future cash flows	13,344		34,407		6,156		11,661		65,568
Effect of actual variances from expected experience	(109,386)		(227,639)		(27,482)		(17,962)		(382,469)
Adjusted balance at January 1, 2023	8,313,719		8,284,660		3,251,654		3,397,403		23,247,436
Issuances(1)	557,844		450,362		92,894		21,756		1,122,856
Interest accrual(2)	335,349		342,208		130,712		152,378		960,647
Benefit payments(3)	(296,133)		(432,393)		(153,294)		(86,008)		(967,828)

Effect of changes in the foreign exchange rate	(819)		—		—		—		(819)
Ending balance at original discount rates	8,909,960		8,644,837		3,321,966		3,485,529		24,362,292
Effect of change from original to current discount rates	80,477		228,607		(46,234)		282,118		544,968
Balance at September 30, 2023	$	8,990,437	$	8,873,444	$	3,275,732	$	3,767,647	$	24,907,260

(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 Q3 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 July 1, 2022		$	9,512,271		$	9,664,209		$	3,622,642		$	4,220,830		$	27,019,952
Beginning balance at original discount rates		8,134,706			8,294,768			3,215,311			3,312,104			22,956,889
Effect of changes in assumptions on future cash flows		48,534			104,910			33,457			39,725			226,626
Effect of actual variances from expected experience		(64,348)			(87,105)			(5,116)			(3,852)			(160,421)
Adjusted balance at July 1, 2022		8,118,892			8,312,573			3,243,652			3,347,977			23,023,094
Issuances(1)		176,044			160,779			24,493			7,550			368,866
Interest accrual(2)		103,380			108,681			42,392			49,097			303,550
Benefit payments(3)		(89,075)			(146,981)			(53,887)			(28,862)			(318,805)

Effect of changes in the foreign exchange rate		(35,068)			—			—			—			(35,068)
Ending balance at original discount rates		8,274,173			8,435,052			3,256,650			3,375,762			23,341,637
Effect of change from original to current discount rates		569,356			609,256			108,603			503,107			1,790,322
Balance at September 30, 2022		$	8,843,529		$	9,044,308		$	3,365,253		$	3,878,869		$	25,131,959





Balance at July 1, 2023	$	9,668,207	$	9,487,233	$	3,507,845	$	4,109,706	$	26,772,991
Beginning balance at original discount rates	8,753,526		8,592,897		3,297,781		3,448,491		24,092,695
Effect of changes in assumptions on future cash flows	13,344		34,407		6,156		11,661		65,568
Effect of actual variances from expected experience	(36,998)		(97,632)		(14,364)		(9,595)		(158,589)
Adjusted balance at July 1, 2023	8,729,872		8,529,672		3,289,573		3,450,557		23,999,674
Issuances(1)	181,822		136,612		32,046		7,145		357,625
Interest accrual(2)	114,683		115,547		43,991		51,249		325,470
Benefit payments(3)	(101,161)		(136,994)		(43,644)		(23,422)		(305,221)

Effect of changes in the foreign exchange rate	(15,256)		—		—		—		(15,256)
Ending balance at original discount rates	8,909,960		8,644,837		3,321,966		3,485,529		24,362,292
Effect of change from original to current discount rates	80,477		228,607		(46,234)		282,118		544,968
Balance at September 30, 2023	$	8,990,437	$	8,873,444	$	3,275,732	$	3,767,647	$	24,907,260

(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 Q3 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 September 30, 2022
	American Income		DTC		Liberty National		Other		Total
Net liability for future policy benefits at original discount rates	$	4,070,366	$	2,750,120	$	2,197,469	$	2,925,549	$	11,943,504
Effect of changes in discount rate assumptions	595,614		455,731		91,200		488,051		1,630,596
Net liability for future policy benefits at current discount rates	4,665,980		3,205,851		2,288,669		3,413,600		13,574,100
Other Adjustments(1)	851		5,271		(4,056)		(33,790)		(31,724)
Net liability for future policy benefits, after other adjustments, at current discount rates	$	4,666,831	$	3,211,122	$	2,284,613	$	3,379,810	$	13,542,376

(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 September 30, 2023
	American Income		DTC		Liberty National		Other		Total
Net liability for future policy benefits at original discount rates	$	4,436,001	$	2,943,544	$	2,244,035	$	3,037,498	$	12,661,078
Effect of changes in discount rate assumptions	235,731		259,725		(27,532)		283,617		751,541
Net liability for future policy benefits at current discount rates	4,671,732		3,203,269		2,216,503		3,321,115		13,412,619
Other Adjustments(1)	367		3,982		(1,389)		(32,481)		(29,521)
Net liability for future policy benefits, after other adjustments, at current discount rates	$	4,672,099	$	3,207,251	$	2,215,114	$	3,288,634	$	13,383,098

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

GL Q3 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 for the three and nine month periods ended September 30, 2023 and 2022:


	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 on future cash flows	(195,560)		(20,931)		19,846		(17,911)		(9,035)		(223,591)
Effect of actual variances from expected experience	(22,004)		(49,359)		(31,290)		11,506		(1,249)		(92,396)
Adjusted balance at January 1, 2022	2,732,287		1,618,300		402,965		172,396		86,492		5,012,440
Issuances(1)	246,877		175,456		35,831		29,970		3,582		491,716
Interest accrual(2)	91,999		45,147		14,312		5,537		3,487		160,482
Net premiums collected(3)	(192,809)		(129,001)		(38,588)		(15,822)		(7,780)		(384,000)

Effect of changes in the foreign exchange rate	—		—		—		(1,937)		—		(1,937)
Ending balance at original discount rates	2,878,354		1,709,902		414,520		190,144		85,781		5,278,701

Effect of change from original to current discount rates	(72,237)		(158,093)		3,658		(4,636)		1,672		(229,636)
Balance at September 30, 2022	$	2,806,117	$	1,551,809	$	418,178	$	185,508	$	87,453	$	5,049,065

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 on future cash flows	466,883		(30,255)		(56,964)		(6,061)		16,553		390,156
Effect of actual variances from expected experience	(6,240)		(50,052)		(30,526)		(7,643)		(1,666)		(96,127)
Adjusted balance at January 1, 2023	3,401,904		1,648,912		327,952		178,927		102,638		5,660,333
Issuances(1)	226,363		202,561		43,373		30,667		6,532		509,496
Interest accrual(2)	99,390		50,091		14,047		6,304		3,278		173,110
Net premiums collected(3)	(202,669)		(134,009)		(38,322)		(16,611)		(8,028)		(399,639)

