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GLOBE LIFE INC. - Quarter Report: 2022 September (Form 10-Q)

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, 2022
or
☐ 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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par value per shareGLNew York Stock Exchange
4.250% Junior Subordinated DebenturesGL PRDNew 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, 2022
Common Stock, $1.00 Par Value 97,270,229
Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Table of Contents
Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 6.








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.
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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,
2022		December 31, 2021
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2022—$18,173,471;
2021—$17,805,309, allowance for credit losses: 2022— $0; 2021— $387)
$16,005,140 $21,305,287 
Policy loans605,426 589,634 
Other long-term investments (includes: 2022—$748,219; 2021—$640,263 under the fair value option)
907,390 793,925 
Short-term investments85,773 69,145 
Total investments17,603,729 22,757,991 
Cash85,586 92,163 
Accrued investment income269,212 251,307 
Other receivables475,363 487,443 
Deferred acquisition costs5,162,172 4,914,728 
Goodwill481,791 481,791 
Other assets760,935 782,625 
Total assets$24,838,788 $29,768,048 
Liabilities:
Future policy benefits$16,556,827 $16,034,727 
Unearned and advance premium64,223 65,472 
Policy claims and other benefits payable417,739 412,940 
Other policyholders' funds103,161 98,935 
Total policy liabilities17,141,950 16,612,074 
Current and deferred income taxes568,282 1,765,021 
Short-term debt434,737 479,644 
Long-term debt (estimated fair value: 2022—$1,445,523; 2021—$1,667,009)
1,627,547 1,546,494 
Other liabilities704,674 722,009 
Total liabilities20,477,190 21,125,242 
Commitments and Contingencies (Note 5)
Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2022 and 2021
— — 
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2022—109,218,183 issued; 2021—109,218,183 issued)
109,218 109,218 
Additional paid-in-capital540,636 520,564 
Accumulated other comprehensive income (loss)(1,811,549)2,677,583 
Retained earnings6,633,369 6,182,100 
Treasury stock, at cost: (2022—12,225,433 shares; 2021—9,650,845 shares)
(1,110,076)(846,659)
Total shareholders' equity4,361,598 8,642,806 
Total liabilities and shareholders' equity$24,838,788 $29,768,048 

See accompanying Notes to Condensed Consolidated Financial Statements.
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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,
2022202120222021
Revenue:
Life premium$755,115 $728,924 $2,269,641 $2,165,213 
Health premium319,289 299,143 955,478 888,902 
Other premium1 — 1 1 
Total premium1,074,405 1,028,067 3,225,120 3,054,116 
Net investment income245,625 238,975 733,101 713,103 
Realized gains (losses)(29,155)10,475 (66,845)47,286 
Other income398 321 861 1,004 
Total revenue1,291,273 1,277,838 3,892,237 3,815,509 
Benefits and expenses:
Life policyholder benefits494,627 516,196 1,555,004 1,532,298 
Health policyholder benefits198,415 187,906 592,488 564,589 
Other policyholder benefits6,986 7,303 21,110 21,848 
Total policyholder benefits700,028 711,405 2,168,602 2,118,735 
Amortization of deferred acquisition costs156,129 151,593 469,718 452,607 
Commissions, premium taxes, and non-deferred acquisition costs93,028 82,774 277,436 244,752 
Other operating expense88,140 80,385 262,150 240,750 
Interest expense23,965 20,886 65,737 63,833 
Total benefits and expenses1,061,290 1,047,043 3,243,643 3,120,677 
Income before income taxes229,983 230,795 648,594 694,832 
Income tax benefit (expense)(43,204)(41,924)(120,450)(127,826)
Net income
$186,779 $188,871 $528,144 $567,006 
Basic net income per common share
$1.92 $1.86 $5.38 $5.53 
Diluted net income per common share
$1.90 $1.84 $5.33 $5.46 












See accompanying Notes to Condensed Consolidated Financial Statements.
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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,
2022202120222021
Net income
$186,779 $188,871 $528,144 $567,006 
Other comprehensive income (loss):
Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period(1,368,910)(95,906)(5,704,042)(453,917)
Other reclassification adjustments included in net income12,142 (14,599)30,371 (31,096)
Foreign exchange adjustment on fixed maturities recorded at fair value2,856 (519)4,975 4,141 
Total unrealized investment gains (losses)(1,353,912)(111,024)(5,668,696)(480,872)
Less applicable tax (expense) benefit284,319 23,317 1,190,428 100,984 
Unrealized gains (losses) on investments, net of tax(1,069,593)(87,707)(4,478,268)(379,888)
Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costs4,699 432 11,154 1,199 
Less applicable tax (expense) benefit(988)(91)(2,343)(252)
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax3,711 341 8,811 947 
Foreign exchange translation:
Foreign exchange translation adjustments, other than securities(21,379)(6,839)(35,220)(1,276)
Less applicable tax (expense) benefit4,488 1,437 7,395 269 
Foreign exchange translation adjustments, other than securities, net of tax(16,891)(5,402)(27,825)(1,007)
Pension:
Pension adjustments3,438 5,198 10,316 15,598 
Less applicable tax (expense) benefit(721)(1,090)(2,166)(3,275)
Pension adjustments, net of tax2,717 4,108 8,150 12,323 
Other comprehensive income (loss)(1,080,056)(88,660)(4,489,132)(367,625)
Comprehensive income (loss)
$(893,277)$100,211 $(3,960,988)$199,381 








