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GLOBE LIFE INC. - Quarter Report: 2022 March (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 March 31, 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 April 26, 2022
Common Stock, $1.00 Par Value 98,599,602
Q1 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.
Q1 2022 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)
March 31,
2022		December 31, 2021
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2022—$17,975,410;
2021—$17,805,309, allowance for credit losses: 2022— $0; 2021— $387)
$19,179,107 $21,305,287 
Policy loans591,958 589,634 
Other long-term investments (includes: 2022—$732,360; 2021—$640,263 under the fair value option)
889,769 793,925 
Short-term investments57,344 69,145 
Total investments20,718,178 22,757,991 
Cash127,628 92,163 
Accrued investment income269,975 251,307 
Other receivables487,929 487,443 
Deferred acquisition costs4,999,935 4,914,728 
Goodwill481,791 481,791 
Other assets764,892 782,625 
Total assets$27,850,328 $29,768,048 
Liabilities:
Future policy benefits$16,229,940 $16,034,727 
Unearned and advance premium70,889 65,472 
Policy claims and other benefits payable433,553 412,940 
Other policyholders' funds99,606 98,935 
Total policy liabilities16,833,988 16,612,074 
Current and deferred income taxes1,298,911 1,765,021 
Short-term debt522,079 479,644 
Long-term debt (estimated fair value: 2022—$1,525,731; 2021—$1,667,009)
1,546,858 1,546,494 
Other liabilities754,472 722,009 
Total liabilities20,956,308 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-capital523,068 520,564 
Accumulated other comprehensive income (loss)869,495 2,677,583 
Retained earnings6,315,609 6,182,100 
Treasury stock, at cost: (2022—10,343,676 shares; 2021—9,650,845 shares)
(923,370)(846,659)
Total shareholders' equity6,894,020 8,642,806 
Total liabilities and shareholders' equity$27,850,328 $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
March 31,
20222021
Revenue:
Life premium$754,602 $708,119 
Health premium317,000 294,173 
Other premium— 1 
Total premium1,071,602 1,002,293 
Net investment income243,834 235,820 
Realized gains (losses)(7,244)28,152 
Other income164 295 
Total revenue1,308,356 1,266,560 
Benefits and expenses:
Life policyholder benefits549,343 517,631 
Health policyholder benefits196,855 187,829 
Other policyholder benefits7,050 7,259 
Total policyholder benefits753,248 712,719 
Amortization of deferred acquisition costs158,384 152,993 
Commissions, premium taxes, and non-deferred acquisition costs90,813 79,666 
Other operating expense84,352 81,210 
Interest expense19,944 21,178 
Total benefits and expenses1,106,741 1,047,766 
Income before income taxes201,615 218,794 
Income tax benefit (expense)(37,254)(40,277)
Net income
$164,361 $178,517 
Basic net income per common share
$1.66 $1.73 
Diluted net income per common share
$1.64 $1.70 















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
March 31,
20222021
Net income
$164,361 $178,517 
Other comprehensive income (loss):
Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period(2,292,922)(1,262,059)
Provision for credit losses
Other reclassification adjustments included in net income(4,030)(17,142)
Foreign exchange adjustment on fixed maturities recorded at fair value284 2,442 
Total unrealized investment gains (losses)(2,296,668)(1,276,759)
Less applicable tax (expense) benefit482,299 268,119 
Unrealized gains (losses) on investments, net of tax(1,814,369)(1,008,640)
Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costs376 359 
Less applicable tax (expense) benefit(79)(75)
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax297 284 
Foreign exchange translation:
Foreign exchange translation adjustments, other than securities4,138 (610)
Less applicable tax (expense) benefit(869)128 
Foreign exchange translation adjustments, other than securities, net of tax3,269 (482)
Pension:
Pension adjustments3,437 5,200 
Less applicable tax (expense) benefit(722)(1,091)
Pension adjustments, net of tax2,715 4,109 
Other comprehensive income (loss)(1,808,088)(1,004,729)
Comprehensive income (loss)
$(1,643,727)$(826,212)












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 



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 
.
