Effect of changes in the foreign exchange rate	—		—		—		(165)		—		(165)
Ending balance at original discount rates	3,524,988		1,767,555		347,050		199,122		104,420		5,943,135

Effect of change from original to current discount rates	(183,608)		(192,981)		(8,372)		(9,976)		(1,254)		(396,191)
Balance at September 30, 2023	$	3,341,380	$	1,574,574	$	338,678	$	189,146	$	103,166	$	5,546,944

(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 Q3 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 net premiums
	United American		Family Heritage		Liberty National		American Income		DTC		Total
Balance at July 1, 2022	$	3,138,706	$	1,650,507	$	425,277	$	193,536	$	102,433	$	5,510,459
Beginning balance at original discount rates	3,022,654		1,706,794		396,741		186,298		94,752		5,407,239
Effect of changes in assumptions on future cash flows	(195,560)		(20,931)		19,846		(17,911)		(9,035)		(223,591)
Effect of actual variances from expected experience	13,731		(13,447)		(7,101)		16,766		294		10,243
Adjusted balance at July 1, 2022	2,840,825		1,672,416		409,486		185,153		86,011		5,193,891
Issuances(1)	71,806		65,523		13,220		9,545		1,260		161,354
Interest accrual(2)	30,794		15,133		4,719		1,858		1,134		53,638
Net premiums collected(3)	(65,071)		(43,170)		(12,905)		(5,282)		(2,624)		(129,052)

Effect of changes in the foreign exchange rate	—		—		—		(1,130)		—		(1,130)
Ending balance at original discount rates	2,878,354		1,709,902		414,520		190,144		85,781		5,278,701

Effect of change from original to current discount rates	(72,237)		(158,093)		3,658		(4,636)		1,672		(229,636)
Balance at September 30, 2022	$	2,806,117	$	1,551,809	$	418,178	$	185,508	$	87,453	$	5,049,065

Balance at July 1, 2023	$	2,984,554	$	1,661,020	$	409,551	$	201,844	$	89,674	$	5,346,643
Beginning balance at original discount rates	2,985,660		1,771,206		400,180		201,709		86,840		5,445,595
Effect of changes in assumptions on future cash flows	466,883		(30,255)		(56,964)		(6,061)		16,553		390,156
Effect of actual variances from expected experience	22,683		(15,658)		(2,692)		(2,394)		229		2,168
Adjusted balance at July 1, 2023	3,475,226		1,725,293		340,524		193,254		103,622		5,837,919
Issuances(1)	82,647		70,216		15,183		9,880		2,317		180,243
Interest accrual(2)	35,536		17,272		4,380		2,170		1,160		60,518
Net premiums collected(3)	(68,421)		(45,226)		(13,037)		(5,630)		(2,679)		(134,993)

Effect of changes in the foreign exchange rate	—		—		—		(552)		—		(552)
Ending balance at original discount rates	3,524,988		1,767,555		347,050		199,122		104,420		5,943,135

Effect of change from original to current discount rates	(183,608)		(192,981)		(8,372)		(9,976)		(1,254)		(396,191)
Balance at September 30, 2023	$	3,341,380	$	1,574,574	$	338,678	$	189,146	$	103,166	$	5,546,944

(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 Q3 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 on future cash flows		(194,936)			(27,211)			18,065			(21,559)			(8,270)			(233,911)
Effect of actual variances from expected experience		(24,710)			(51,720)			(32,395)			14,231			(1,425)			(96,019)
Adjusted balance at January 1, 2022		2,871,255			3,114,411			907,278			278,276			85,933			7,257,153
Issuances(1)		246,559			175,456			36,171			29,970			3,567			491,723
Interest accrual(2)		97,837			89,968			35,871			10,348			3,487			237,511
Benefit payments(3)		(198,013)			(89,359)			(71,652)			(15,360)			(9,354)			(383,738)

Effect of changes in the foreign exchange rate		—			—			—			(3,927)			—			(3,927)
Ending balance at original discount rates		3,017,638			3,290,476			907,668			299,307			83,633			7,598,722
Effect of change from original to current discount rates		(75,810)			(389,326)			26,139			5,432			1,648			(431,917)
Balance at September 30, 2022		$	2,941,828		$	2,901,150		$	933,807		$	304,739		$	85,281		$	7,166,805





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 on future cash flows	464,652		(32,428)		(60,437)		(6,407)		15,930		381,310
Effect of actual variances from expected experience	(5,530)		(53,292)		(29,581)		(8,680)		(1,925)		(99,008)
Adjusted balance at January 1, 2023	3,539,755		3,250,624		814,847		288,626		99,217		7,993,069
Issuances(1)	225,915		202,561		42,863		30,667		6,518		508,524
Interest accrual(2)	104,932		99,344		34,699		11,199		3,278		253,452
Benefit payments(3)	(221,753)		(92,973)		(73,614)		(18,633)		(9,502)		(416,475)

Effect of changes in the foreign exchange rate	—		—		—		(217)		—		(217)
Ending balance at original discount rates	3,648,849		3,459,556		818,795		311,642		99,511		8,338,353
Effect of change from original to current discount rates	(191,041)		(498,312)		(4,792)		(5,601)		(1,111)		(700,857)
Balance at September 30, 2023	$	3,457,808	$	2,961,244	$	814,003	$	306,041	$	98,400	$	7,637,496

(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 Q3 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 July 1, 2022		$	3,285,696		$	3,129,877		$	985,214		$	321,968		$	99,484		$	7,822,239
Beginning balance at original discount rates		3,160,028			3,267,244			896,137			295,571			92,143			7,711,123
Effect of changes in assumptions on future cash flows		(194,936)			(27,211)			18,065			(21,559)			(8,270)			(233,911)
Effect of actual variances from expected experience		13,347			(14,614)			(8,476)			19,916			191			10,364
Adjusted balance at July 1, 2022		2,978,439			3,225,419			905,726			293,928			84,064			7,487,576
Issuances(1)		71,731			65,524			13,379			9,547			1,257			161,438
Interest accrual(2)		32,729			30,383			11,836			3,462			1,134			79,544
Benefit payments(3)		(65,261)			(30,850)			(23,273)			(5,168)			(2,822)			(127,374)