See accompanying Notes to Condensed Consolidated Financial Statements.
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Globe Life Inc.
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
(Dollar amounts in thousands, except per share data)


Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Shareholders' Equity
Balance at December 31, 2021
$— $109,218 $520,564 $2,677,583 $6,182,100 $(846,659)$8,642,806 
Comprehensive income (loss)— — — (1,808,088)164,361 — (1,643,727)
Common dividends declared
($0.2075 per share)
— — — — (20,543)— (20,543)
Acquisition of treasury stock— — — — — (119,482)(119,482)
Stock-based compensation— — 2,504 — (345)6,876 9,035 
Exercise of stock options— — — — (9,964)35,895 25,931 
Balance at March 31, 2022
— 109,218 523,068 869,495 6,315,609 (923,370)6,894,020 
Comprehensive income (loss)— — — (1,600,988)177,004 — (1,423,984)
Common dividends declared
($0.2075 per share)
— — — — (20,238)— (20,238)
Acquisition of treasury stock— — — — — (143,939)(143,939)
Stock-based compensation— — 8,448 — — — 8,448 
Exercise of stock options— — — — (2,419)11,222 8,803 
Balance at June 30, 2022
— 109,218 531,516 (731,493)6,469,956 (1,056,087)5,323,110 
Comprehensive income (loss)— — — (1,080,056)186,779 — (893,277)
Common dividends declared
($0.2075 per share)
— — — — (20,126)— (20,126)
Acquisition of treasury stock— — — — — (72,031)(72,031)
Stock-based compensation— — 9,120 — — — 9,120 
Exercise of stock options— — — — (3,240)18,042 14,802 
Balance at September 30, 2022$— $109,218 $540,636 $(1,811,549)$6,633,369 $(1,110,076)$4,361,598 




















See accompanying Notes to Condensed Consolidated Financial Statements.
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Globe Life Inc.
Condensed Consolidated Statements of Shareholders' Equity (Continued)
(Unaudited)
(Dollar amounts in thousands, except per share data)


Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Shareholders' Equity
Balance at December 31, 2020
$— $113,218 $527,435 $3,029,244 $5,874,109 $(772,914)$8,771,092 
Comprehensive income (loss)— — — (1,004,729)178,517 — (826,212)
Common dividends declared
($0.1975 per share)
— — — — (20,435)— (20,435)
Acquisition of treasury stock— — — — — (132,720)(132,720)
Stock-based compensation— — (11,422)— 1,168 18,142 7,888 
Exercise of stock options— — — — (12,807)45,531 32,724 
Balance at March 31, 2021
— 113,218 516,013 2,024,515 6,020,552 (841,961)7,832,337 
Comprehensive income (loss)— — — 725,764 199,618 — 925,382 
Common dividends declared
($0.1975 per share)
— — — — (20,171)— (20,171)
Acquisition of treasury stock— — — — — (162,864)(162,864)
Stock-based compensation— — 8,634 — — — 8,634 
Exercise of stock options— — — — (14,033)47,637 33,604 
Balance at June 30, 2021
— 113,218 524,647 2,750,279 6,185,966 (957,188)8,616,922 
Comprehensive income (loss)— — — (88,660)188,871 — 100,211 
Common dividends declared
($0.1975 per share)
— — — — (19,981)— (19,981)
Acquisition of treasury stock— — — — — (97,796)(97,796)
Stock-based compensation— — 9,036 — (1,260)— 7,776 
Exercise of stock options— — — — (335)1,354 1,019 
Balance at September 30, 2021
$— $113,218 $533,683 $2,661,619 $6,353,261 $(1,053,630)$8,608,151 
.






















See accompanying Notes to Condensed Consolidated Financial Statements.
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Globe Life Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollar amounts in thousands)
Nine Months Ended
September 30,
20222021
Cash provided from (used for) operating activities
$1,050,387 $1,060,022 
Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold346,722 91,795 
Fixed maturities available for sale—matured or other redemptions387,787 249,653 
Other long-term investments55,877 36,060 
Total investments sold or matured790,386 377,508 
Acquisition of investments:
Fixed maturities—available for sale(1,178,751)(687,993)
Other long-term investments(186,275)(206,609)
Total investments acquired(1,365,026)(894,602)
Net (increase) decrease in policy loans(15,792)(1,412)
Net (increase) decrease in short-term investments(16,628)14,418 
Additions to properties(19,766)(30,730)
Other investing activities— (59,200)
Investments in low-income housing interests(64,023)(35,236)
Cash provided from (used for) investing activities
(690,849)(629,254)
Cash provided from (used for) financing activities:
Issuance of common stock49,536 67,347 
Cash dividends paid to shareholders(60,441)(60,068)
Repayment of debt(150,000)(300,000)
Proceeds from issuance of debt250,492 325,000 
Payment for debt issuance costs(5,272)(7,639)
Net borrowing (repayment) of commercial paper(60,582)(10,991)
Acquisition of treasury stock(335,452)(393,380)
Net receipts (payments) from deposit-type products(66,078)(48,276)
Cash provided from (used for) financing activities
(377,797)(428,007)
Effect of foreign exchange rate changes on cash11,682 (1,283)
Net increase (decrease) in cash(6,577)1,478 
Cash at beginning of year92,163 94,847 
Cash at end of period $85,586 $96,325 