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)
Three Months Ended
March 31,
20222021
Cash provided from (used for) operating activities
$397,133 $371,830 
Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold75,116 61,858 
Fixed maturities available for sale—matured or other redemptions115,160 36,683 
Other long-term investments20,929 3,733 
Total investments sold or matured211,205 102,274 
Acquisition of investments:
Fixed maturities—available for sale(339,145)(295,869)
Other long-term investments(122,010)(65,997)
Total investments acquired(461,155)(361,866)
Net (increase) decrease in policy loans(2,324)82 
Net (increase) decrease in short-term investments11,801 14,434 
Additions to properties(6,981)(15,529)
Investments in low-income housing interests(27,870)(9,080)
Cash provided from (used for) investing activities
(275,324)(269,685)
Cash provided from (used for) financing activities:
Issuance of common stock25,931 32,724 
Cash dividends paid to shareholders(19,687)(19,511)
Net borrowing (repayment) of commercial paper42,348 20,001 
Acquisition of treasury stock(119,482)(132,720)
Net receipts (payments) from deposit-type products(13,810)(13,811)
Cash provided from (used for) financing activities
(84,700)(113,317)
Effect of foreign exchange rate changes on cash(1,644)(2,171)
Net increase (decrease) in cash35,465 (13,343)
Cash at beginning of year92,163 94,847 
Cash at end of period $127,628 $81,504 









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 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 consolidated financial position at March 31, 2022, and the consolidated results of operations, comprehensive income, and cash flows for the periods ended March 31, 2022 and 2021. The interim period 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
StandardDescriptionEffective DateEffect on the Consolidated Financial Statements
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 our current accounting and disclosure of long-duration contracts, which is our primary business. The guidance was primarily issued 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.

On an annual basis, the Company will be required to update cash flow assumptions such as mortality, morbidity, and persistency, which are recorded in net income. On a quarterly basis, the 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).		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.
The Company does not expect to early adopt ASU 2018-12 and has selected a modified retrospective transition method upon adoption as of the transition date of January 1, 2021.

Due to the overall nature of this standard, the impact on the consolidated financial statements is expected to be significant. At the transition date, the Company expects a significant decrease in accumulated other comprehensive income due to the requirement to re-measure policy liabilities using an interest rate currently lower than what is used in valuing the policy liabilities under existing guidance. In addition, the new guidance requires the removal of interest on our DAC asset and changes the related amortization of the asset. These changes are expected to result in a significant reduction to DAC amortization in the near to intermediate term.

While the requirements of the new guidance represent a significant 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.

Significant progress has been made by the Company in order to timely adopt the new guidance, including validating computations, establishing proper controls, finalizing accounting policies, and preparing financial disclosures. The Company anticipates providing quantitative estimates of the impact of adoption of the ASU later this year once we have properly tested our models and assumptions and determined the appropriate discount rates.
 

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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 month periods ended March 31, 2022 and 2021:
 Three Months Ended March 31, 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(1,811,185)297 3,269 — (1,807,619)
Reclassifications, net of tax(3,184)— — 2,715 (469)
Other comprehensive income (loss)(1,814,369)297 3,269 2,715 (1,808,088)
Balance at March 31, 2022
$950,921 $(3,121)$22,656 $(100,961)$869,495 


 Three Months Ended March 31, 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(995,098)284 (482)— (995,296)
Reclassifications, net of tax(13,542)— — 4,109 (9,433)
Other comprehensive income (loss)(1,008,640)284 (482)4,109 (1,004,729)
Balance at March 31, 2021
$2,166,932 $(4,420)$22,820 $(160,817)$2,024,515 