Effect of changes in the foreign exchange rate		—			—			—			(2,462)			—			(2,462)
Ending balance at original discount rates		3,017,638			3,290,476			907,668			299,307			83,633			7,598,722
Effect of change from original to current discount rates		(75,810)			(389,326)			26,139			5,432			1,648			(431,917)
Balance at September 30, 2022		$	2,941,828		$	2,901,150		$	933,807		$	304,739		$	85,281		$	7,166,805





Balance at July 1, 2023	$	3,116,389	$	3,167,461	$	923,148	$	328,579	$	85,856	$	7,621,433
Beginning balance at original discount rates	3,116,768		3,436,167		880,879		315,087		83,188		7,832,089
Effect of changes in assumptions on future cash flows	464,652		(32,428)		(60,437)		(6,407)		15,930		381,310
Effect of actual variances from expected experience	22,410		(17,000)		(2,563)		(2,662)		(95)		90
Adjusted balance at July 1, 2023	3,603,830		3,386,739		817,879		306,018		99,023		8,213,489
Issuances(1)	82,511		70,215		14,963		9,880		2,310		179,879
Interest accrual(2)	37,340		34,024		11,173		3,810		1,160		87,507
Benefit payments(3)	(74,832)		(31,422)		(25,220)		(6,973)		(2,982)		(141,429)

Effect of changes in the foreign exchange rate	—		—		—		(1,093)		—		(1,093)
Ending balance at original discount rates	3,648,849		3,459,556		818,795		311,642		99,511		8,338,353
Effect of change from original to current discount rates	(191,041)		(498,312)		(4,792)		(5,601)		(1,111)		(700,857)
Balance at September 30, 2023	$	3,457,808	$	2,961,244	$	814,003	$	306,041	$	98,400	$	7,637,496

(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 Q3 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 September 30, 2022
	United American		Family Heritage		Liberty National		American Income		Direct to Consumer		Total
Net liability for future policy benefits at original discount rates	$	139,284	$	1,580,574	$	493,148	$	109,163	$	(2,148)	$	2,320,021
Effect of changes in discount rate assumptions	(3,573)		(231,233)		22,481		10,068		(24)		(202,281)
Net liability for future policy benefits at current discount rates	135,711		1,349,341		515,629		119,231		(2,172)		2,117,740
Other Adjustments(1)	(169)		583		3,354		56		3,232		7,056
Net liability for future policy benefits, after other adjustments, at current discount rates	$	135,542	$	1,349,924	$	518,983	$	119,287	$	1,060	$	2,124,796

(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 September 30, 2023
	United American		Family Heritage		Liberty National		American Income		Direct to Consumer		Total
Net liability for future policy benefits at original discount rates	123,861		1,692,001		471,745		112,520		(4,909)		2,395,218
Effect of changes in discount rate assumptions	(7,433)		(305,331)		3,580		4,375		143		(304,666)
Net liability for future policy benefits at current discount rates	116,428		1,386,670		475,325		116,895		(4,766)		2,090,552
Other Adjustments(1)	4,374		(4,717)		7,043		993		5,530		13,223
Net liability for future policy benefits, after other adjustments, at current discount rates	$	120,802	$	1,381,953	$	482,368	$	117,888	$	764	$	2,103,775

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

In accordance with the accounting guidance, the Company reviews, and updates as necessary, its assumptions utilized in the calculation of the liability for future benefits annually in the third quarter and recalculates the net premium ratio. The revised net premium ratio is used to update the liability for future policy benefits as of the beginning of the current reporting period, and is compared to the liability using the prior cash flow assumptions. The difference is recorded as a component of the remeasurement gain or loss for the current period, along with the effect of the difference between actual and expected experience for the period. The total remeasurement gain or loss is included in the Condensed Consolidated Statements of Operations**.

During the third quarter of the current and prior year, the Company performed its annual assumptions review and updated both its life and health assumptions of lapses, mortality, and morbidity, resulting in a net reserve remeasurement gain, due to assumption changes only, of $3.2 million for the periods ended September 30, 2023, as compared to a net reserve remeasurement loss of $36.5 million for the periods ended September 30, 2022. For the life segment, the updates to our assumptions of lapses and mortality resulted in a reserve remeasurement loss of $2.0 million and $47.2 million for the three months ended September 30, 2023 and 2022, respectively. For the health segment, the updates to our assumptions of lapses and morbidity resulted in a reserve remeasurement gain of $5.2 million and $10.7 million for the three months ended September 30, 2023 and 2022, respectively.

Excluding the impact of assumption changes, during the three months ended September 30, 2023 and 2022, the Company's results for actual variances from expected experience produced a net reserve remeasurement gain of $15.9 million and $1.0 million, respectively. During the nine months ended September 30, 2023 and 2022, the Company's results for actual variances from expected experience produced net reserve remeasurement gains of $21.6 million and $1.0 million, respectively. The variance of actual experience from expected experience during the first nine months of 2023 was primarily due to favorable variances from our assumptions as compared to actual experience in our life insurance segment (a $18.5 million gain), and favorable variances from our assumptions as compared to actual experience in our health insurance segment (a $3.1 million gain). The variance of actual

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

experience from expected experience during the nine months ended 2022 was primarily due to unfavorable variances from our assumptions of life experience as compared to actual experience in our life insurance segment (a $2.1 million loss), and favorable variances from our assumptions of health experience as compared to actual experience in our health insurance segment (a $3.1 million gain).

The following table reconciles the liability for future policy benefits to the Consolidated Balance Sheets as of September 30, 2023:



	At Original Discount Rates				At Current Discount Rates
	As of September 30,				As of September 30,
	2023		2022		2023		2022
Life(1):
American Income	$	4,435,901	$	4,070,359	$	4,672,099	$	4,666,831
Direct to Consumer	2,943,544		2,750,122		3,207,251		3,211,122
Liberty National	2,236,374		2,186,063		2,215,114		2,284,613
Other	3,010,853		2,900,148		3,288,634		3,379,810
Net liability for future policy benefits—long duration life	12,626,672		11,906,692		13,383,098		13,542,376

Health(1):
United American	126,105		137,231		120,802		135,542
Family Heritage	1,681,391		1,571,083		1,381,953		1,349,924
Liberty National	478,078		495,628		482,368		518,983
American Income	113,340		109,217		117,888		119,287
Direct to Consumer	752		1,024		764		1,060
Net liability for future policy benefits—long duration health	2,399,666		2,314,183		2,103,775		2,124,796