See accompanying Notes to Condensed Consolidated Financial Statements.
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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 1—Significant Accounting Policies

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

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

Basis of Presentation: The accompanying condensed consolidated financial statements of Globe Life have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America (GAAP) for annual financial statements. However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial position at September 30, 2022, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended September 30, 2022 and 2021. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Form 10-K filed with the Securities Exchange Commission (SEC) on February 24, 2022.

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


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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 2—New Accounting Standards

Accounting Pronouncements Yet to be Adopted

ASU No. 2018-12 / 2019-09 / 2020-11, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, with clarification guidance issued in November 2019 and 2020.

ASU 2018-12 is a significant change to the accounting and disclosure of long-duration life and health insurance contracts. The guidance was issued primarily to: 1) improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows, 2) simplify and improve the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts, 3) simplify the amortization of deferred acquisition costs, and 4) improve the effectiveness of the required disclosures.

As a result of the issuance of ASU 2020-11 in November 2020, the effective date for this standard was changed to January 1, 2023. Early adoption is available; however, the Company will not early adopt the standard and has selected the modified retrospective transition method upon adoption as of the transition date (“Transition Date”) of January 1, 2021. The modified retrospective transition method requires the amended guidance be applied to contracts issued after the beginning of the earliest period presented, or the Transition Date, which will result in the restatement of the 2021 and 2022 consolidated financial statements.

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

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

On the Transition Date, using current discount rates applicable at that time, we expect the after-tax impact to AOCI to be a decrease in the range of $7.5 billion to $8.5 billion due to a $9.5 billion to $11.0 billion increase in future policy benefits. Holding all else equal but using discount rates as of September 30, 2022, the increase in future policy benefits would have been $1.2 billion to $2.0 billion. Under the new standard, the future policy benefits recorded on the Consolidated Balance Sheets are different than those used in the determination of net income. Future policy benefits recorded within the Consolidated Balance Sheets are determined using current discount rates as of the valuation date, while future policy benefits used for the determination of net income are determined using locked-in discount rates1 based on policy issue dates. On the Transition Date, two significant drivers of the increase in future policy benefits and decrease in AOCI within the Consolidated Balance Sheets are the lower level of current discount rates as compared to the locked-in discount rates used under prior guidance and the long average life of
1 Locked-in discount rates are those discount rates which are established at issue and locked-in for each year of issue for use in establishing reserves to compute net income.
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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
the Company’s life insurance cash flows. Another driver of the large increase in future policy benefits is the required use of the same net premium ratio2 using locked-in discount rates and current discount rates.

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

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

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

While the requirements of the new guidance represent a change from existing GAAP, the new guidance will not impact capital and surplus or net income under statutory accounting practices, cash flows on our policies, or the underlying economics of our business.

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

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

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



2 The net premium ratio is the ratio between the present value of benefits and the present value of gross premium.
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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, 2022 and 2021:
 Three Months Ended September 30, 2022
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at July 1, 2022
$(643,385)$1,682 $8,453 $(98,243)$(731,493)
Other comprehensive income (loss) before reclassifications, net of tax(1,079,185)3,711 (16,891)— (1,092,365)
Reclassifications, net of tax9,592 — — 2,717 12,309 
Other comprehensive income (loss)(1,069,593)3,711 (16,891)2,717 (1,080,056)
Balance at September 30, 2022
$(1,712,978)$5,393 $(8,438)$(95,526)$(1,811,549)

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

 Nine Months Ended September 30, 2022
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at January 1, 2022
$2,765,290 $(3,418)$19,387 $(103,676)$2,677,583 
Other comprehensive income (loss) before reclassifications, net of tax(4,502,261)8,811 (27,825)— (4,521,275)
Reclassifications, net of tax23,993 — — 8,150 32,143 
Other comprehensive income (loss)(4,478,268)8,811 (27,825)8,150 (4,489,132)
Balance at September 30, 2022
$(1,712,978)$5,393 $(8,438)$(95,526)$(1,811,549)

 Nine Months Ended September 30, 2021
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at January 1, 2021
$3,175,572 $(4,704)$23,302 $(164,926)$3,029,244 
Other comprehensive income (loss) before reclassifications, net of tax(355,322)947 (1,007)— (355,382)
Reclassifications, net of tax(24,566)— — 12,323 (12,243)
Other comprehensive income (loss)(379,888)947 (1,007)12,323 (367,625)
Balance at September 30, 2021
$2,795,684 $(3,757)$22,295 $(152,603)$2,661,619 

