GL 10-Q Quarterly Report Sept. 30, 2023

GLOBE LIFE INC.

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gl-20230930

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ________

Commission File Number: 001-08052

GLOBE LIFE INC.

(Exact name of registrant as specified in its charter)


Delaware						63-0780404
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3700 South Stonebridge Drive , McKinney , Texas 75070

(Address of principal executive offices) (Zip Code)

( 972 ) 569-4000

(Registrant’s telephone number, including area code)

NONE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value per share	GL	New York Stock Exchange
4.250% Junior Subordinated Debentures	GL PRD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at October 31, 2023
Common Stock, $1.00 Par Value						94,118,740

GL Q3 2023 FORM 10-Q

Table of Contents

Globe Life Inc.

Table of Contents


			Page
PART I . FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statements of Comprehensive Income (Loss)	3
		Condensed Consolidated Statements of Shareholders' Equity	4
		Condensed Consolidated Statements of Cash Flows	6

		Notes to Condensed Consolidated Financial Statements	7
		Note 1—Significant Accounting Policies	7
		Note 2—New Accounting Standards	9
		Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income	13
		Note 4—Investments	15
		Note 5—Commitments and Contingencies	26
		Note 6—Policy Liabilities	27
		Note 7—Deferred Acquisition Costs	44
		Note 8 —Liability for Unpaid Claims	47
		Note 9 —Postretirement Benefits	48
		Note 10 —Earnings Per Share	50
		Note 11—Debt	51
		Note 12—Business Segments	52
		Note 13—Subsequent Events	58

		Cautionary Statements	59

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	60

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	89

	Item 4.	Controls and Procedures	89

PART I I . OTHER INFORMATION

	Item 1.	Legal Proceedings	89

	Item 1A.	Risk Factors	90

	Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	90

	Item 5.	Other Information	90

	Item 6.	Exhibits	91

Signatures			92

As used in this Form 10-Q, “Globe Life,” the “Company,” “we,” “our” and “us” refer to Globe Life Inc., a Delaware corporation incorporated in 1979, its subsidiaries and affiliates.

GL Q3 2023 FORM 10-Q

Table of Contents

PART I—FINANCIAL INFORMATION

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

Table of Contents

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) N et 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

Table of Contents

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

Table of Contents

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

Table of Contents

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

Table of Contents

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

Table of Contents

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 ratio 1 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.

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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.

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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.

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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.

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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.

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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.

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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 )

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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.

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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

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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.

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Table of Contents

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

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Table of Contents

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 .

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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.

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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.

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Table of Contents

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

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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

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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

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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

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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
Tota l	$	5,889,293	$	5,414,357

GL Q3 2023 FORM 10-Q

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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

Table of Contents

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

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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

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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

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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

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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

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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

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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.

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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.

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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.

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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.

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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.

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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.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Globe Life's Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this report. The following management discussion will only include comparison to prior year.

The results included herein reflect the adoption of ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. Globe Life Inc. implemented the standard on January 1, 2023 using the modified retrospective transition method at adoption. As a result of this election, the prior year figures have been retrospectively adjusted as of January 1, 2021 with significant impacts to Shareholders' Equity, underwriting margins, and net operating income. While the impacts of the new accounting guidance are significant, we do not consider it a fundamental change to the overall business.

Additional information on the effects of the adoption has been included in Note 2—New Accounting Standards .

"Globe Life" and the "Company" refer to Globe Life Inc. and its subsidiaries and affiliates.

Results of Operations


						How Globe Life Views Its Operations. Globe Life Inc. is the holding company for a group of insurance companies that market primarily individual life and supplemental health insurance to lower middle to middle-income households throughout the United States. We view our operations by segments, which are the insurance product lines of life, supplemental health, and annuities, and the investment segment that supports the product lines. Segments are aligned based on their common characteristics, comparability of the profit margins, and management techniques used to operate each segment.

						Insurance Product Line Segments. The insurance product line segments involve the marketing, underwriting, and administration of policies. Each product line is further segmented by the various distribution channels that market the insurance policies. Each distribution channel operates in a niche market offering insurance products designed for that particular market. Whether analyzing profitability of a segment as a whole, or the individual distribution channels within the segment, the measure of profitability used by management is the underwriting margin, as seen below:
						Premium revenue (Policy obligations) (Policy acquisition costs and commissions) Underwriting margin
						Investment Segment. The investment segment involves the management of our capital resources, including investments and the management of liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below:
						Net investment income (Required interest on policy liabilities) Excess investment income

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GLOBE LIFE INC.

Management's Discussion & Analysis

Current Highlights, comparing year-to-date 2023 with 2022.

• Net income as a return on equity (ROE) for the nine months ended September 30, 2023 was 22.6% and net operating income as an ROE, excluding accumulated other comprehensive income (1) was 14.7%.

• Total premium increased 3% over the same period in the prior year. Life premium increased 3% for the period from $2.26 billion in 2022 to $2.34 billion in 2023.

• Net investment income increased 7% over the same period in the prior year.

• Total net sales increased 5% over the same period in the prior year from $539 million in 2022 to $568 million in 2023. The average producing agent count across all of the exclusive agencies increased 11% over the prior year.

• Book value per share increased 32% over the same period in the prior year from $36.88 to $48.51. Book value per share, excluding accumulated other comprehensive income (1) , increased 11% over the prior year from $67.13 in 2022 to $74.31 in 2023.

• For the nine months ended September 30, 2023, the Company repurchased 2.7 million shares of Globe Life Inc. common stock at a total cost of $303 million for an average share price of $111.82.

The following graphs represent net income and net operating income for the nine month periods ended September 30, 2023 and 2022.

(1) As shown in the charts above, net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. It has been used consistently by Globe Life's management for many years to evaluate the operating performance of the Company. It differs from net income primarily because it excludes certain non-operating items such as realized gains and losses and certain significant and unusual items included in net income. Net income is the most directly comparable GAAP measure.

Net operating income as an ROE, excluding accumulated other comprehensive income (AOCI), is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI is $(2.5) billion and $(3.0) billion for the nine months ended September 30, 2023 and 2022, respectively.

Book value per share, excluding AOCI, is also considered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI is $(25.80) and $(30.25) for the nine months ended September 30, 2023 and 2022, respectively.

Refer to Analysis of Profitability by Segment for non-GAAP reconciliation to GAAP.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Summary of Operations. Net income increased 7% to $696 million during the nine months ended September 30, 2023, compared with $652 million in the same period in 2022. On a diluted per common share basis, net income per common share for the nine months ended September 30, 2023 increased 9% from $6.58 to $7.20.

Net operating income increased 7% to $759 million for the nine months ended September 30, 2023, compared with $710 million for the same period in 2022, primarily due to a 28% increase in excess investment income as well as a 6% increase in life underwriting margin. On a diluted per common share basis, net operating income per common share for the nine months ended September 30, 2023 increased from $7.16 to $7.85, a 10% increase. Net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized gains and losses to be a component of our core insurance operations or operating segments. Additionally, net income in 2023 and 2022 was affected by certain significant and unusual non-operating items. We do not view these items as components of core operating results because they are not indicative of past performance or future prospects of the insurance operations. We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods.

Insurance reserve liabilities are determined each reporting period based on the net level premium method. Net level premiums reflect a recomputed net premium ratio using actual experience since the issue date, and expected future experience based on future cash-flow 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 and updates those cash flow assumptions as necessary annually in the third quarter, or more frequently if suggested by experience. See Note 6—Policy Liabilities for additional information. The policy liability is accrued as premium revenue is recognized and adjusted for differences between actual and expected experience in the form of remeasurement gains and losses during the period.

The Company continues to see positive signs in its core operations, including sales and premium growth, favorable persistency, and a strong ROE, excluding accumulated other comprehensive income.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Globe Life's operations on a segment-by-segment basis are discussed in depth below. Net operating income has been used consistently by management for many years to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from GAAP net income primarily because it excludes certain non-operating items such as realized gains and losses and other significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP measure.

Analysis of Profitability by Segment

(Dollar amounts in thousands)


	Nine Months Ended September 30,
	2023		2022		Change		%
Life insurance underwriting margin	$	887,492	$	836,603	$	50,889	6
Health insurance underwriting margin	280,451		280,913		(462)		—
Annuity underwriting margin	6,546		7,882		(1,336)		(17)
Excess investment income	94,558		73,873		20,685		28
Other insurance:
Other income	185		862		(677)		(79)
Administrative expense	(223,951)		(221,313)		(2,638)		1
Corporate and other	(107,626)		(100,429)		(7,197)		7
Pre-tax total	937,655		878,391		59,264		7
Applicable taxes	(178,424)		(168,685)		(9,739)		6
Net operating income	759,231		709,706		49,525		7
Reconciling items, net of tax:
Realized gain (loss)—investments	(62,380)		(52,808)		(9,572)




Non-operating expenses	(898)		(3,736)		2,838
Legal proceedings	—		(1,119)		1,119

Net income	$	695,953	$	652,043	$	43,910	7

The results for the first nine months of 2023 are impacted, as previously noted, by the reserve development and assumption changes in the third quarter of 2023 and 2022. The life insurance segment is our primary segment and is the largest contributor to earnings in each period presented. The life insurance segment underwriting margin increased $51 million compared with the prior period, primarily a result of increased premiums, favorable policy obligations as a percent of premium, and a significantly lower remeasurement loss resulting from the assumption updates.