Deferred profit liability	173,520		176,296		173,520		176,296
Deferred annuity	813,275		991,687		813,275		991,687
Interest sensitive life	735,025		740,513		735,025		740,513
Other	9,400		9,503		9,405		9,504
Total future policy benefits	$	16,757,558	$	16,138,874	$	17,218,098	$	17,585,172

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

GL Q3 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 weighted-average original and current discount rates for the liability for future policy benefits and the additional insurance liabilities as of September 30, 2023 and 2022:


	Life
	Weighted-average Discount Rates
	As of September 30, 2023								As of September 30, 2022
	American Income		DTC		Liberty National		Other		American Income		DTC		Liberty National		Other

Original discount rate	5.7	%	6.0	%	5.6	%	6.2	%	5.8	%	6.0	%	5.6	%	6.2	%
Current discount rate	5.6	%	5.6	%	5.7	%	5.7	%	5.2	%	5.3	%	5.3	%	5.3	%


	Health
	Weighted-average Discount Rates
	As of September 30, 2023										As of September 30, 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	%	4.3	%	5.8	%	5.9	%	5.2	%
Current discount rate	5.5	%	5.7	%	5.7	%	5.6	%	5.5	%	5.1	%	5.3	%	5.3	%	5.2	%	5.1	%

The following table provides the weighted-average durations of the liability for future policy benefits and the additional insurance liabilities as of September 30, 2023 and 2022:


		As of September 30,
	2023			2022
		At original discount rates	At current discount rates		At original discount rates	At current discount rates
Life
American Income		23.08	23.29		22.91	23.37
Direct to Consumer		19.73	21.00		20.40	21.97
Liberty National		15.12	15.20		14.82	15.31
Other		16.34	17.42		16.65	18.22

Health
United American		11.40	10.34		11.39	10.65
Family Heritage		14.90	13.81		14.90	14.22
Liberty National		9.11	8.97		9.20	9.35
American Income		12.14	12.20		12.14	12.56
Direct to Consumer		11.40	10.34		11.39	10.65

GL Q3 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 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
	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
American Income	$	1,181,247	$	187,381	$	1,122,987	$	174,275
Direct to Consumer	735,374		127,040		729,950		118,995
Liberty National	256,641		89,765		240,460		88,061
Other	154,836		133,991		156,509		129,118
Total	$	2,328,098	$	538,177	$	2,249,906	$	510,449


	Life
	Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
American Income	$	399,794	$	63,565	$	377,859	$	58,970
Direct to Consumer	244,931		42,978		243,021		40,161
Liberty National	87,071		30,095		81,007		29,469
Other	51,493		45,065		51,959		43,405
Total	$	783,289	$	181,703	$	753,846	$	172,005


	Health
	Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
United American	$	298,964	$	5,345	$	283,059	$	5,665
Family Heritage	294,047		48,904		272,431		44,516
Liberty National	139,875		20,567		139,818		21,490
American Income	84,863		4,896		83,880		4,811
Direct to Consumer	10,680		—		10,710		—
Total	$	828,429	$	79,712	$	789,898	$	76,482


	Health
	Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
	Gross Premiums		Interest expense		Gross Premiums		Interest expense
United American	$	100,285	$	1,741	$	95,178	$	1,874
Family Heritage	99,828		16,632		92,133		15,145
Liberty National	46,441		6,766		45,721		7,092
American Income	28,528		1,640		27,939		1,605
Direct to Consumer	3,583		—		3,580		—
Total	$	278,665	$	26,779	$	264,551	$	25,716

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 Q3 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
	As of September 30, 2023						As of September 30, 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 gross premiums	$	23,974,963	$	13,530,015	$	13,147,003	$	22,410,479	$	12,703,160	$	12,721,890
PV of expected future net premiums	7,912,903		4,473,959		4,318,705		7,394,076		4,203,807		4,177,549
PV of expected future policy benefits	30,182,319		8,909,960		8,990,437		27,877,017		8,274,173		8,843,529

DTC
PV of expected future gross premiums	$	17,575,618	$	9,182,146	$	9,112,202	$	17,335,350	$	9,078,493	$	9,301,184
PV of expected future net premiums	10,850,664		5,701,293		5,670,175		10,780,312		5,684,932		5,838,457
PV of expected future policy benefits	25,711,499		8,644,837		8,873,444		25,253,094		8,435,052		9,044,308

Liberty National
PV of expected future gross premiums	$	4,601,176	$	2,681,034	$	2,577,877	$	4,343,332	$	2,525,305	$	2,505,580
PV of expected future net premiums	1,901,039		1,077,931		1,059,229		1,876,758		1,059,181		1,076,584
PV of expected future policy benefits	8,852,345		3,321,966		3,275,732		8,553,973		3,256,650		3,365,253

Other
PV of expected future gross premiums	$	3,753,093	$	1,901,531	$	1,953,533	$	3,832,082	$	1,932,064	$	2,055,807
PV of expected future net premiums	919,200		448,031		446,532		925,064		450,213		465,269
PV of expected future policy benefits	12,427,646		3,485,529		3,767,647		12,333,168		3,375,762		3,878,869

Total
PV of expected future gross premiums	$	49,904,850	$	27,294,726	$	26,790,615	$	47,921,243	$	26,239,022	$	26,584,461
PV of expected future net premiums	21,583,806		11,701,214		11,494,641		20,976,210		11,398,133		11,557,859
PV of expected future policy benefits	77,173,809		24,362,292		24,907,260		74,017,252		23,341,637		25,131,959

As of September 30, 2023 for the life segment using current discount rates, the Company anticipates $26.8 billion of expected future gross premiums and $11.5 billion of expected future net premiums. As of September 30, 2022 using current discount rates, the Company anticipated $26.6 billion of expected future gross premiums and $11.6 billion in expected future net 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 Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Health
	As of September 30, 2023						As of September 30, 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 gross premiums	$	8,442,713	$	5,141,771	$	4,871,878	$	6,659,804	$	4,191,787	$	4,082,931
PV of expected future net premiums	5,799,017		3,524,988		3,341,380		4,586,540		2,878,354		2,806,117
PV of expected future policy benefits	5,998,770		3,648,849		3,457,808		4,818,514		3,017,638		2,941,828