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Reclassification Adjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are presented below for the three and nine month periods ended September 30, 2022 and 2021.
  Three Months Ended
September 30,		Nine Months Ended September 30,Affected line items in the Statement of Operations
Component Line Item2022202120222021
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses$12,256 $(16,269)$29,741 $(35,925)Realized (gains) losses
Amortization of (discount) premium(114)1,670 630 4,829 Net investment income
Total before tax12,142 (14,599)30,371 (31,096)
Tax(2,550)3,066 (6,378)6,530 Income taxes
Total after-tax9,592 (11,533)23,993 (24,566)
Pension adjustments:
Amortization of prior service cost158 158 474 474 Other operating expense
Amortization of actuarial (gain) loss3,280 5,040 9,842 15,124 Other operating expense
Total before tax3,438 5,198 10,316 15,598 
Tax(721)(1,090)(2,166)(3,275)Income taxes
Total after-tax2,717 4,108 8,150 12,323 
Total reclassification (after-tax)
$12,309 $(7,425)$32,143 $(12,243)

Note 4—Investments

Portfolio Composition: Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance for credit losses at September 30, 2022 and December 31, 2021, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows. Redeemable preferred stock is included within "Corporates, by sector."
At September 30, 2022

Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
 Value(1)
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises$389,357 $— $2 $(36,510)$352,849 2 
States, municipalities, and political subdivisions2,739,017 — 24,724 (598,476)2,165,265 14 
Foreign governments50,144 — 42 (10,277)39,909 — 
Corporates, by sector:
Financial4,818,454 — 49,913 (552,378)4,315,989 27 
Utilities1,906,747 — 30,252 (144,762)1,792,237 11 
Energy1,466,551 — 14,281 (135,922)1,344,910 8 
Other corporate sectors6,677,566 — 49,208 (866,795)5,859,979 37 
Total corporates14,869,318 — 143,654 (1,699,857)13,313,115 83 
Collateralized debt obligations36,721 — 13,874 — 50,595 — 
Other asset-backed securities88,914 — 5 (5,512)83,407 1 
Total fixed maturities
$18,173,471 $— $182,301 $(2,350,632)$16,005,140 100 
(1)Amount reported in the balance sheet.
(2)At fair value.
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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
At December 31, 2021
Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
 Value(1)
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises$383,083 $— $64,513 $(164)$447,432 2 
States, municipalities, and political subdivisions2,252,997 — 239,135 (2,907)2,489,225 12 
Foreign governments59,861 — 900 (5,132)55,629 — 
Corporates, by sector:
Financial4,569,160 (387)907,741 (9,349)5,467,165 26 
Utilities1,931,391 — 490,119 (1,012)2,420,498 11 
Energy1,587,892 — 346,780 (1,683)1,932,989 9 
Other corporate sectors6,879,459 — 1,454,464 (13,362)8,320,561 39 
Total corporates14,967,902 (387)3,199,104 (25,406)18,141,213 85 
Collateralized debt obligations36,468 — 27,037 — 63,505 — 
Other asset-backed securities104,998 — 3,715 (430)108,283 1 
Total fixed maturities
$17,805,309 $(387)$3,534,404 $(34,039)$21,305,287 100 
(1)Amount reported in the balance sheet.
(2)At fair value.


A schedule of fixed maturities available for sale by contractual maturity date at September 30, 2022, is shown below on an amortized cost basis, net of allowance for credit losses, and on a fair value basis. Actual disposition dates could differ from contractual maturities due to call or prepayment provisions.
At September 30, 2022
Amortized
Cost, net		Fair
Value
Fixed maturities available for sale:
Due in one year or less$162,473 $163,087 
Due after one year through five years1,020,894 1,021,499 
Due after five years through ten years1,716,490 1,695,969 
Due after ten years through twenty years7,477,686 6,932,181 
Due after twenty years7,670,293 6,058,402 
Mortgage-backed and asset-backed securities125,635 134,002 
$18,173,471 $16,005,140 

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Analysis of Investment Operations: "Net investment income" for the three and nine month periods ended September 30, 2022 and 2021 is summarized as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
20222021% Change20222021% Change
Fixed maturities available for sale$227,673 $223,287 2 $679,710 $668,284 2 
Policy loans11,716 11,376 3 34,724 33,968 2 
Other long-term investments(1)
10,933 9,390 16 34,349 26,432 30 
Short-term investments969 10 1,093 20 
251,291 244,063 3 749,876 728,704 3 
Less investment expense(5,666)(5,088)11 (16,775)(15,601)8 
Net investment income
$245,625 $238,975 3 $733,101 $713,103 3 
(1)For the three months ended September 30, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $8.4 million and $7.1 million of distributions, respectively, in net investment income. For the nine months ended September 30, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $27.7 million and $19.4 million of distributions, respectively, in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.


Selected information about sales of fixed maturities available for sale is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Fixed maturities available for sale:
Proceeds from sales(1)
$127,695 $17,085 $346,722 $91,795 
Gross realized gains165 304 938 1,438 
Gross realized losses(11,537)— (56,384)(12,101)
(1)There were no unsettled sales in the periods ended September 30, 2022 and 2021.