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GLOBE LIFE INC.

Management's Discussion & Analysis

In 2023, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was the American Income Life Division. The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the nine months ended September 30, 2023.

Total premium income rose 3% for the nine months ended September 30, 2023 to $3.3 billion. Total net sales increased 5% to $568 million, when compared with 2022. Total first-year collected premium (defined in the following section) increased 3% to $449 million for 2023 compared to $436 million in 2022.

Life insurance premium income increased 3% to $2.34 billion over the prior-year total of $2.26 billion. Life net sales rose 2% to $414 million for the first nine months of 2023. First-year collected life premium increased 1% to $313 million. Life underwriting margin, as a percent of premium, increased to 38% in 2023 from 37%. Underwriting margin increased to $887 million in 2023, compared to $837 million for the same period in 2022.

Health insurance premium income increased 3% to $983 million over the prior-year total of $956 million. Health net sales rose 15% to $154 million for the first nine months of 2023. First-year collected health premium rose 9% to $136 million. Health underwriting margin, as a percent of premium, was 29% in 2023 and 2022. Health underwriting margin decreased slightly to $280 million for the first nine months of 2023, compared to the same period in 2022.

Excess investment income, the measure of profitability of our investment segment, increased 28% during the first nine months of 2023 to $94.6 million from $73.9 million in the same period in 2022. Excess investment income per common share, reflecting the impact of our share repurchase program and increased net investment income, increased 31% to $0.98 from $0.75 when compared with the same period in 2022.

Insurance administrative expenses increased 1% in 2023 when compared with the prior-year period. These expenses were 6.7% as a percent of premium during 2023 compared to 6.9% in 2022.

For the nine months ended September 30, 2023, the Company repurchased 2.7 million Globe Life Inc. shares at a total cost of $303 million for an average share price of $111.82.

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GLOBE LIFE INC.

Management's Discussion & Analysis

The discussions of our segments are presented in the manner we view our operations, as described in Note 12—Business Segments .

We use three measures as indicators of premium growth and sales over the near term: “annualized premium in force,” “net sales,” and “first-year collected premium.”

• Annualized premium in force is defined as the premium income that would be received over the following twelve months at any given date on all active policies if those policies remain in force throughout the twelve-month period.

• Net sales are calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.

• First-year collected premium is defined as the premium collected during the reporting period for all policies in their first policy year. First-year collected premium takes lapses into account in the first year when lapses are more likely to occur, and thus is a useful indicator of how much new premium is expected to be added to premium income in the future.

See further discussion of the distribution channels below for Life and Health .

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GLOBE LIFE INC.

Management's Discussion & Analysis

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2023, life premium represented 70% of total premium and life underwriting margin represented 76% of the total underwriting margin. Additionally, investments supporting the reserves for life products produce the majority of excess investment income attributable to the investment segment.

The following table presents the summary of results of life insurance. Further discussion of the results by distribution channel is included below.

Life Insurance

Summary of Results

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Change
	2023			2022
	Amount		% of Premium	Amount		% of Premium	Amount		%
Premium and policy charges	$	2,342,429	100	$	2,264,895	100	$	77,534	3

Policy obligations	1,536,317		66	1,533,726		67	2,591		—
Required interest on reserves	(575,801)		(25)	(548,840)		(24)	(26,961)		5
Net policy obligations	960,516		41	984,886		43	(24,370)		(2)
Commissions, premium taxes, and non-deferred acquisition expenses	251,136		11	222,310		10	28,826		13
Amortization of acquisition costs	243,285		10	221,096		10	22,189		10
Total expense	1,454,937		62	1,428,292		63	26,645		2
Insurance underwriting margin	$	887,492	38	$	836,603	37	$	50,889	6

Net policy obligations amounted to 41% of premium for the nine months ended September 30, 2023 compared to 43% in the year ago period.

The following table presents Globe Life's life insurance premium by distribution channel.

Life Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Change
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
American Income	$	1,182,346	50	$	1,124,112	50	$	58,234	5
Direct to Consumer	744,132		32	739,017		32	5,115		1
Liberty National	260,036		11	244,149		11	15,887		7
Other	155,915		7	157,617		7	(1,702)		(1)
Total	$	2,342,429	100	$	2,264,895	100	$	77,534	3

Annualized life premium in force was $3.17 billion at September 30, 2023, an increase of 4% over $3.04 billion a year earlier.

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Globe Life Inc.

Management's Discussion & Analysis

An analysis of life net sales, an indicator of new business production, by distribution channel is presented below.

Life Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Change
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
American Income	$	246,335	59	$	246,919	61	$	(584)	—
Direct to Consumer	90,593		22	95,303		23	(4,710)		(5)
Liberty National	69,413		17	55,138		14	14,275		26
Other	7,513		2	7,276		2	237		3
Total	$	413,854	100	$	404,636	100	$	9,218	2

First-year collected life premium by distribution channel is presented in the table below.

Life Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Change
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
American Income	$	197,224	63	$	195,369	63	$	1,855	1
Direct to Consumer	59,735		19	67,072		22	(7,337)		(11)
Liberty National	49,810		16	42,076		13	7,734		18
Other	6,513		2	6,841		2	(328)		(5)
Total	$	313,282	100	$	311,358	100	$	1,924	1

A discussion of life operations by distribution channel follows.

The American Income Life Division markets to members of labor unions and other affinity groups and continues to diversify its lead sources, utilizing third-party internet vendor leads, and obtaining referrals to facilitate sustainable growth. This division is Globe Life's largest contributor to life premium of any distribution channel at 50% of the Company's September 30, 2023 total life premium. Net sales were $81 million for the three months ended September 30, 2023, up from $76 million in the year-ago period. For the nine months ended September 30, 2023, net sales decreased slightly to $246 million, as compared with $247 million during the same period in 2022. The comparison to prior year sales is challenging due to the strong sales growth a year ago; life sales for the first nine months of 2022 grew 14% over the same period in 2021. The underwriting margin, as a percent of premium, was 45% for the nine months ended September 30, 2023, down from 46% in the year-ago period due to higher acquisition costs.

Below is the average producing agent count for the nine months ended for the American Income Life Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year. The average producing agent count increased 9% over the year-ago period. The increase in average producing agent count was driven by an increase in new agent recruiting. Sales growth in this division, as well as within our other exclusive agencies, is generally dependent on growth in the size of the agency force.


	At September 30,		Change
	2023	2022	Amount	%
American Income	10,395	9,511	884	9

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Globe Life Inc.

Management's Discussion & Analysis

American Income Life continues to focus on growing and strengthening the agency force, specifically through emphasis on agency middle-management growth and additional agency office openings. In addition to offering financial incentives and training opportunities, the agency has made considerable investments in information technology, including a customer relationship management (CRM) tool for the agency force. This tool is designed to drive productivity in lead distribution, conservation of business, manager dashboards and new agent recruiting. Additionally, this division has invested in and successfully implemented technology that allows the agency force to engage in virtual recruiting, training, and sales activity. The agents have shifted to primarily a virtual experience with the customers and have generated a vast majority of sales through virtual presentations. We find this flexibility to be enticing for new recruits as well as a driver of sustainability for our agency force.

The Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mailings, insert media, and electronic media. In recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown faster than direct mail response, as customer preferences focused marketing activity to internet and mobile technology. The proportion of sales from the internet and inbound phone calls continue to outpace the activity from the direct mailings, but all three channels continue to work in an omnichannel approach. The different media channels support and complement one another in the division's efforts to reach the consumer. The DTC's long-term growth has been fueled by constant innovation and name recognition. We continually introduce new initiatives in this division in an attempt to increase response rates.

While the juvenile market is an important source of sales, it is also a vehicle to reach the parents and grandparents of juvenile policyholders, who are more likely to respond favorably to a DTC solicitation for life coverage on themselves in comparison to the general adult population. Also, future offerings to juvenile policyholders and their parents are sources of low acquisition-cost life insurance sales in the future.

DTC net sales declined 5% to $91 million for the nine months ended September 30, 2023 compared with $95 million for the same period in the prior year. This decline is due primarily to reductions in direct mail and mailing insert marketing activity resulting from the impact of inflation on postage and paper costs. While total sales have declined, the focus has been on improving profitability and improving the underwriting margin. DTC’s underwriting margin, as a percent of premium, was 24% for the nine months ended September 30, 2023 compared with 21% for the same period in 2022.