Family Heritage
PV of expected future gross premiums	$	6,637,472	$	3,932,327	$	3,523,258	$	6,221,234	$	3,732,771	$	3,413,372
PV of expected future net premiums	2,962,973		1,767,555		1,574,574		2,824,266		1,709,902		1,551,809
PV of expected future policy benefits	6,549,339		3,459,556		2,961,244		6,140,498		3,290,476		2,901,150

Liberty National
PV of expected future gross premiums	$	2,084,428	$	1,321,438	$	1,308,898	$	2,268,736	$	1,413,365	$	1,439,069
PV of expected future net premiums	515,612		347,050		338,678		654,018		414,520		418,178
PV of expected future policy benefits	1,414,512		818,795		814,003		1,606,868		907,668		933,807

American Income
PV of expected future gross premiums	$	1,755,682	$	984,122	$	969,090	$	1,738,642	$	971,620	$	987,597
PV of expected future net premiums	354,120		199,122		189,146		337,734		190,144		185,508
PV of expected future policy benefits	632,349		311,642		306,041		609,213		299,307		304,739

Direct to Consumer
PV of expected future gross premiums	$	224,522	$	141,374	$	139,748	$	173,045	$	113,484	$	115,727
PV of expected future net premiums	166,099		104,420		103,166		130,993		85,781		87,453
PV of expected future policy benefits	154,931		99,511		98,400		125,591		83,633		85,281

Total
PV of expected future gross premiums	$	19,144,817	$	11,521,032	$	10,812,872	$	17,061,461	$	10,423,027	$	10,038,696
PV of expected future net premiums	9,797,821		5,943,135		5,546,944		8,533,551		5,278,701		5,049,065
PV of expected future policy benefits	14,749,901		8,338,353		7,637,496		13,300,684		7,598,722		7,166,805

As of September 30, 2023 for the health segment using current discount rates, the Company anticipates $10.8 billion of expected future gross premiums and $5.5 billion of expected future net premiums. As of September 30, 2022 using current discount rates, the Company anticipated $10.0 billion of expected future gross premiums and $5.0 billion in expected future net 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 Q3 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 September 30, 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	—		602		—		—		1,031		—
Premiums received	17,062		10,543		100,113		18,133		18,898		8,689
Policy charges	(9,729)		—		—		(10,247)		—		—
Surrenders and withdrawals	(16,204)		(125,176)		(9,106)		(16,708)		(52,264)		(8,701)
Benefit payments	(22,753)		(48,459)		—		(25,913)		(34,684)		—

Interest credited	21,274		21,608		6,164		21,475		24,702		3,522
Other	6,270		(161)		(2,195)		8,438		479		72
Balance at September 30,	$	735,025	$	813,275	$	218,210	$	740,513	$	991,687	$	103,050


	Policyholders' Account Balances
	2023						2022
	Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds		Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds
Balance at July 1,	$	736,920	$	853,064	$	187,873	$	742,293	$	1,015,804	$	100,234
Issuances	—		231		—		—		338		—
Premiums received	5,398		2,439		31,704		5,746		4,824		4,797
Policy charges	(3,213)		—		—		(3,373)		—		—
Surrenders and withdrawals	(5,582)		(37,905)		(2,782)		(5,955)		(26,148)		(3,059)
Benefit payments	(7,258)		(11,047)		—		(7,552)		(11,232)		—

Interest credited	7,083		6,863		2,825		7,110		8,112		1,264
Other	1,677		(370)		(1,410)		2,244		(11)		(186)
Balance at September 30,	$	735,025	$	813,275	$	218,210	$	740,513	$	991,687	$	103,050


Weighted-average credit rate	3.91		%	3.34	%	5.68	%	3.89		%	3.27	%	5.07	%
Net amount at risk	$	1,793,787		N/A		N/A		$	1,899,046		N/A		N/A
Cash surrender value	673,814			813,276		218,210		690,020			991,600		103,049

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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 September 30, 2023
Range of guaranteed minimum crediting rates	Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds
At guaranteed minimum
Less than 3.00%	$	—	$	2,011	$	118,565
3.00%-3.99%	29,018		610,785		4,002
4.00%-4.99%	615,835		199,724		6,851
Greater than 5.00%	90,172		755		38,788
Total	735,025		813,275		168,206






51-150 basis points above
Less than 3.00%	—		—		—
3.00%-3.99%	—		—		—
4.00%-4.99%	—		—		50,004
Greater than 5.00%	—		—		—
Total	—		—		50,004





Grand Total	$	735,025	$	813,275	$	218,210


	At September 30, 2022
Range of guaranteed minimum crediting rates	Interest Sensitive Life		Deferred Annuity		Other Policyholders' Funds
At guaranteed minimum
Less than 3.00%	$	—	$	2,104	$	3,007
3.00%-3.99%	28,776		778,673		2,941
4.00%-4.99%	622,316		210,910		58,888
Greater than 5.00%	89,421		—		38,214
Total	$	740,513	$	991,687	$	103,050
51-150 basis points above
Less than 3.00%	$	—	$	—	$	—
3.00%-3.99%	—		—		—
4.00%-4.99%	—		—		—
Greater than 5.00%	—		—		—
Total	—		—		—






Grand Total	$	740,513	$	991,687	$	103,050

GL Q3 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 and nine month periods ended September 30, 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	341,585		140,449		66,073		10,268		558,375
Amortization expense	(104,124)		(70,478)		(33,899)		(12,594)		(221,095)
Foreign exchange adjustment	(15,003)		—		—		—		(15,003)
Experience adjustment	—		—		—		—		—
Balance at September 30, 2022	$	2,182,712	$	1,653,666	$	598,593	$	299,321	$	4,734,292






Balance at January 1, 2023	$	2,258,291	$	1,676,931	$	610,723	$	298,346	$	4,844,291
Capitalizations	351,933		123,774		78,599		9,970		564,276
Amortization expense	(118,207)		(74,496)		(38,192)		(12,390)		(243,285)
Foreign exchange adjustment	(1,297)		—		—		—		(1,297)
Experience adjustment	—		—		—		—		—
Balance at September 30, 2023	$	2,490,720	$	1,726,209	$	651,130	$	295,926	$	5,163,985


	Life
	American Income		DTC		Liberty National		Other		Total





Balance at July 1, 2022	$	2,116,771	$	1,630,734	$	586,898	$	300,272	$	4,634,675
Capitalizations	111,564		46,792		23,259		3,250		184,865
Amortization expense	(35,860)		(23,860)		(11,564)		(4,201)		(75,485)
Foreign exchange adjustment	(9,763)		—		—		—		(9,763)
Experience adjustment	—		—		—		—		—
Balance at September 30, 2022	$	2,182,712	$	1,653,666	$	598,593	$	299,321	$	4,734,292