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

An analysis of "Realized gains (losses)" is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)
$(12,256)$16,269 $(30,128)$32,578 
Provision for credit losses— — 387 3,346 
Fair value option—change in fair value(11,551)1,585 (15,942)14,013 
Other investments(5,348)1,935 (21,162)6,663 
Realized gains (losses) from investments
(29,155)19,789 (66,845)56,600 
Realized loss on redemption of debt — (9,314)— (9,314)
Total realized gains (losses)(29,155)10,475 (66,845)47,286 
Applicable tax6,122 (2,200)14,037 (9,930)
Realized gains (losses), net of tax
$(23,033)$8,275 $(52,808)$37,356 
(1)During the three months ended September 30, 2022 and 2021, the Company recorded $22.1 million and $0 of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $0, respectively, in realized gains (losses). During the nine months ended September 30, 2022 and 2021, the Company recorded $24.0 million and $108.3 million of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $25.2 million, respectively, in realized gains (losses).

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fair Value Measurements: The following tables represent the fair value of fixed maturities measured on a recurring basis at September 30, 2022 and December 31, 2021:
Fair Value Measurement at September 30, 2022 Using:
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs (Level 3)		Total Fair
Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises $— $352,849 $— $352,849 
States, municipalities, and political subdivisions — 2,165,265 — 2,165,265 
Foreign governments — 39,909 — 39,909 
Corporates, by sector:
Financial — 4,202,350 113,639 4,315,989 
Utilities — 1,681,228 111,009 1,792,237 
Energy — 1,333,105 11,805 1,344,910 
Other corporate sectors — 5,611,867 248,112 5,859,979 
Total corporates — 12,828,550 484,565 13,313,115 
Collateralized debt obligations — — 50,595 50,595 
Other asset-backed securities — 83,407 — 83,407 
Total fixed maturities
$— $15,469,980 $535,160 $16,005,140 
Percentage of total— %97 %3 %100 %

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

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        GL Q3 2022 FORM 10-Q
Table of Contents
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		CorporatesTotal
Balance at January 1, 2022
$— $63,505 $641,688 $705,193 
Included in realized gains / losses— — — — 
Included in other comprehensive income— (13,163)(114,525)(127,688)
Acquisitions— — — — 
Sales— — — — 
Amortization— 3,382 6 3,388 
Other(1)
— (3,129)(42,604)(45,733)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at September 30, 2022
$— $50,595 $484,565 $535,160 
Percent of total fixed maturities— %— %3 %3 %
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments. 
(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.

Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Balance at January 1, 2021
$12,870 $71,598 $714,505 $798,973 
Included in realized gains / losses(82)(6,787)2,733 (4,136)
Included in other comprehensive income63 12,482 (15,346)(2,801)
Acquisitions— — 25,000 25,000 
Sales(12,851)(13,213)— (26,064)
Amortization— 3,388 8 3,396 
Other(1)
— (4,307)(72,730)(77,037)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at September 30, 2021
$— $63,161 $654,170 $717,331 
Percent of total fixed maturities— %— %3 %3 %
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments. 
(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.

16
        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table presents changes in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period for Level 3s:
Changes in Unrealized Gains (Losses) included in Other Comprehensive Income for Assets Held at the End of the Period
Asset-
backed Securities		Collateralized
Debt
Obligations		CorporatesTotal
At September 30, 2022
$— $(13,163)$(114,525)$(127,688)
At September 30, 2021
63 12,482 (15,346)(2,801)
 
Unrealized Loss Analysis: The following table discloses information about fixed maturities available for sale in an unrealized loss position.
Less than Twelve MonthsTwelve Months or LongerTotal
Number of issues (CUSIPs) held:
As of September 30, 20221,886 122 2,008 
As of December 31, 2021138 42 180 
 
Globe Life's entire fixed maturity portfolio consisted of 2,275 issues by 957 different issuers at September 30, 2022 and 2,060 issues by 843 different issuers at December 31, 2021. The weighted-average quality rating of all unrealized loss positions at amortized cost was A- as of September 30, 2022 and December 31, 2021.




17
        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at September 30, 2022 and December 31, 2021.

Analysis of Gross Unrealized Investment Losses
At September 30, 2022
Less than Twelve MonthsTwelve Months or LongerTotal
Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises$349,350 $(35,764)$3,416 $(746)$352,766 $(36,510)
States, municipalities and political subdivisions1,728,650 (562,887)52,359 (35,589)1,781,009 (598,476)
Foreign governments5,754 (142)23,983 (10,135)29,737 (10,277)
Corporates, by sector:
Financial2,895,779 (490,451)75,439 (27,653)2,971,218 (518,104)
Utilities1,114,356 (135,376)20,829 (6,416)1,135,185 (141,792)
Energy958,397 (125,270)— — 958,397 (125,270)
Other corporate sectors4,378,481 (799,054)80,275 (37,894)4,458,756 (836,948)
Total corporates9,347,013 (1,550,151)176,543 (71,963)9,523,556 (1,622,114)
Collateralized debt obligations— — — — — — 
Other asset-backed securities61,532 (4,177)9,712 (711)71,244 (4,888)
Total investment grade securities11,492,299 (2,153,121)266,013 (119,144)11,758,312 (2,272,265)
Below investment grade securities:
States, municipalities and political subdivisions— — — — — — 
Corporates, by sector:
Financial127,557 (18,081)39,446 (16,193)167,003 (34,274)
Utilities27,925 (2,970)— — 27,925 (2,970)
Energy14,220 (2,453)19,868 (8,199)34,088 (10,652)
Other corporate sectors167,639 (25,403)6,861 (4,444)174,500 (29,847)
Total corporates337,341 (48,907)66,175 (28,836)403,516 (77,743)
Collateralized debt obligations— — — — — — 
Other asset-backed securities— — 12,083 (624)12,083 (624)
Total below investment grade securities337,341 (48,907)78,258 (29,460)415,599 (78,367)
Total fixed maturities
$11,829,640 $(2,202,028)$344,271 $(148,604)$12,173,911 $(2,350,632)
 