The Liberty National Division markets individual life insurance to middle-income household and worksite customers. Recent investments in new sales technologies as well as recent growth in middle management within the agency are expected to help continue this growth. The underwriting margin as a percent of premium was 32% for the nine months ended September 30, 2023, up from 30% during the same period a year ago. The increase is primarily attributable to increased premiums and lower policy obligations as a percent of premium, during the third quarter of 2023 as compared to same period in 2022 .

Net sales rose 26% in the nine months ended September 30, 2023 over the same period in 2022. With the division's ability to return to face-to-face customer interaction and the option of virtual sales, the Company continues to project total life net sales to increase for the remainder of 2023 as compared to the prior year.

Below is the average producing agent count for the nine months ended for the Liberty National Division.


	At September 30,		Change
	2023	2022	Amount	%
Liberty National	3,177	2,718	459	17

The Liberty National Division average producing agent count increased significantly compared with the prior-year comparable period. We continue to execute our long-term plan to grow this agency through expansion from small-town markets in the Southeast to more densely populated areas with larger pools of potential agent recruits and customers. In addition to the aforementioned geographic expansion, we have also started a campaign of market expansion to increase our agency presence in cities where we currently have offices, but not enough to properly serve the community, region, area and city. These tend to be larger geographic cities which will help create long-term sustainable agency growth. Additionally, the agency continues to help improve the ability of agents to develop

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Globe Life Inc.

Management's Discussion & Analysis

new worksite marketing business. Systems that have been put in place, including the addition of a CRM platform and enhanced analytical capabilities, help the agents develop additional worksite marketing opportunities as well as improve the productivity of agents selling in the individual life market. As the division continues to gain momentum in its sales and recruiting initiatives, as well as advances in its technology and CRM platform, the agency anticipates continued growth i n r ecruiting activity and average producing agent count.

The other distribution channels primarily include non-exclusive independent agencies selling primarily life insurance. The other distribution channels contributed $156 million of life premium income, or 7% of Globe Life's total life premium income in the nine months ended September 30, 2023, and contributed 2% of net sales for the period.

HEALTH INSURANCE

Health insurance sold by the Company primarily includes Medicare Supplement insurance, accident coverage, and other limited-benefit supplemental health products including accident, cancer, critical illness, heart, and intensive care products.

Health premium accounted for 30% of our total premium in 2023, while the health underwriting margin accounted for 24% of total underwriting margin. Health underwriting margin decreased slightly to $280 million compared to $281 million in the prior year. The Company continues to emphasize life insurance sales relative to health due to life’s superior long-term profitability and its greater contribution to excess investment income.

The following table presents underwriting margin data for health insurance.

Health Insurance

Summary of Results

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Change
	2023			2022
	Amount		% of Premium	Amount		% of Premium	Amount		%
Premium	$	982,916	100	$	956,397	100	$	26,519	3

Policy obligations	580,676		59	561,502		59	19,174		3
Required interest on reserves	(79,603)		(8)	(76,420)		(8)	(3,183)		4
Net policy obligations	501,073		51	485,082		51	15,991		3
Commissions, premium taxes, and non-deferred acquisition expenses	163,784		16	154,160		16	9,624		6
Amortization of acquisition costs	37,608		4	36,242		4	1,366		4
Total expense	702,465		71	675,484		71	26,981		4
Insurance underwriting margin	$	280,451	29	$	280,913	29	$	(462)	—

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Globe Life Inc.

Management's Discussion & Analysis

Globe Life markets supplemental health insurance products through a number of distribution channels. The following table is an analysis of our health premium by distribution channel.

Health Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Increase (Decrease)
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
United American	$	407,137	42	$	401,966	42	$	5,171	1
Family Heritage	294,029		30	272,429		28	21,600		8
Liberty National	140,518		14	140,563		15	(45)		—
American Income	89,656		9	87,930		9	1,726		2
Direct to Consumer	51,576		5	53,509		6	(1,933)		(4)
Total	$	982,916	100	$	956,397	100	$	26,519	3

Premium related to limited-benefit supplemental health products comprise $553 million, or 56%, of the total health premiums for 2023 compared with $523 million, or 55%, in the same period in the prior year. Premium from Medicare Supplement products comprises the remaining $430 million, or 44%, for 2023 compared with $433 million, or 45%, in the same period in the prior year.

Annualized health premium in force was $1.36 billion at September 30, 2023, an increase of 4% over $1.32 billion a year earlier.

Presented below is a table of health net sales by distribution channel.

Health Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Increase (Decrease)
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
United American	$	44,053	29	$	38,491	29	$	5,562	14
Family Heritage	70,865		46	60,097		45	10,768		18
Liberty National	23,806		15	20,304		15	3,502		17
American Income	13,889		9	13,634		10	255		2
Direct to Consumer	1,773		1	1,637		1	136		8
Total	$	154,386	100	$	134,163	100	$	20,223	15

Health net sales related to limited-benefit supplemental health products comprise $121 million, or 79%, of the total health net sales for 2023 compared with $100 million, or 75%, in the same period in the prior year. Medicare Supplement sales make up the remaining $33 million, or 21%, for 2023 compared with $34 million, or 25%, in the same period in the prior year.

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Globe Life Inc.

Management's Discussion & Analysis

The following table presents health insurance first-year collected premium by distribution channel.

Health Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Increase (Decrease)
	2023			2022
	Amount		% of Total	Amount		% of Total	Amount		%
United American	$	47,819	35	$	47,345	38	$	474	1
Family Heritage	53,456		39	44,617		36	8,839		20
Liberty National	18,877		14	16,870		13	2,007		12
American Income	12,857		10	13,167		11	(310)		(2)
Direct to Consumer	2,638		2	2,228		2	410		18
Total	$	135,647	100	$	124,227	100	$	11,420	9

First-year collected premium related to limited-benefit supplemental health products is $98 million, or 72%, of total first-year collected premium for 2023 compared with $80 million, or 64%, in the same period in the prior year. First-year collected premium from Medicare Supplement policies makes up the remaining $38 million, or 28%, for 2023 compared with $44 million, or 36%, in the same period in the prior year.

A discussion of health operations by distribution channel follows.

The United American Division consists of non-exclusive independent agencies who may also sell for other companies. The United American Division was Globe Life's largest health agency in terms of health premium income, with sales up 14% from the same period in the prior-year period.

This division includes three different units:

• UA General Agency, which primarily sells individual Medicare Supplement insurance through independent agents;

• Special Markets, which markets retiree health insurance to employer and union groups through brokers; and

• Globe Life Benefits, which offers group worksite supplemental health insurance through brokers.

While the increase in sales for this division was driven primarily by sales growth at Globe Life Benefits, the majority of the premium revenue comes from Medicare Supplement and Retiree Health business. Underwriting margin as a percent of premium for the division for the nine months ended September 30, 2023 and 2022 was 11%.

The Family Heritage Division primarily markets limited-benefit supplemental health insurance in non-urban areas. Most of its policies include a cash-back feature, such as a return of premium, where any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium was 34% for the nine months ended September 30, 2023 and 2022.

The division experienced a 18% increase in health net sales as compared with the nine-month period a year ago, primarily due to an increase in recruiting, as well as improved agent productivity and training. The division will continue to implement incentive programs to further these increases in the number of producing agents.

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Globe Life Inc.

Management's Discussion & Analysis

Below is the average producing agent count at the end of the period for the Family Heritage Division. The average producing agent count was up 13% compared with the same period a year ago, driven by a significant increase in recruiting during 2022 and 2023.


	At September 30,		Change
	2023	2022	Amount	%
Family Heritage Division	1,322	1,169	153	13

The Liberty National Division represented 14% of all Globe Life health premium income for the nine-month period ended September 30, 2023. The Liberty National Division markets limited-benefit supplemental health products, consisting primarily of cancer and critical illness insurance. Much of Liberty National's health business is generated through worksite marketing targeting small businesses. Health premium at Liberty National Division was $141 million for the nine months ended September 30, 2023 and 2022. Liberty National's first-year collected premium rose 12% to $19 million in the nine months ended September 30, 2023 compared with $17 million for the same period in 2022. Health net sales for the nine months ended September 30, 2023 rose 17% from the comparable period in 2022. The drivers of Liberty National's business discussed previously in the life insurance section also apply to the health business. Despite the increase in health sales from the prior year, health premiums remained level due to the run off of two older blocks of business that are no longer actively sold. For the nine months ended September 30, 2023 and 2022, underwriting margin as a percent of premium was 56% and 57%, respectively.

The Company's other distribution channels, while primarily focused on selling life insurance, also market health products. The American Income Life Division primarily markets accident plans. The Direct to Consumer Division primarily markets Medicare Supplements to employer or union-sponsored groups. On a combined basis, these other channels accounted for 14% of health premium for the nine months ended September 30, 2023 compared with 15% for the same period in 2022.

ANNUITIES

Annuities represent an insignificant part of our business. We do not currently market stand-alone fixed or deferred annuity products, favoring instead protection-oriented life and supplemental health insurance products.