Balance at July 1, 2023	$	2,417,480	$	1,714,715	$	636,209	$	296,861	$	5,065,265
Capitalizations	117,761		36,385		27,950		3,203		185,299
Amortization expense	(40,465)		(24,891)		(13,029)		(4,138)		(82,523)
Foreign exchange adjustment	(4,056)		—		—		—		(4,056)
Experience adjustment	—		—		—		—		—
Balance at September 30, 2023	$	2,490,720	$	1,726,209	$	651,130	$	295,926	$	5,163,985

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	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	1,628		38,500		13,357		9,408		2		62,895
Amortization expense	(4,503)		(19,048)		(9,990)		(2,567)		(134)		(36,242)
Foreign exchange adjustment	—		—		—		(755)		—		(755)
Experience adjustment	—		—		—		—		—		—
Balance at September 30, 2022	$	78,265	$	408,419	$	130,904	$	55,492	$	1,900	$	674,980
















Balance at January 1, 2023	$	77,394	$	416,608	$	133,096	$	57,811	$	1,854	$	686,763
Capitalizations	1,491		46,977		14,854		9,579		—		72,901
Amortization expense	(4,504)		(20,071)		(9,977)		(2,919)		(137)		(37,608)
Foreign exchange adjustment	—		—		—		(125)		—		(125)
Experience adjustment	—		—		—		—		—		—
Balance at September 30, 2023	$	74,381	$	443,514	$	137,973	$	64,346	$	1,717	$	721,931


	Health
	United American		Family Heritage		Liberty National		American Income		DTC		Total





Balance at July 1, 2022	$	79,174	$	401,722	$	129,592	$	53,776	$	1,945	$	666,209
Capitalizations	560		13,070		4,621		3,063		—		21,314
Amortization expense	(1,469)		(6,373)		(3,309)		(880)		(45)		(12,076)
Foreign exchange adjustment	—		—		—		(467)		—		(467)
Experience adjustment	—		—		—		—		—		—
Balance at September 30, 2022	$	78,265	$	408,419	$	130,904	$	55,492	$	1,900	$	674,980
















Balance at July 1, 2023	$	75,349	$	433,999	$	136,276	$	62,285	$	1,760	$	709,669
Capitalizations	495		16,386		5,120		3,259		—		25,260
Amortization expense	(1,463)		(6,871)		(3,423)		(1,016)		(43)		(12,816)
Foreign exchange adjustment	—		—		—		(182)		—		(182)
Experience adjustment	—		—		—		—		—		—
Balance at September 30, 2023	$	74,381	$	443,514	$	137,973	$	64,346	$	1,717	$	721,931

GL Q3 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 September 30, 2023:


		September 30,
	2023			2022
Life
American Income		$	2,490,720		$	2,182,712
Direct to Consumer		1,726,209			1,653,666
Liberty National		651,130			598,593
Other		295,926			299,321
Total DAC - Life		5,163,985			4,734,292

Health
United American		74,381			78,265
Family Heritage		443,514			408,419
Liberty National		137,973			130,904
American Income		64,346			55,492
Direct to Consumer		1,717			1,900
Total DAC - Health		721,931			674,980

Annuity		3,377			5,085
Total		$	5,889,293		$	5,414,357

GL Q3 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:


	September 30, 2023		December 31, 2022

Balance at beginning of period	$	182,202	$	171,109
Incurred related to:
Current year	523,152		676,190
Prior year	(2,383)		(15,631)
Total incurred	520,769		660,559
Paid related to:
Current year	375,687		517,856
Prior year	137,701		131,610
Total paid	513,388		649,466
Balance at end of period	$	189,583	$	182,202

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


	September 30, 2023		December 31, 2022

Policy claims and other benefits payable:
Life insurance	$	313,489	$	325,017
Health insurance	189,583		182,202
Total	$	503,072	$	507,219

GL Q3 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 September 30, 2023 and December 31, 2022.

Pension Assets by Component at September 30, 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:
Exchange traded fund(4)	$	7,424	$	—	$	—	$	7,424	1
Financial	—		—		—		—		—
Utilities	—		—		—		—		—
Energy	—		—		—		—		—
Other corporates	—		—		—		—		—
Total corporate bonds	7,424		—		—		7,424		1
Exchange traded fund(1)	290,116		—		—		290,116		57
U.S. Government and Agency	—		139,820		—		139,820		27
Other bonds	—		5		—		5		—
Guaranteed annuity contract(2)	—		43,294		—		43,294		9
Short-term investments	16,615		—		—		16,615		3
Other	511		—		—		511		—
	$	314,666	$	183,119	$	—	497,785		97
Other long-term investments(3)							13,407		3
Total pension assets							$	511,192	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)Includes non-redeemable investment funds that report the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value (NAV) per share, or its equivalent, as a practical expedient for fair value. As of September 30, 2023, the Globe Life Inc. Pension Plan owned less than 1% of two long-term investment funds.

(4)A fund including U.S. dollar-denominated investment-grade securities issued by industrial, utility, and financial companies with maturities greater than 10 years.

GL Q3 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.


	Nine Months Ended September 30,
	2023		2022
Premiums paid for insurance coverage	$	443	$	443

	September 30, 2023		December 31, 2022
Total investments:
Company owned life insurance	$	54,761	$	54,681
Exchange traded funds	78,310		71,258
	$	133,071	$	125,939

GL Q3 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 September 30, 2023 and December 31, 2022.


	September 30, 2023		December 31, 2022
Pension Plans	$	490,547	$	492,103
SERP	71,285		70,464
Pension benefit obligation	$	561,832	$	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 and nine month periods ended September 30, 2023 and 2022.