Gross unrealized losses may fluctuate quarter over quarter due to adverse factors in the market that affect our holdings, such as changes in interest rates or credit spreads. The Company considers many factors when determining whether an allowance for a credit loss should be recorded. While the Company holds securities that may be in an unrealized loss position from time to time, Globe Life does not generally intend to sell and it is likely that management will not be required to sell the fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Analysis of Gross Unrealized Investment Losses
At December 31, 2021
Less than Twelve MonthsTwelve Months or LongerTotal
Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises$118 $(1)$3,867 $(163)$3,985 $(164)
States, municipalities and political subdivisions141,310 (2,824)2,436 (83)143,746 (2,907)
Foreign governments12,567 (561)23,144 (4,571)35,711 (5,132)
Corporates, by sector:
Financial133,654 (1,507)52,864 (1,932)186,518 (3,439)
Utilities25,447 (692)2,372 (320)27,819 (1,012)
Energy6,519 (238)— — 6,519 (238)
Other corporate sectors115,444 (3,566)40,249 (3,670)155,693 (7,236)
Total corporates281,064 (6,003)95,485 (5,922)376,549 (11,925)
Collateralized debt obligations— — — — — — 
Other asset-backed securities10,489 (16)1 — 10,490 (16)
Total investment grade securities445,548 (9,405)124,933 (10,739)570,481 (20,144)
Below investment grade securities:
States, municipalities and political subdivisions— — — — — — 
Corporates, by sector:
Financial15,695 (272)56,897 (5,638)72,592 (5,910)
Utilities— — — — — — 
Energy— — 26,639 (1,445)26,639 (1,445)
Other corporate sectors700 (11)26,581 (6,115)27,281 (6,126)
Total corporates16,395 (283)110,117 (13,198)126,512 (13,481)
Collateralized debt obligations— — — — — — 
Other asset-backed securities— — 13,043 (414)13,043 (414)
Total below investment grade securities16,395 (283)123,160 (13,612)139,555 (13,895)
Total fixed maturities
$461,943 $(9,688)$248,093 $(24,351)$710,036 $(34,039)


19
        GL Q3 2022 FORM 10-Q
Table of Contents
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,
2022202120222021
Allowance for credit losses beginning balance
$— $— $387 $3,346 
Additions to allowance for which credit losses were not previously recorded— — — — 
Additions (reductions) to allowance for fixed maturities that previously had an allowance— — — — 
Reduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period— — (387)(3,346)
Allowance for credit losses ending balance
$— $— $— $— 

As of September 30, 2022 and December 31, 2021, the Company did not have any fixed maturities in non-accrual status.

Other Long-Term Investments: Other long-term investments consist of the following assets:
September 30,
2022		December 31, 2021
Investment funds$748,219 $640,263 
Commercial mortgage loan participations140,069 141,843 
Other19,102 11,819 
Total
$907,390 $793,925 

The following table presents additional information about the Company's investment funds as of September 30, 2022 and December 31, 2021 at fair value:
Fair ValueUnfunded Commitments
Investment CategorySeptember 30,
2022		December 31, 2021September 30,
2022		Redemption Term/Notice
Commercial mortgage loans$425,189 $423,776 $354,361 Fully redeemable and non-redeemable with varying terms.
Opportunistic credit159,972 178,215 — 
Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.
Infrastructure149,532 22,664 30,338 Fully redeemable and non-redeemable with varying terms.
Other13,526 15,608 127,500 
Total investment funds $748,219 $640,263 $512,199 

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


20
        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Commercial Mortgage Loan Participations (commercial mortgage loans): Summaries of commercial mortgage loans by property type and geographical location at September 30, 2022 and December 31, 2021 are as follows:
September 30, 2022December 31, 2021
Carrying Value% of TotalCarrying Value% of Total
Property type:
Mixed use$62,239 45 $57,996 41 
Hospitality20,767 15 23,186 16 
Retail19,423 14 19,811 14 
Industrial17,308 12 17,900 13 
Multi-family14,386 10 14,872 11 
Office8,106 6 8,905 6 
Total recorded investment142,229 102 142,670 101 
Less allowance for credit losses(2,160)(2)(827)(1)
Carrying value, net of allowance for credit losses
$140,069 100 $141,843 100 

September 30, 2022December 31, 2021
Carrying Value% of TotalCarrying Value% of Total
Geographic location:
California$68,698 49 $67,659 48 
New York19,452 14 18,373 13 
Pennsylvania11,673 8 11,673 8 
Indiana9,717 7 9,717 7 
Florida8,279 6 8,213 6 
Texas6,136 5 5,898 4 
Other18,274 13 21,137 15 
Total recorded investment142,229 102 142,670 101 
Less allowance for credit losses(2,160)(2)(827)(1)
Carrying value, net of allowance for credit losses
$140,069 100 $141,843 100 