INVESTMENTS

We manage our capital resources, including investments and cash flow, through the investment segment. Excess investment income represents the profit margin attributable to investment operations and is the measure that we use to evaluate the performance of the investment segment as described in Note 12—Business Segments . It is defined as net investment income less the required interest attributable to policy liabilities.

Management also views excess investment income per diluted common share as an important and useful measure to evaluate the performance of the investment segment. It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company. As excess investment income per diluted common share incorporates all invested assets and insurance liabilities, we view excess investment income per diluted common share as a useful measure to evaluate the investment segment.

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Globe Life Inc.

Management's Discussion & Analysis

Excess Investment Income . The following table summarizes Globe Life's investment income, excess investment income, and excess investment income per diluted common share.

Analysis of Excess Investment Income

(Dollar amounts in thousands, except for per share data)


	Nine Months Ended September 30,				Change
	2023		2022		Amount		%
Net investment income	$	785,275	$	736,317	$	48,958	7
Interest on policy liabilities (1)	(690,717)		(662,444)		(28,273)		4

Excess investment income	$	94,558	$	73,873	$	20,685	28

Excess investment income per diluted share	$	0.98	$	0.75	$	0.23	31

Mean invested assets (at amortized cost)	$	20,329,079	$	19,633,407	$	695,672	4
Average insurance policy liabilities	16,677,765		15,972,505		705,260		4

(1) Interest on policy liabilities is a component of total policyholder benefits, a GAAP measure. The amounts presented for 2022 have been retrospectively adjusted to exclude the interest on deferred acquisition costs due to the LDTI standard and the interest on debt.

Excess investment income increased $20.7 million, or 28%, compared with the year-ago period. Excess investment income per diluted common share was $0.98 for the nine months ended September 30, 2023, an increase of 31% over the prior-year period. Excess investment income per diluted common share generally increases at a faster pace than excess investment income because the number of diluted shares outstanding generally decreases from year to year as a result of our share repurchase program.

Net investment income for the nine months ended September 30, 2023 was $785 million or 7% greater than the year-ago period. Mean invested assets increased 4% during the first nine months of 2023 over the same period last year. The effective annual yield rate earned on the fixed maturity portfolio was 5.18% in the first nine months of 2023, compared with 5.16% a year earlier. Investment income grew in the current period due to the growth in invested assets and the increase in interest rates compared to the prior year. In addition to fixed maturities, the Company has also invested in commercial mortgage loans and limited partnerships with debt like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the investment funds for the nine months ended September 30, 2023 was 6.58%. See additional information in Note 4—Investments . For the full year 2023, we currently anticipate the average new money rate on our fixed maturity acquisitions to be approximately 80 basis points higher than the yield achieved on our 2022 acquisitions.

Globe Life's net investment income benefits from higher interest rates on new investments. While increasing interest rates have resulted in a net unrealized loss included in accumulated other comprehensive income (loss) as of September 30, 2023, we are not concerned because we do not generally intend to sell, nor is it likely that we will be required to sell, the fixed maturities prior to their anticipated recovery.

Required interest on insurance policy liabilities reduces excess investment income, as it is the amount of net investment income considered by management necessary to “fund” required interest on insurance policy liabilities. As such, it is removed from the investment segment and applied to the insurance segments to offset the effect of the required interest from the insurance segments. As discussed in Note 12—Business Segments , management regards this as a more meaningful analysis of the investment and insurance segments. Required interest is based on the original discount rate assumptions for our insurance policies in force.

The great majority of our life and health insurance policies are fixed interest rate protection policies, not investment products, and are accounted for under current GAAP accounting guidance for long-duration insurance products which mandate that interest rate assumptions for a particular block of business be “locked in” for the life of that block of business. Each calendar year, we set the original discount rate to be used to calculate the benefit reserve liability for all insurance policies issued that year. The liability reported on the balance sheet is updated in

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Globe Life Inc.

Management's Discussion & Analysis

subsequent periods using current discount rates as of the end of the relevant reporting period with a corresponding adjustment to Other Comprehensive Income. The rates are based on the methodology prescribed in ASU 2018-12. See Note 1—Significant Accounting Policies for additional information.

The discount rate used for policies issued in the current year has no impact on the in-force policies issued in prior years as the rates of all prior issue years are also locked in for purposes of recognizing income. As such, the overall original discount rate for the entire in-force block of 5.5% is a weighted average of the discount rates being used from all issue years. Changes in the overall weighted-average discount rate over time are caused by changes in the mix of the reserves on the entire block of in force business. Business issued in the current year has little impact on the overall weighted-average original discount rate due to the size of our in-force business.

In comparison to the year-ago period, required interest on insurance policy liabilities increased $28 million, or 4%, to $691 million, compared with the 4% growth in average interest-bearing insurance policy liabilities.

Realized Gains and Losses. Our life and health insurance companies collect premium income from policyholders for the eventual payment of policyholder benefits, sometimes paid many years or even decades in the future. Since benefits are expected to be paid in future periods, premium receipts in excess of current expenses are invested to provide for these obligations. For this reason, we hold a significant investment portfolio as a part of our core insurance operations. This portfolio consists primarily of high-quality fixed maturities containing an adequate yield to provide for the cost of carrying these long-term insurance product obligations. As a result, fixed maturities are generally held for long periods to support these obligations. Expected yields on these investments are taken into account when setting insurance premium rates and product profitability expectations.

Despite our intent to hold fixed maturity investments for a long period of time, investments are occasionally sold, exchanged, called, or experience a credit loss event, resulting in a realized gain or loss. Gains or losses are only secondary to our core insurance operations of providing insurance coverage to policyholders. In a bond exchange offer, bondholders may consent to exchange their existing bonds for another class of debt securities. The Company also has investments in certain limited partnerships, held under the fair value option, with fair value changes recognized in Realized gains (losses) in the Condensed Consolidated Statements of Operations .

Realized gains and losses can be significant in relation to the earnings from core insurance operations, and as a result, can have a material positive or negative impact on net income. The significant fluctuations caused by gains and losses can cause period-to-period trends of net income that are not indicative of historical core operating results or predictive of the future trends of core operations. Accordingly, they have no bearing on core insurance operations or segment results as we view operations. For these reasons, and in line with industry practice, we remove the effects of realized gains and losses when evaluating overall insurance operating results.

The following table summarizes our tax-effected realized gains (losses) by component.

Analysis of Realized Gains (Losses), Net of Tax

(Dollar amounts in thousands, except for per share data)


	Nine Months Ended September 30,
	2023				2022
	Amount		Per Share		Amount		Per Share
Fixed maturities:
Sales	$	(61,281)	$	(0.64)	$	(43,802)	$	(0.44)
Matured or other redemptions (1)	(125)		—		20,001		0.20
Provision for credit losses	(5,924)		(0.06)		306		0.01
Fair value option—change in fair value	6,284		0.06		(12,594)		(0.13)
Other (2)	(1,334)		(0.01)		(16,719)		(0.17)


Total realized gains (losses)	$	(62,380)	$	(0.65)	$	(52,808)	$	(0.53)

(1) During the nine months ended September 30, 2023 and 2022, the Company recorded $39.0 million and $24.0 million, respectively, of exchanges of fixed maturity securities (noncash transactions) that resulted in no realized gains (losses), net of tax in either period.

(2) Other realized gains (losses) are primarily a result of changes in the fair value of exchange traded funds.

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Globe Life Inc.

Management's Discussion & Analysis

During the nine months ended September 30, 2023, it was announced Signature Bank New York and First Republic Bank had entered receivership. As of September 30, 2023, the Company disposed of each of the holdings and incurred a $52 million after-tax realized loss. For the nine months ended September 30, 2022, as investment yields have increased, the Company disposed of certain fixed maturity investments to improve the risk-adjusted, capital-adjusted returns on the portfolio and enhance the yield, credit quality, or diversification of the portfolio.

Investment Acquisitions . Globe Life's investment policy calls for investing primarily in investment grade fixed maturities that meet our quality and yield objectives. We generally invest in securities with longer-term maturities because they more closely match the long-term nature of our policy liabilities. We believe this strategy is appropriate since our expected future cash flows are generally stable and predictable and the likelihood that we will need to sell invested assets to raise cash is low.

The following table summarizes selected information for fixed maturity investments. The effective annual yield shown is based on the acquisition price and call features, if any, of the securities. For non-callable bonds, the yield is calculated to maturity date. For callable bonds acquired at a premium, the yield is calculated to the earliest known call date and call price after acquisition ("first call date"). For all other callable bonds, the yield is calculated to maturity date.