Components of Net Periodic Benefit Cost


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Service cost	$	5,392	$	8,657	$	16,174	$	25,968
Interest cost	7,834		6,124		23,502		18,368
Expected return on assets	(9,656)		(8,885)		(28,968)		(26,655)
Amortization:
Prior service cost	269		158		807		474
Actuarial (gain) loss	(48)		3,208		(152)		9,625


Net periodic benefit cost	$	3,791	$	9,262	$	11,363	$	27,780

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 September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Basic weighted average shares outstanding	94,636,867	97,258,349	95,445,416	98,244,271
Weighted average dilutive options outstanding	1,180,770	889,175	1,211,974	857,964
Diluted weighted average shares outstanding	95,817,637	98,147,524	96,657,390	99,102,235

Antidilutive shares	492,970	2,602,609	399,071	2,351,522

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

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Note 11—Debt

On May 11, 2023, Globe Life issued a $170 million term loan with an 18-month term and a variable interest rate. The proceeds from the term loan were used to retire the $166 million 7.875% Senior Notes, which matured on May 15, 2023, as well as for other corporate purposes. The following table presents information about the terms and outstanding balances of Globe Life's debt.

Selected Information about Debt Issues


				As of
				September 30, 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	05/27/1993	05/15/2023	7.875%	$	—	$	—	$	—	$	—	$	165,500
Senior notes	09/27/2018	09/15/2028	4.550%	550,000		(3,887)		546,113		521,290		545,601
Senior notes	08/21/2020	08/15/2030	2.150%	400,000		(3,442)		396,558		309,828		396,219
Senior notes(1)	05/19/2022	06/15/2032	4.800%	250,000		(4,222)		245,778		228,709		245,493


Junior subordinated debentures	11/17/2017	11/17/2057	5.275%	125,000		(1,578)		123,422		114,972		123,410
Junior subordinated debentures	06/14/2021	06/15/2061	4.250%	325,000		(7,713)		317,287		242,450		317,229
Term loan(2)	05/11/2023	11/11/2024	6.200%	170,000		(575)		169,425		169,425		—
				1,820,000		(21,417)		1,798,583		1,586,674		1,793,452
Less current maturity of long-term debt				—		—		—		—		165,500
Total long-term debt				1,820,000		(21,417)		1,798,583		1,586,674		1,627,952

Current maturity of long-term debt				—		—		—		—		165,500
FHLB borrowings				198,000		—		198,000		198,000		—
Commercial paper				251,000		(1,463)		249,537		249,537		283,603
Total short-term debt				449,000		(1,463)		447,537		447,537		449,103

Total debt				$	2,269,000	$	(22,880)	$	2,246,120	$	2,034,211	$	2,077,055

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

(2)Interest calculated quarterly using Secured Overnight Financing Rate (SOFR) plus 135 basis points.

The commercial paper has the highest priority of all unsecured debt, followed by senior notes then junior subordinated debentures. The 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.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Globe Life owns $23.9 million in FHLB common stock as of September 30, 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 September 30, 2023, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $566 million, net of outstanding funding agreements and short-term borrowings, on pledged assets with a fair value of $1.1 billion. As of September 30, 2023, $118 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 $198 million in short-term borrowings from the FHLB as of September 30, 2023, compared to $0 as of December 31, 2022, 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, cancer, critical illness, accident, and other limited-benefit supplemental hospital and surgical products. 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 September 30, 2023
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	400,214	51	$	30,535	9	$	—	—	$	430,749	39
Direct to Consumer	247,858		32	17,153		5	—		—	265,011		24
Liberty National	88,199		11	46,643		14	—		—	134,842		12
United American	1,802		—	137,077		42	—		—	138,879		12
Family Heritage	1,561		—	99,828		30	—		—	101,389		9
Other	48,465		6	—		—	—		—	48,465		4
	$	788,099	100	$	331,236	100	$	—	—	$	1,119,335	100

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

Premium Income by Distribution Channel


	Three Months Ended September 30, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	378,258	50	$	29,753	9	$	—	—	$	408,011	38
Direct to Consumer	246,021		32	17,733		6	—		—	263,754		24
Liberty National	82,273		11	45,957		14	—		—	128,230		12
United American	1,970		—	134,832		42	1		100	136,803		13
Family Heritage	1,411		—	92,131		29	—		—	93,542		9
Other	48,942		7	—		—	—		—	48,942		4
	$	758,875	100	$	320,406	100	$	1	100	$	1,079,282	100


	Nine Months Ended September 30, 2023
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	1,182,346	50	$	89,656	9	$	—	—	$	1,272,002	38
Direct to Consumer	744,132		32	51,576		5	—		—	795,708		24
Liberty National	260,036		11	140,518		14	—		—	400,554		12
United American	5,533		—	407,137		42	—		—	412,670		13
Family Heritage	4,554		—	294,029		30	—		—	298,583		9
Other	145,828		7	—		—	—		—	145,828		4
	$	2,342,429	100	$	982,916	100	$	—	—	$	3,325,345	100


	Nine Months Ended September 30, 2022
	Life			Health			Annuity			Total
Distribution Channel	Amount		% of Total	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	1,124,112	50	$	87,930	9	$	—	—	$	1,212,042	38
Direct to Consumer	739,017		33	53,509		6	—		—	792,526		25
Liberty National	244,149		11	140,563		15	—		—	384,712		12
United American	6,047		—	401,966		42	1		100	408,014		13
Family Heritage	4,143		—	272,429		28	—		—	276,572		8
Other	147,427		6	—		—	—		—	147,427		4
	$	2,264,895	100	$	956,397	100	$	1	100	$	3,221,293	100

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

The measure of profitability established by the chief operating decision makers for the insurance segments is underwriting margin before other income and administrative expenses, in accordance with the manner in which the segments are managed. It essentially represents gross profit margin on insurance products before insurance administrative expenses and consists primarily of premium less net policy benefits, acquisition expenses, and commissions. Required interest on policy liabilities is reflected as a component of the Investment segment (rather

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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 the exception of administrative settlements, all of these items are included in “Other operating expense” in the Condensed Consolidated Statements of Operations for the appropriate year. See additional detail below in the tables.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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


	Three Months Ended September 30, 2023
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	788,099	$	331,236	$	—	$	—	$	—	$	—		$	1,119,335
Net investment income	—		—		—		266,926		—		—			266,926
Other income	—		—		—		—		50		—			50
Total revenue	788,099		331,236		—		266,926		50		—			1,386,311
Expenses:
Policy benefits	515,676		193,790		6,854		2,724		—		—			719,044
Required interest on reserves	(194,199)		(26,732)		(9,353)		230,284		—		—			—