21
        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables are reflective of Management's internal risk ratings of the loan portfolio. Loans are rated low, moderate, and high. The risk categories consider many different factors such as quality of asset, borrower status, as well as macroeconomic factors including COVID-19. These loans, originated in 2017 to 2022, are transitional or under construction and may not yet be income producing. Certain ratios, such as loan to value and debt service coverage ratios, may not be evaluated as the value of the underlying transitional property significantly fluctuates based on completion of the project.
Net Book Value of Commercial Mortgage Loans Receivable by Year of Origination
As of September 30, 2022
Risk Rating:Number of Loans202220212020201920182017Total
Low14 $3,000 $— $27,181 $12,337 $35,462 $36,188 $114,168 
Moderate 5 — — 1,195 15,722 — — 16,917 
High2 — — — 4,110 7,034 — 11,144 
Total commercial mortgage loans21 $3,000 $— $28,376 $32,169 $42,496 $36,188 142,229 
Less allowance for credit losses on the investment pool(1,151)
Less allowance for credit losses on individual loans(1,009)
Carrying value, net of valuation allowance
$140,069 

Net Book Value of Commercial Mortgage Loans Receivable by Year of Origination
As of December 31, 2021
Risk Rating:Number of Loans20212020201920182017Total
Low14 $— $23,636 $11,925 $41,209 $35,729 $112,499 
Moderate6 — 1,400 17,173 — — 18,573 
High2 — — 4,593 7,005 — 11,598 
Total commercial mortgage loans22 $— $25,036 $33,691 $48,214 $35,729 142,670 
Less allowance for credit losses on the investment pool(827)
Less allowance for credit losses on individual loans— 
Carrying value, net of valuation allowance
$141,843 
As of September 30, 2022, the Company evaluated the commercial mortgage loan portfolio on a pool basis to determine the allowance for credit losses. At the end of the period, the Company had 21 loans in the portfolio. For the nine months ended September 30, 2022, the allowance for credit losses increased $1.3 million. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Allowance for credit losses beginning balance
$1,109 $1,639 $827 $3,505 
Provision (reversal) for credit losses1,051 (455)1,333 (2,321)
Allowance for credit losses ending balance
$2,160 $1,184 $2,160 $1,184 

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

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 5—Commitments and Contingencies

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

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

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


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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 6—Liability for Unpaid Claims

Activity in the liability for unpaid health claims is summarized as follows:
September 30,
2022		December 31,
2021
Balance at beginning of period
$167,832 $162,261 
Incurred related to:
Current year508,415 638,054 
Prior year(14,117)(22,477)
Total incurred494,298 615,577 
Paid related to:
Current year359,486 487,096 
Prior year124,805 122,910 
Total paid484,291 610,006 
Balance at end of period
$177,839 $167,832 

Below is the reconciliation of the liability of "Policy claims and other benefits payable" in the Condensed Consolidated Balance Sheets.
September 30,
2022		December 31,
2021
Policy claims and other benefits payable:
Life insurance$239,900 $245,108 
Health insurance177,839 167,832 
Total$417,739 $412,940 

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 7—Postretirement Benefits

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

Pension Assets: The following table presents the assets of the Company's Pension Plans at September 30, 2022 and December 31, 2021.

Pension Assets by Component at September 30, 2022
 Fair Value Determined by:  
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial$— $39,536 $— $39,536 8 
Utilities— 33,005 — 33,005 7 
Energy— 17,439 — 17,439 4 
Other corporates— 59,738 — 59,738 12 
Total corporate bonds— 149,718 — 149,718 31 
Exchange traded fund(1)
239,191 — — 239,191 49 
Other bonds— 201 — 201 — 
Guaranteed annuity contract(2)
— 43,433 — 43,433 9 
Short-term investments28,311 — — 28,311 6 
Other7,538 — — 7,538 2 
$275,040 $193,352 $— 468,392 97 
Other long-term investments(3)
14,237 3 
Total pension assets
$482,629 100 
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns less than 1% of the investment fund. As of September 30, 2022, the expected term of the investment fund is approximately 2 years and the commitment of the investment is fully funded. The investment is non-redeemable.

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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Pension Assets by Component at December 31, 2021
 Fair Value Determined by:  
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial$— $52,522 $— $52,522 9 
Utilities— 43,663 — 43,663 7 
Energy— 22,719 — 22,719 4 
Other corporates— 88,673 — 88,673 15 
Total corporate bonds— 207,577 — 207,577 35 
Exchange traded fund(1)
315,720 — — 315,720 52 
Other bonds— 239 — 239 — 
Guaranteed annuity contract(2)
— 34,743 — 34,743 6 
Short-term investments13,731 — — 13,731 2 
Other10,388 — — 10,388 2 
$339,839 $242,559 $— 582,398 97 
Other long-term investments(3)
15,149 3 
Total pension assets
$597,547 100 
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns approximately 1% of the investment fund. As of December 31, 2021, the expected term of the investment fund was approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.