Fixed Maturity Acquisitions Selected Information

(Dollar amounts in thousands)


	Nine Months Ended September 30,
	2023			2022
Cost of acquisitions:
Investment-grade corporate securities	$	547,330		$	634,213
Investment-grade municipal securities	549,528			541,670
Other investment-grade securities	—			5,491
Total fixed maturity acquisitions (1)	$	1,096,858		$	1,181,374

Effective annual yield (one year compounded) (2)	5.93		%	5.00		%
Average life (in years, to next call)	17.1			12.9
Average life (in years, to maturity)	25.4			23.1
Average rating	A+			A

(1) Fixed maturity acquisitions included unsettled trades of $20 million in 2023 and $3 million in 2022.

(2) Tax-equivalent basis, where the yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.

For investments in callable bonds, the actual life of the investment will depend on whether the issuer calls the investment prior to the maturity date. Given our investments in callable bonds, the actual average life of our investments cannot be known at the time of the investment. Absent sales and "make-whole calls", however, the average life will not be less than the average life to next call and will not exceed the average life to maturity. Data for both of these average life measures is provided in the above chart.

Acquisitions in both periods consisted primarily of corporate and municipal bonds with securities spanning a diversified range of issuers, industry sectors, and geographical regions. In the first nine months of 2023, we invested primarily in the municipal, financial, and industrial sectors. For the entire portfolio, the taxable equivalent effective yield earned was 5.18%, up approximately 2 basis points from the yield in the first nine months of 2022. Further, as previously noted in the discussion of net investment income, the increase in taxable equivalent effective yield was primarily due to new purchase yields exceeding the yield on dispositions and the average portfolio yield. For the remainder of 2023, the Company will continue to execute on its existing strategy by seeking to invest in assets that satisfy our quality and other objectives, while maximizing the highest risk-adjusted, capital-adjusted return.

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Globe Life Inc.

Management's Discussion & Analysis

Since fixed maturities represent such a significant portion of our investment portfolio, the remainder of the discussion of portfolio composition will focus on fixed maturities. See a breakdown of the Company's Other long-term investments in Note 4—Investments .

Selected information concerning the fixed maturity portfolio is as follows:

Fixed Maturity Portfolio Selected Information


	At
	September 30, 2023	December 31, 2022	September 30, 2022
Average annual effective yield (1)	5.23%	5.19%	5.18%
Average life, in years, to:
Next call (2)	14.4	14.7	14.9
Maturity (2)	18.4	18.5	18.6
Effective duration to:
Next call (2,3)	8.4	8.8	8.8
Maturity (2,3)	10.0	10.4	10.3

(1) Tax-equivalent basis. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pre-tax yield on taxable securities.

(2) Globe Life calculates the average life and duration of the fixed maturity portfolio two ways:

(a) based on the next call date which is the next call date for callable bonds and the maturity date for noncallable bonds, and

(b) based on the maturity date of all bonds, whether callable or not.

(3) Effective duration is a measure of the price sensitivity of a fixed-income security to a 1% change in interest rates.

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Management's Discussion & Analysis

Credit Risk Sensitivity . The following tables summarize certain information about the major corporate sectors and security types held in our fixed maturity portfolio at September 30, 2023 and December 31, 2022.

Fixed Maturities by Sector

September 30, 2023

(Dollar amounts in thousands)


	Below Investment Grade								Total Fixed Maturities								% of Total Fixed Maturities
	Amortized Cost, net		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost, net		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		At Amortized Cost, net	At Fair Value

Corporates:
Financial
Insurance - life, health, P&C	$	107,098	$	—	$	(17,270)	$	89,828	$	2,391,154	$	17,541	$	(289,661)	$	2,119,034	13	13
Banks	36,915		—		(5,103)		31,812		1,308,142		3,588		(145,951)		1,165,779		7	7
Other financial	74,966		—		(27,160)		47,806		1,238,816		1,251		(237,194)		1,002,873		6	7
Total financial	218,979		—		(49,533)		169,446		4,938,112		22,380		(672,806)		4,287,686		26	27
Industrial
Energy	44,670		—		(10,896)		33,774		1,426,415		13,284		(136,363)		1,303,336		7	8
Basic materials	—		—		—		—		1,161,367		3,683		(143,044)		1,022,006		6	7
Consumer, non-cyclical	—		—		—		—		2,145,682		8,586		(318,626)		1,835,642		11	11
Other industrials	25,378		59		(332)		25,105		1,148,842		9,286		(152,074)		1,006,054		6	6
Communications	—		—		—		—		857,038		3,905		(143,564)		717,379		5	4
Transportation	8,403		—		(459)		7,944		532,035		4,585		(51,884)		484,736		3	3
Consumer. cyclical	79,789		—		(16,083)		63,706		536,904		2,120		(95,424)		443,600		3	3
Technology	32,544		—		(1,419)		31,125		281,747		28		(71,425)		210,350		1	1
Total industrial	190,784		59		(29,189)		161,654		8,090,030		45,477		(1,112,404)		7,023,103		42	43
Utilities	34,701		314		(2,335)		32,680		1,998,424		13,550		(190,901)		1,821,073		11	11
Total corporates	444,464		373		(81,057)		363,780		15,026,566		81,407		(1,976,111)		13,131,862		79	81
States, municipalities, and political divisions:
General obligations	—		—		—		—		932,658		2,130		(226,047)		708,741		5	4
Revenues	—		—		—		—		2,386,863		12,029		(470,744)		1,928,148		13	12
Total states, municipalities, and political divisions	—		—		—		—		3,319,521		14,159		(696,791)		2,636,889		18	16
Other fixed maturities:
Government (U.S. and foreign)	—		—		—		—		437,467		—		(68,235)		369,232		2	2
Collateralized debt obligations	36,843		4,842		—		41,685		36,843		4,842		—		41,685		—	—
Other asset-backed securities	11,845		—		(583)		11,262		86,796		2		(6,432)		80,366		1	1
Total fixed maturities	$	493,152	$	5,215	$	(81,640)	$	416,727	$	18,907,193	$	100,410	$	(2,747,569)	$	16,260,034	100	100

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Globe Life Inc.

Management's Discussion & Analysis

Fixed Maturities by Sector

December 31, 2022

(Dollar amounts in thousands)


	Below Investment Grade								Total Fixed Maturities								% of Total Fixed Maturities
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		At Amortized Cost, net	At Fair Value

Corporates:
Financial
Insurance - life, health, P&C	$	107,355	$	22	$	(13,966)	$	93,411	$	2,375,633	$	44,578	$	(216,938)	$	2,203,273	13	13
Banks	26,944		84		(192)		26,836		1,336,868		14,035		(100,038)		1,250,865		7	8
Other financial	74,963		1		(22,026)		52,938		1,195,293		4,513		(187,513)		1,012,293		7	6
Total financial	209,262		107		(36,184)		173,185		4,907,794		63,126		(504,489)		4,466,431		27	27
Industrial
Energy	44,723		—		(10,168)		34,555		1,436,598		22,637		(101,923)		1,357,312		8	8
Basic materials	—		—		—		—		1,090,309		14,913		(95,958)		1,009,264		6	6
Consumer, non-cyclical	—		—		—		—		2,146,003		20,427		(232,196)		1,934,234		12	12
Other industrials	25,461		—		(522)		24,939		1,212,674		19,107		(121,540)		1,110,241		6	7
Communications	28,499		—		(2,253)		26,246		857,375		7,779		(110,132)		755,022		5	5
Transportation	—		—		—		—		520,029		11,684		(34,269)		497,444		3	3
Consumer. cyclical	149,465		—		(27,822)		121,643		592,657		4,903		(85,005)		512,555		3	3
Technology	—		—		—		—		247,996		90		(59,672)		188,414		1	1
Total industrial	248,148		—		(40,765)		207,383		8,103,641		101,540		(840,695)		7,364,486		44	45
Utilities	35,496		433		(3,173)		32,756		1,924,190		36,670		(125,713)		1,835,147		11	11
Total corporates	492,906		540		(80,122)		413,324		14,935,625		201,336		(1,470,897)		13,666,064		82	83
States, municipalities, and political divisions:
General obligations	—		—		—		—		915,725		5,041		(167,393)		753,373		5	5
Revenues	—		—		—		—		1,875,305		19,287		(338,054)		1,556,538		10	9
Total states, municipalities, and political divisions	—		—		—		—		2,791,030		24,328		(505,447)		2,309,911		15	14
Other fixed maturities:
Government (U.S., municipal, and foreign)	—		—		—		—		449,603		33		(51,674)		397,962		2	2
Collateralized debt obligations	37,098		13,266		—		50,364		37,098		13,266		—		50,364		—	—
Other asset-backed securities	12,493		—		(1,618)		10,875		88,336		4		(9,276)		79,064		1	1
Total fixed maturities	$	542,497	$	13,806	$	(81,740)	$	474,563	$	18,301,692	$	238,967	$	(2,037,294)	$	16,503,365	100	100

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Globe Life Inc.

Management's Discussion & Analysis

Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the fixed maturity portfolio as of September 30, 2023, representing 79% of amortized cost, net, and 81% of fair value. The remainder of the portfolio is invested primarily in securities issued by the U.S. government and U.S. municipalities. The Company holds insignificant amounts in foreign government bonds, collateralized debt obligations, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At September 30, 2023, the total fixed maturity portfolio consisted of 990 issuers.