Amortization of acquisition costs	82,523		12,816		418		—		—		—			95,757
Commissions, premium taxes, and non-deferred acquisition costs	84,011		54,662		4		—		—		—			138,677
Insurance administrative expense(1)	—		—		—		—		74,585					74,585
Parent expense	—		—		—		—		2,581		1,137		(2)	3,718
Stock-based compensation expense	—		—		—		—		7,567		—			7,567
Interest expense	—		—		—		—		25,955		—			25,955
Total expenses	488,011		234,536		(2,077)		233,008		110,688		1,137			1,065,303
Subtotal	300,088		96,700		2,077		33,918		(110,638)		(1,137)			321,008
Non-operating items	—		—		—		—		—		1,137		(2)	1,137
Measure of segment profitability (pretax)	$	300,088	$	96,700	$	2,077	$	33,918	$	(110,638)	$	—		322,145

Realized gain (loss)—investments														(2,193)


Non-operating expenses														(1,137)
Income before income taxes per Condensed Consolidated Statements of Operations														$	318,815

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

(2)Non-operating expenses.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Three Months Ended September 30, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	758,875	$	320,406	$	1	$	—	$	—	$	—		$	1,079,282
Net investment income	—		—		—		246,711		—		—			246,711
Other income	—		—		—		—		399		—			399
Total revenue	758,875		320,406		1		246,711		399		—			1,326,392
Expenses:
Policy obligations	545,933		182,409		8,136		1,098		—		—			737,576
Required interest on reserves	(184,712)		(25,690)		(11,228)		221,630		—		—			—

Amortization of acquisition costs	75,486		12,076		450		—		—		—			88,012
Commissions, premium taxes, and non-deferred acquisition costs	74,284		50,479		5		—		—		—			124,768
Insurance administrative expense(1)	—		—		—		—		75,048		1,416		(2)	76,464
Parent expense	—		—		—		—		2,556					2,556
Stock-based compensation expense	—		—		—		—		9,120		—			9,120
Interest expense	—		—		—		—		23,965		—			23,965
Total expenses	510,991		219,274		(2,637)		222,728		110,689		1,416			1,062,461
Subtotal	247,884		101,132		2,638		23,983		(110,290)		(1,416)			263,931
Non-operating items	—		—		—		—		—		1,416		(2)	1,416
Measure of segment profitability (pretax)	$	247,884	$	101,132	$	2,638	$	23,983	$	(110,290)	$	—		265,347

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

Legal proceedings														(1,416)

Income before income taxes per Condensed Consolidated Statements of Operations														$	234,776

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

(2)Legal proceedings.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)

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


	Nine Months Ended September 30, 2023
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	2,342,429	$	982,916	$	—	$	—	$	—	$	—		$	3,325,345
Net investment income	—		—		—		785,275		—		—			785,275
Other income	—		—		—		—		185		—			185
Total revenue	2,342,429		982,916		—		785,275		185		—			4,110,805
Expenses:
Policy obligations	1,536,317		580,676		21,502		5,986		—		—			2,144,481
Required interest on reserves	(575,801)		(79,603)		(29,327)		684,731		—		—			—

Amortization of acquisition costs	243,285		37,608		1,266		—		—		—			282,159
Commissions, premium taxes, and non-deferred acquisition costs	251,136		163,784		13		—		—		—			414,933
Insurance administrative expense(1)	—		—		—		—		223,951		—			223,951
Parent expense	—		—		—		—		8,254		1,137		(2)	9,391
Stock-based compensation expense	—		—		—		—		22,732		—			22,732
Interest expense	—		—		—		—		76,640		—			76,640
Total expenses	1,454,937		702,465		(6,546)		690,717		331,577		1,137			3,174,287
Subtotal	887,492		280,451		6,546		94,558		(331,392)		(1,137)			936,518
Non-operating items	—		—		—		—		—		1,137		(2)	1,137
Measure of segment profitability (pretax)	$	887,492	$	280,451	$	6,546	$	94,558	$	(331,392)	$	—		937,655

Realized gain (loss)—investments														(78,963)



Non-operating expenses														(1,137)
Income before income taxes per Consolidated Statements of Operations														$	857,555

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

(2)Non-operating expenses.

GL Q3 2023 FORM 10-Q

Globe Life Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except per share data)


	Nine Months Ended September 30, 2022
	Life		Health		Annuity		Investment		Corporate & Other		Adjustments			Consolidated
Revenue:
Premium	$	2,264,895	$	956,397	$	1	$	—	$	—	$	—		$	3,221,293
Net investment income	—		—		—		736,317		—		—			736,317
Other income	—		—		—		—		862		—			862
Total revenue	2,264,895		956,397		1		736,317		862		—			3,958,472
Expenses:
Policy obligations	1,533,726		561,502		24,700		3,228		—		—			2,123,156
Required interest on reserves	(548,840)		(76,420)		(33,956)		659,216		—		—			—

Amortization of acquisition costs	221,096		36,242		1,355		—		—		—			258,693
Commissions, premium taxes, and non-deferred acquisition costs	222,310		154,160		20		—		—		—			376,490
Insurance administrative expense(1)	—		—		—		—		221,313		6,513		(2,3)	227,826
Parent expense	—		—		—		—		8,089		(368)		(3)	7,721
Stock-based compensation expense	—		—		—		—		26,603		—			26,603
Interest expense	—		—		—		—		65,737		—			65,737
Total expenses	1,428,292		675,484		(7,881)		662,444		321,742		6,145			3,086,226
Subtotal	836,603		280,913		7,882		73,873		(320,880)		(6,145)			872,246
Non-operating items	—		—		—		—		—		6,145		(2,3)	6,145
Measure of segment profitability (pretax)	$	836,603	$	280,913	$	7,882	$	73,873	$	(320,880)	$	—		878,391

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


Legal proceedings														(1,416)
Non-operating expenses														(4,729)
Income before income taxes per Consolidated Statements of Operations														$	805,401

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

(2)Legal proceedings.

(3)Non-operating expenses.

Note 13—Subsequent Events

Subsequent to the balance sheet date, the Company signed an agreement to acquire Evry Healthcare, Inc. ("Evry") for an immaterial amount in October 2023. Evry provides low-cost group and individual health insurance products through its wholly-owned subsidiary to employers and individuals by utilizing technology and data analysis to provide an improved customer service experience.

In accordance with the applicable guidance, the Company is finalizing the estimation of the fair value of the acquired assets and may do so up to one year. The impact to the Company's financial statements as a result of the transaction is expected to be immaterial.

GL Q3 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 recent 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 recent 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, 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 the impact of higher than anticipated inflation);

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

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

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

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

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

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

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

GL Q3 2023 FORM 10-Q

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