SERP: The following table includes information regarding the SERP.
Nine Months Ended
September 30,
20222021
Premiums paid for insurance coverage$443 $2,193 
September 30,
2022		December 31,
2021
Total investments:
Company owned life insurance $54,274 $52,791 
Exchange traded funds68,643 87,133 
$122,917 $139,924 


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        GL Q3 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Pension Plans and SERP Liabilities: The following table presents liabilities for the defined benefit pension plans and SERP at September 30, 2022 and December 31, 2021.
September 30,
2022		December 31,
2021
Pension Plans$517,293 $686,917 
SERP92,050 92,017 
Pension benefit obligation
$609,343 $778,934 

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

Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the Pension Plans and SERP by expense components for the three and nine months ended September 30, 2022 and 2021.

Components of Net Periodic Benefit Cost
Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Service cost$8,657 $7,919 $25,968 $23,755 
Interest cost6,124 5,467 18,368 16,403 
Expected return on assets(8,885)(8,083)(26,655)(24,249)
Amortization:
Prior service cost158 158 474 474 
Actuarial (gain) loss3,208 4,984 9,625 14,953 
Net periodic benefit cost
$9,262 $10,445 $27,780 $31,336 


Note 8—Earnings Per Share

Earnings per Share: A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Basic weighted average shares outstanding97,258,349 101,498,408 98,244,271 102,618,327 
Weighted average dilutive options outstanding889,175 882,609 857,964 1,171,159 
Diluted weighted average shares outstanding98,147,524 102,381,017 99,102,235 103,789,486 
Antidilutive shares2,602,609 2,601,499 2,351,522 2,349,321 

Antidilutive shares are excluded from the calculation of diluted earnings per share. 
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        GL Q3 2022 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—Debt

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

The following table presents information about the terms and outstanding balances of Globe Life's debt.
 
Selected Information about Debt Issues
As of
September 30,
2022		December 31,
2021
InstrumentIssue DateMaturity Date Coupon Rate Par
Value		Unamortized Discount & Issuance CostsBook
Value		Fair
Value		Book
Value
Senior notes5/27/19935/15/20237.875%$165,612 $(185)$165,427 $167,781 $165,216 
Senior notes(2)
———————149,752 
Senior notes9/27/20189/15/20284.550%550,000 (4,562)545,438 526,702 544,949 
Senior notes8/21/20208/15/20302.150%400,000 (3,891)396,109 310,560 395,778 
Senior notes(1)
5/19/20226/15/20324.800%250,000 (4,616)245,384 231,700 — 
Junior subordinated debentures11/17/201711/17/20575.275%125,000 (1,594)123,406 124,016 123,396 
Junior subordinated debentures6/14/20216/15/20614.250%325,000 (7,790)317,210 252,545 317,155 
1,815,612 (22,638)1,792,974 1,613,304 1,696,246 
Less current maturity of long-term debt165,612 (185)165,427 167,781 149,752 
Total long-term debt
1,650,000 (22,453)1,627,547 1,445,523 1,546,494 
Current maturity of long-term debt)
165,612 (185)165,427 167,781 149,752 
Commercial paper270,000 (690)269,310 269,310 329,892 
Total short-term debt
435,612 (875)434,737 437,091 479,644 
Total debt
$2,085,612 $(23,328)$2,062,284 $1,882,614 $2,026,138 
(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.
(2)The $300 million of 3.80% Senior notes matured on September 15, 2022, of which $150 million was owned by Globe Life affiliates.

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

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

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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Globe Life owns $13.0 million in FHLB common stock as of September 30, 2022 and $7.9 million as of December 31, 2021. The FHLB stock is restricted for the duration of the membership and recorded at cost (par) as required by applicable guidance. The FHLB stock is included in "Other long-term investments" in the Condensed Consolidated Balance Sheets.

As of September 30, 2022, there were no outstanding borrowings with the FHLB. Borrowings with the FHLB are subject to the availability of pledged assets at Globe Life. As of September 30, 2022, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $526 million, based on pledged assets with a fair value of $737 million.


Note 10—Business Segments

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

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

Life insurance products marketed by Globe Life include traditional whole life and term life insurance. An immaterial amount of annuities sold as companion products are included in the life segment. Health insurance products are generally guaranteed renewable and include Medicare Supplement, critical illness, accident, and limited-benefit supplemental hospital and surgical coverage. Annuities include fixed-benefit contracts.
 
Globe Life markets its insurance products through a number of distribution channels, each of which sells the products of one or more of Globe Life's insurance segments. Our distribution channels consist of the following exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National) and Family Heritage Division (Family Heritage); an independent agency, United American Division (United American); and our Direct to Consumer Division (Direct to Consumer). The following tables present segment premium revenue by each of Globe Life's distribution channels.

Premium Income by Distribution Channel
Three Months Ended September 30, 2022
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$378,306 50 $29,694 9 $— — $408,000 38 
Direct to Consumer242,550 32 17,455 6 — — 260,005 24 
Liberty National82,072 11 45,809 14 — — 127,881 12 
United American1,949 — 134,200 42 1 100 136,150 13 
Family Heritage1,408 — 92,131 29 — — 93,539 9 
Other