Fixed maturities had a fair value of $16.3 billion at September 30, 2023, compared with $16.5 billion at December 31, 2022. The net unrealized loss position in the fixed-maturity portfolio increased from $1.8 billion at December 31, 2022 to $2.6 billion at September 30, 2023 due to an increase in market rates during the period.

For more information about our fixed maturity portfolio by component at September 30, 2023 and December 31, 2022, including a discussion of allowance for credit losses, an analysis of unrealized investment losses and a schedule of maturities, see Note 4—Investments .

An analysis of the fixed maturity portfolio by composite quality rating at September 30, 2023 and December 31, 2022, is shown in the following tables. The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s available ratings as assigned by Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, and Dominion Bond Rating Service, LTD. The ratings assigned by these four nationally recognized statistical rating organizations are evenly weighted when calculating the average. The composite quality rating is created utilizing a methodology developed by Globe Life using ratings from the various rating agencies noted above. The composite quality rating is not a Standard & Poor's credit rating. Standard & Poor's does not sponsor, endorse, or promote the composite quality rating and shall not be liable for any use of the composite quality rating. Included in the following chart are private placement fixed maturity holdings of $440 million at amortized cost, net of allowance for credit losses ($388 million at fair value) for which the ratings were assigned by the third-party managers.

Fixed Maturities by Rating

At September 30, 2023

(Dollar amounts in thousands)


	Amortized Cost, net		% of Total	Fair Value		% of Total	Average Composite Quality Rating on Amortized Cost, net
Investment grade:
AAA	$	945,832	5	$	796,460	5
AA	3,193,624		17	2,488,122		15
A	5,161,393		27	4,582,392		28
BBB+	3,609,077		19	3,204,032		20
BBB	4,196,940		22	3,618,741		22
BBB-	1,307,175		7	1,153,560		7
Total investment grade	18,414,041		97	15,843,307		97	A-

Below investment grade:
BB	422,315		3	342,792		2
B	30,376		—	28,586		—
Below B	40,461		—	45,349		1
Total below investment grade	493,152		3	416,727		3	BB-
	$	18,907,193	100	$	16,260,034	100

Weighted average composite quality rating							A-

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Globe Life Inc.

Management's Discussion & Analysis

Fixed Maturities by Rating

At December 31, 2022

(Dollar amounts in thousands)


	Amortized Cost, net		% of Total	Fair Value		% of Total	Average Composite Quality Rating on Amortized Cost
Investment grade:
AAA	$	828,315	5	$	733,524	4
AA	2,779,587		15	2,260,257		14
A	4,752,633		26	4,438,913		27
BBB+	3,934,053		21	3,639,118		22
BBB	4,254,730		23	3,844,182		23
BBB-	1,209,877		7	1,112,808		7
Total investment grade	17,759,195		97	16,028,802		97	A-

Below investment grade:
BB	462,356		3	389,132		3
B	43,044		—	35,067		—
Below B	37,097		—	50,364		—
Total below investment grade	542,497		3	474,563		3	BB-
	$	18,301,692	100	$	16,503,365	100

Weighted average composite quality rating							A-

The overall quality rating of the portfolio is A-, the same as of year-end 2022. Fixed maturities rated BBB are 48% of the total portfolio at September 30, 2023, down from 51% at December 31, 2022. While this ratio is high relative to our peers, it is at its lowest level in over 10 years and we have limited exposure to higher-risk assets such as derivatives, equities, and asset-backed securities. Additionally, the Company does not participate in securities lending and has no off-balance sheet investments as of September 30, 2023. Of our fixed maturity purchases, BBB securities generally provide the Company with the best risk-adjusted, capital-adjusted returns largely due to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets.

An analysis of changes in our portfolio of below-investment grade fixed maturities at amortized cost, net of allowance for credit losses is as follows:

Below-Investment Grade Fixed Maturities

(Dollar amounts in thousands)


	Nine Months Ended September 30,
	2023		2022
Balance at beginning of period	$	542,497	$	701,546
Downgrades by rating agencies	56,217		50,163
Upgrades by rating agencies	(32,540)		(97,495)
Dispositions	(68,319)		(115,108)
Provision for credit losses	(7,500)		(31)
Amortization and other	2,797		4,293
Balance at end of period	$	493,152	$	543,368

Our investment policy calls for investing primarily in fixed maturities that are investment grade and meet our quality and yield objectives. Thus, any increases in below-investment grade issues are typically a result of ratings

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Globe Life Inc.

Management's Discussion & Analysis

downgrades of existing holdings. Below-investment grade bonds at amortized cost, net of allowance for credit losses, were 7% of our shareholders’ equity excluding accumulated other comprehensive income as of September 30, 2023. Globe Life invests long term and as such, one of our key criterion in our investment process is to select issuers that have the ability to weather multiple financial cycles.

OPERATING EXPENSES

Operating expenses are included in the "Corporate and Other" segment and are classified into two categories: insurance administrative expenses and expenses of the Parent Company. Insurance administrative expenses generally include expenses incurred after a policy has been issued. As these expenses relate to premium for a given period, management measures the expenses as a percentage of premium income. The Company also views stock-based compensation expense as a Parent Company expense. Expenses associated with the issuance of our insurance policies are reflected as acquisition expenses and included in the determination of underwriting margin.

An analysis of operating expenses is shown below.

Operating Expenses Selected Information

(Dollar amounts in thousands)


	Nine Months Ended September 30,						Increase
	2023			2022			(Decrease)
	Amount		% of Premium	Amount		% of Premium	Amount		%
Insurance administrative expenses:
Salaries	$	89,068	2.7	$	94,883	2.9	$	(5,815)	(6)
Other employee costs	27,850		0.8	31,992		1.0	(4,142)		(13)
Information technology costs	47,106		1.4	40,807		1.3	6,299		15
Legal costs	10,614		0.3	9,175		0.3	1,439		16
Other administrative costs	49,313		1.5	44,456		1.4	4,857		11
Total insurance administrative expenses	223,951		6.7	221,313		6.9	2,638		1

Parent company expense	8,254			8,089			165
Stock compensation expense	22,732			26,603			(3,871)

Legal proceedings	—			1,416			(1,416)
Non-operating expenses	1,137			4,729			(3,592)

Total operating expenses, per Condensed Consolidated Statements of Operations	$	256,074		$	262,150		$	(6,076)	(2)

Total operating expenses for September 30, 2023 decreased in comparison with the prior year primarily due to decreases in stock compensation expense and other non-operating costs. Insurance administrative expenses increased $2.6 million primarily due to higher information technology costs, information security costs, and other administrative costs offset by a decline in pension-related employee benefit costs. Insurance administrative expenses as a percent of premium were 6.7% for the nine months ended September 30, 2023 compared to 6.9% for the same period in 2022.

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Globe Life Inc.

Management's Discussion & Analysis

SHARE REPURCHASES

Globe Life has an ongoing share repurchase program that began in 1986, and is reviewed with the Board of Directors by management quarterly and reaffirmed by the Board of Directors annually. With no specified authorization amount, management determines the amount of repurchases based on the amount of the excess cash flows after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses. Since implementing our share repurchase program in 1986, we have used $9.3 billion of excess cash flow at the Parent Company to repurchase Globe Life Inc. common shares after determining that the repurchases provide a greater risk-adjusted after-tax return than other investment alternatives.

Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance subsidiaries less interest expense paid on its debt and other limited operating activities. The majority of our share repurchases are made from excess cash flow after the payment of shareholder dividends. Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises. On August 10, 2023, the Board of Directors reauthorized the Parent Company’s share repurchase program in amounts and with timing that management, in consultation with the Board, determines to be in the best interest of the Company and its shareholders.

The following chart summarizes share repurchases for the nine month periods ended September 30, 2023 and 2022.

Analysis of Share Repurchases

(Amounts in thousands, except per share data)


	Nine Months Ended September 30,
	2023					2022
	Shares	Amount		Average Price		Shares	Amount		Average Price
Purchases with:
Excess cash flow at the Parent Company (1)	2,708	$	302,849	$	111.82	2,832	$	278,822	$	98.46
Option exercise proceeds	526	60,216		114.58		555	56,630		102.04
Total	3,234	$	363,065	$	112.27	3,387	$	335,452	$	99.04

(1) Excludes excise tax on the repurchase of treasury stock of $2.9 million for the nine months ended September 30, 2023.

Throughout the remainder of this discussion, share repurchases will only refer to those made from excess cash flow at the Parent Company.

FINANCIAL CONDITION

Liquidity. Liquidity provides Globe Life with the ability to meet on demand the cash commitments required to support our business operations and meet our financial obligations. Our liquidity is primarily derived from multiple sources: positive cash flow from operations, a portfolio of marketable securities, a revolving credit facility, commercial paper, and the Federal Home Loan Bank.

Insurance Subsidiary Liquidity . The operations of our insurance subsidiaries have historically generated substantial cash inflows in excess of immediate cash needs. Cash inflows for the insurance subsidiaries primarily include premium and investment income. In addition to investment income, maturities and scheduled repayments in the investment portfolio are cash inflows. Cash outflows from operations include policy benefit payments, commissions, administrative expenses, and taxes. A portion of the excess cash inflows in the current year will provide for the payment of future policy benefits and are invested primarily in long-term fixed maturities as they better match the long-term nature of these obligations. Excess cash available from the insurance subsidiaries’ operations is generally distributed as a dividend to the Parent Company, subject to regulatory restrictions. The dividends are generally paid in amounts equal to the subsidiaries’ prior year statutory net income excluding realized capital gains. While the leading source of the excess cash is investment income, a significant portion of the excess cash also comes from underwriting income due to our high underwriting margins and effective expense control.

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Globe Life Inc.

Management's Discussion & Analysis

While the insurance subsidiaries annually generate more operating cash inflows than cash outflows, the companies also have the entire available-for-sale fixed maturity investment portfolio available to create additional cash flows if required.

Four of our insurance subsidiaries are members of the FHLB of Dallas. FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements. While not the only source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 11—Debt for further details.

Parent Company Liquidity. An important source of Parent Company liquidity is the dividends from its insurance subsidiaries. These dividends are received throughout the year and are used by the Parent Company to pay dividends on common and preferred stock, interest and principal repayment requirements on Parent Company debt, and operating expenses of the Parent Company.


	Nine Months Ended September 30,				Twelve Months Ended December 31,
	2023		2022		Projected 2023	2022
Liquidity Sources:
Dividends from Subsidiaries	$	411,661	$	353,109	$460,000—470,000	$	407,042
Excess Cash Flows (1)	387,879		329,478		420,000—430,000	358,981

(1) Excess cash flows are reported gross of shareholder dividends. For the nine months ended September 30, 2023 and 2022, shareholder dividends were $63 million and $60 million, respectively. For the twelve months ended December 31, 2023, we project approximately $84 million in shareholder dividends, compared to the $81 million paid in 2022.

Dividends from subsidiaries and excess cash flows are projected to be higher in 2023 than in 2022 primarily due to lower life obligations and the growth in our underwriting margins, both of which resulted in higher statutory earnings generated by the affiliates. Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, public debt markets, term loans, and a revolving credit facility. At September 30, 2023, the Parent Company had access to $69 million of invested cash, net intercompany receivables, and other liquid assets.

Short-Term Borrowings. An additional source of Parent Company liquidity is a credit facility with a group of lenders allowing for unsecured borrowings and stand-by letters of credit up to $750 million, which could be extended up to $1 billion. While the Parent Company may request the extension, it is not guaranteed. Up to $250 million in letters of credit can be issued against the facility. The facility serves as a back-up line of credit for a commercial paper program under which commercial paper may be issued at any time, with total commercial paper outstanding not to exceed the facility maximum, less any letters of credit issued. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature. The credit agreement will mature on September 30, 2026. As of September 30, 2023, the Parent Company was in full compliance with all covenants related to the aforementioned debt.

As a part of the credit facility, Globe Life has stand-by letters of credits. These letters of credit are issued on behalf of our insurance subsidiaries.

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Globe Life Inc.

Management's Discussion & Analysis

The following tables present certain information about our commercial paper borrowings.

Credit Facility—Commercial Paper

(Dollar amounts in thousands)


	At
	September 30, 2023			December 31, 2022			September 30, 2022
Balance of commercial paper at end of period (par value)	$	251,000		$	285,000		$	270,000
Annualized interest rate	5.65		%	4.78		%	3.13		%
Letters of credit outstanding	$	115,000		$	125,000		$	125,000
Remaining amount available under credit line	384,000			340,000			355,000

Credit Facility—Commercial Paper Activity

(Dollar amounts in thousands)


	Nine Months Ended September 30,
	2023			2022
Average balance of commercial paper outstanding during period (par value)	$	296,816		$	322,788
Daily-weighted average interest rate (annualized)	5.33		%	1.15		%
Maximum daily amount outstanding during period (par value)	$	477,700		$	500,529

The Company reduced the commercial paper borrowings by $34 million since year-end. We had no difficulties in accessing the commercial paper market under this facility during the nine months ended September 30, 2023 and 2022.

Globe Life expects to have readily available funds for 2023 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries through liquid assets currently available, internally-generated cash flow and the credit facility. In the unlikely event that more liquidity is needed, the Parent Company could generate additional funds through multiple sources including, but not limited to, the issuance of debt, an additional short-term credit facility or term loan, and intercompany borrowing.

Consolidated Liquidity. Consolidated net cash inflows from operations were $1.09 billion in the first nine months of 2023, compared with $1.05 billion in the same period of 2022. The increase is primarily attributable to fluctuations in the settlement of certain amounts included in other liabilities. In addition to cash inflows from operations, our insurance companies received proceeds from dispositions of fixed maturities available for sale and other long-term investments in the amount of $538 million during the first nine months of 2023. As previously noted under the caption Credit Facility , the Parent Company has in place a revolving credit facility. The insurance companies have no additional outstanding credit facilities.

Cash and short-term investments were $169 million at September 30, 2023, compared with $207 million at December 31, 2022. In addition to these liquid assets, $16 billion of fixed income securities are available for sale in the event of an unexpected need. Approximately $767 million, at fair value, are pledged for outstanding FHLB advances and reinsurance. Further, approximately 97% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. While our fixed income securities are classified as available for sale, we have the ability and general intent to hold any securities to recovery or maturity. Our strong cash flows from operations, on-going investment maturities, and available liquidity under our credit facility make any need to sell securities for liquidity highly unlikely.

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Globe Life Inc.

Management's Discussion & Analysis

Capital Resources. The Parent Company's capital structure consists of short-term debt (the commercial paper facility and current maturities of long-term debt) , long-term debt, and shareholders’ equity.

Long-Term Borrowings . The outstanding long-term debt at book value was $1.8 billion at September 30, 2023 and $1.6 billion at December 31, 2022.

Selected Information about Debt Issues

As of September 30, 2023

(Dollar amounts in thousands)


Instrument	Issue Date	Maturity Date	Coupon Rate	Interest Payment Dates	Par Value		Book Value		Fair Value
Senior notes	09/27/2018	09/15/2028	4.550%	semiannual	$	550,000	$	546,113	$	521,290
Senior notes	08/21/2020	08/15/2030	2.150%	semiannual	400,000		396,558		309,828
Senior notes (1)	05/19/2022	06/15/2032	4.800%	semiannual	250,000		245,778		228,709

Junior subordinated debentures	11/17/2017	11/17/2057	5.275%	semiannual	125,000		123,422		114,972
Junior subordinated debentures	06/14/2021	06/15/2061	4.250%	quarterly	325,000		317,287		242,450
Term loan (2)	05/11/2023	11/11/2024	6.200%	quarterly	170,000		169,425		169,425


Total long-term debt					1,820,000		1,798,583		1,586,674


FHLB borrowings					198,000		198,000		198,000
Commercial paper					251,000		249,537		249,537
Total short-term debt					449,000		447,537		447,537

Total debt					$	2,269,000	$	2,246,120	$	2,034,211

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

(2) Interest calculated quarterly using SOFR plus 135 basis points.

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 7.875% Senior Notes which matured on May 15, 2023. Refer to Note 11—Debt for a complete analysis and description of long-term debt issues outstanding.

Financing costs for the corporate and other segment consist primarily of interest on our various debt instruments. The table below presents the components of financing costs and reconciles interest expense per the Condensed Consolidated Statements of Operations .

Analysis of Financing Costs

(Dollar amounts in thousands)


	Nine Months Ended September 30,				Increase (Decrease)
	2023		2022		Amount		%
Interest on funded debt	$	55,732	$	60,235	$	(4,503)	(7)
Interest on term loans	4,605		—		4,605		—
Interest on short-term debt	16,284		5,463		10,821		198
Other	19		39		(20)		(51)
Financing costs	$	76,640	$	65,737	$	10,903	17

During the first nine months of 2023, financing costs increased 17% compared with the prior year. The increase in financing costs is primarily due to higher short-term interest rates. More information on our debt transactions is disclosed in the Financial Condition section of this report.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Subsidiary Capital : The National Association of Insurance Commissioners (NAIC) has established a risk-based factor approach for determining threshold risk-based capital levels for all insurance companies. This approach was designed to assist the regulatory bodies in identifying companies that may require regulatory attention. A Risk-Based Capital (RBC) ratio is typically determined by dividing adjusted total statutory capital by the amount of risk-based capital determined using the NAIC’s factors. If a company’s RBC ratio approaches two times the RBC amount, the company must file a plan with the NAIC for improving its capital levels (this level is commonly referred to as “Company Action Level” RBC). Companies typically hold a multiple of the Company Action Level RBC depending on their particular business needs and risk profile.

Our goal is to maintain statutory capital within our insurance subsidiaries at levels necessary to support our current ratings. For 2023, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%. The Company has concluded that this capital level is more than adequate and sufficient to support its current ratings, given the nature of its business and its risk profile. For 2022, our consolidated Company Action Level RBC ratio was 321%. The Parent Company is committed to maintaining the targeted consolidated RBC ratio at its insurance subsidiaries and has sufficient liquidity available to provide additional capital if necessary.

Shareholders' Equity : In 2023, new guidance became effective that impacted the accounting for our long duration contracts with significant effects to shareholders' equity. Please see Note 2—New Accounting Standards for additional information.

Shareholders’ equity was $4.6 billion at September 30, 2023. This compares with $3.9 billion at December 31, 2022 and $3.6 billion at September 30, 2022, as adjusted. During the nine months since December 31, 2022, shareholders’ equity increased as a result of net income of $696 million during the first nine months of 2023, but was offset by share repurchases of $303 million and an additional $60 million in share repurchases to offset the dilution from stock option exercises. Additionally, the balance of AOCI declined $331 million primarily due to increased interest rates and discount rates over the period.

On September 12, 2023, the Parent Company announced that it had declared a quarterly dividend of $0.2250 per share. This dividend was paid on November 1, 2023.

We plan to use excess cash available at the Parent Company as efficiently as possible in the future. Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, shareholder dividend payments, investments in securities, or repayment of short-term debt. We will determine the best use of excess cash after ensuring that targeted capital levels are maintained in our insurance subsidiaries. If market conditions are favorable, we currently expect that share repurchases will continue to be a primary use of those funds.

As previously noted, the liability for future policy benefits under ASU 2018-12 is required to be computed using current discount rates with the impact of changes in discount rates included in accumulated other comprehensive income. Additionally, the guidance requires the liability for future policy benefits to be calculated using net premiums rather than gross premiums. Given that gross premiums are considerably higher than net premiums for our business, as seen in Note 6—Policy Liabilities , the measurement of the liability is higher than what it would be had it been computed using gross premiums. This is an important consideration when analyzing shareholders' equity.

Globe Life is required under GAAP to revalue its available for sale fixed maturity portfolio to fair market value at the end of each accounting period. These changes, net of their associated impact on income tax, are reflected directly in shareholders’ equity. Fluctuations in interest rates cause undue volatility in the period-to-period presentation of our shareholders’ equity, capital structure, and financial ratios. Due to the long-term nature of our fixed maturity investments and policy liabilities and the strong cash flows consistently generated by our insurance subsidiaries, we have the ability to hold our securities to maturity. As such, we do not expect to incur losses due to fluctuations in market value of fixed maturities caused by market rate changes and temporarily illiquid markets. Accordingly, our management, credit rating agencies, lenders, many industry analysts, and certain other financial statement users prefer to remove the effect of this accounting rule when analyzing our balance sheet, capital structure, and financial ratios.

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GLOBE LIFE INC.

Management's Discussion & Analysis

CRITICAL ACCOUNTING POLICIES

The following critical 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). Additional information on our accounting policies is disclosed in Note 1—Significant Accounting Policies .

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 to 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 ratio 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.

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

The liability for future policy benefits is discounted using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. The discount rate assumption is updated each reporting period with the effect of the changes in the liability included in Other Comprehensive Income (OCI). 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 discount rate assumption is key in determining the change in the value of the liability for future benefits for long duration life and health contracts. Since 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, it is subject to interest rate risk. A decrease in discount rates will cause an increase in the obligation, and changes in assumptions may cause significant differences in results.

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GLOBE LIFE INC.

Management's Discussion & Analysis

The following table illustrates the interest rate sensitivity of our liability for future policy benefits as of September 30, 2023 and 2022. This table measures the effect of a parallel shift in discount rates on the liability. The data measures the change in reported value arising from an immediate change in rates in increments of 50 and 100 basis points, which would be recorded as a component of OCI.

Value of Liability for Future Policy Benefits

(Dollar amounts in thousands)


	At September 30,
Change in Discount Rates (1)	2023		2022
(200)	$	25,040,320	$	25,687,257
(100)	20,510,540		20,998,753
(50)	18,739,489		19,162,906
0	17,218,098		17,585,172
50	15,902,308		16,220,542
100	14,757,077		15,033,077
200	12,871,415		13,079,552

(1) In basis points.

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 will be reviewed at least annually and revised in conjunction with any change in the future policy benefit assumptions. The effect of changes in the assumptions will be recognized over the remaining expected contract term as a revision of future amortization amounts.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no quantitative or qualitative changes with respect to market risk exposure during the nine months ended September 30, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures : Globe Life Inc., under the direction of the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, has established disclosure controls and procedures that are designed to ensure that information required to be disclosed by Globe Life in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to Globe Life's management, including the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As of the end of the fiscal period completed September 30, 2023, an evaluation was performed under the supervision and with the participation of Globe Life management, including the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, of the disclosure controls and procedures (as those terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon their evaluation, the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer have concluded that disclosure controls and procedures are effective as of the date of this Form 10-Q. In compliance with Section 302 of the Sarbanes Oxley Act of 2002 (18 U.S.C. § 1350), each of these officers executed a Certification included as an exhibit to this Form 10-Q.

Changes in Internal Control over Financial Reporting : During the period ended September 30, 2023 there have not been any changes to Globe Life Inc.'s internal control over financial reporting, or in other factors that could significantly affect the internal control over financial reporting subsequent to the date of their evaluation, which have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Part II—Other Information

Item 1. Legal Proceedings

Discussion regarding litigation and unclaimed property audits is provided in Note 5—Commitments and Contingencies .

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Item 1A. Risk Factors

The Company had no material changes to its risk factors.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Purchases of Certain Equity Securities by the Issuer and Others for the Third Quarter of 2023


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares (or Approximate Dollar Amount) that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2023	198,437	$	111.40	198,437
August 1-31, 2023	441,144	112.60		441,144
September 1-30, 2023	220,600	109.82		220,600

On August 10, 2023, the Globe Life Board of Directors reaffirmed its continued authorization of the Company's stock repurchase program in amounts and with timing that management, in consultation with the Board, determined to be in the best interest of the Company. The program has no defined expiration date or maximum shares to be repurchased.

Item 5. Other Information

None

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Item 6. Exhibits


Exhibit No.						Description
3.1						Amended and Restated By-laws of Globe Life Inc., as amended Aug ust 10, 2023
31.1						Rule 13a-14(a)/15d-14(a) Certification by J. Matthew Darden
31.2						Rule 13a-14(a)/15d-14(a) Certification by Frank M. Svoboda
31.3						Rule 13a-14(a)/15d-14(a) Certification by Thomas P. Kalmbach
32.1						Section 1350 Certification by J. Matthew Darden, Frank M. Svoboda, and Thomas P. Kalmbach
101.INS						XBRL Instance Document- the instance document does not appear in the Interactive Data file because the XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
104						Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


									GLOBE LIFE INC.

Date: November 6, 2023									/s/ J. Matthew Darden
									J. Matthew Darden
									Co-Chairman and Chief Executive Officer

Date: November 6, 2023									/s/ Frank M. Svoboda
									Frank M. Svoboda
									Co-Chairman and Chief Executive Officer

Date: November 6, 2023									/s/ Thomas P. Kalmbach
									Thomas P. Kalmbach
									Executive Vice President and Chief Financial Officer

GL Q3 2023 FORM 10-Q

TABLE OF CONTENTS

Part I Financial Information Item 1. Condensed Consolidated Financial Statements Note 1 Significant Accounting Policies Note 2 New Accounting Standards Note 3 Supplemental Information About Changes To Accumulated Other Comprehensive Income Note 4 Investments Note 5 Commitments and Contingencies Note 6 Policy Liabilities Note 7 Deferred Acquisition Costs Note 8 Liability For Unpaid Claims Note 9 Postretirement Benefits Note 10 Earnings Per Share Note 11 Debt Note 12 Business Segments Note 13 Subsequent Events Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities, Use Of Proceeds, and Issuer Purchases Of Equity Securities Item 5. Other Information Item 6. Exhibits

Exhibits

3.1 Amended and Restated By-laws of Globe Life Inc., as amended August 10,2023 31.1 Rule 13a-14(a)/15d-14(a) Certification by J. Matthew Darden 31.2 Rule 13a-14(a)/15d-14(a) Certification by Frank M. Svoboda 31.3 Rule 13a-14(a)/15d-14(a) Certification by Thomas P. Kalmbach 32.1 Section 1350 Certification by J. Matthew Darden, Frank M. Svoboda, and Thomas P. Kalmbach

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Eli Lilly and Company	LLY

GL 10-Q Quarter ended Sept. 30, 2023

Exhibits