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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 month periods ended March 31, 2022 and 2021.
  Three Months Ended March 31,Affected line items in the Statement of Operations
Component Line Item20222021
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses$(4,937)$(18,790)Realized (gains) losses
Amortization of (discount) premium907 1,648 Net investment income
Total before tax(4,030)(17,142)
Tax846 3,600 Income taxes
Total after-tax(3,184)(13,542)
Pension adjustments:
Amortization of prior service cost158 158 Other operating expense
Amortization of actuarial (gain) loss3,279 5,042 Other operating expense
Total before tax3,437 5,200 
Tax(722)(1,091)Income taxes
Total after-tax2,715 4,109 
Total reclassification (after-tax)
$(469)$(9,433)
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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 March 31, 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 March 31, 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$378,985 $— $23,462 $(717)$401,730 2 
States, municipalities, and political subdivisions2,398,188 — 106,675 (195,127)2,309,736 12 
Foreign governments60,836 — 469 (8,275)53,030 — 
Corporates, by sector:
Financial4,656,368 — 419,779 (83,808)4,992,339 26 
Utilities1,913,100 — 251,695 (10,273)2,154,522 11 
Energy1,586,815 — 178,334 (19,601)1,745,548 9 
Other corporate sectors6,843,681 — 608,394 (90,200)7,361,875 39 
Total corporates14,999,964 — 1,458,202 (203,882)16,254,284 85 
Collateralized debt obligations36,310 — 23,228 — 59,538 — 
Other asset-backed securities101,127 — 491 (829)100,789 1 
Total fixed maturities
$17,975,410 $— $1,612,527 $(408,830)$19,179,107 100 
(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, 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 March 31, 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 March 31, 2022
Amortized
Cost, net		Fair
Value
Fixed maturities available for sale:
Due in one year or less$112,714 $114,802 
Due after one year through five years989,010 1,050,870 
Due after five years through ten years1,723,492 1,902,841 
Due after ten years through twenty years7,046,768 7,962,921 
Due after twenty years7,965,869 7,987,219 
Mortgage-backed and asset-backed securities137,557 160,454 
$17,975,410 $19,179,107 

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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 month periods ended March 31, 2022 and 2021 is summarized as follows:
Three Months Ended
March 31,
20222021% Change
Fixed maturities available for sale$225,284 $221,719 2 
Policy loans11,428 11,268 1 
Other long-term investments(1)
12,713 8,162 56 
Short-term investments2 4 (50)
249,427 241,153 3 
Less investment expense(5,593)(5,333)5 
Net investment income
$243,834 $235,820 3 
(1) For the three months ended March 31, 2022 and 2021, the investment funds, accounted for under the fair value option method, recorded $10.7 million and $5.8 million of distributions, respectively in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.


Selected information about sales of fixed maturities available for sale is as follows:
Three Months Ended
March 31,
20222021
Fixed maturities available for sale:
Proceeds from sales(1)
$75,116 $61,858 
Gross realized gains773 1,134 
Gross realized losses(3,679)(12,019)
(1)There were no unsettled sales in the periods ended March 31, 2022 and 2021.


An analysis of "Realized gains (losses)" is as follows:
Three Months Ended
March 31,
20222021
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)
$4,549 $15,444 
Provision for credit losses387 3,346 
Fair value option—change in fair value(5,338)9,885 
Other investments(6,842)(523)
Realized gains (losses) from investments
(7,244)28,152 
Applicable tax1,521 (5,912)
Realized gains (losses), net of tax
$(5,723)$22,240 
(1)During the three months ended March 31, 2022 and 2021, the Company recorded $0 and $85.8 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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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fair Value Measurements: The following tables represent the fair value of fixed maturities measured on a recurring basis at March 31, 2022 and December 31, 2021:
Fair Value Measurement at March 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 $— $401,730 $— $401,730 
States, municipalities, and political subdivisions — 2,309,736 — 2,309,736 
Foreign governments — 53,030 — 53,030 
Corporates, by sector:
Financial — 4,835,986 156,353 4,992,339 
Utilities — 2,027,154 127,368 2,154,522 
Energy — 1,732,407 13,141 1,745,548 
Other corporate sectors — 7,072,767 289,108 7,361,875 
Total corporates — 15,668,314 585,970 16,254,284 
Collateralized debt obligations — — 59,538 59,538 
Other asset-backed securities — 100,789 — 100,789 
Total fixed maturities
$— $18,533,599 $645,508 $19,179,107 
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 %

13
        GL Q1 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— (3,809)(36,360)(40,169)
Acquisitions— — — — 
Sales— — — — 
Amortization— 1,123 1 1,124 
Other(1)
— (1,281)(19,359)(20,640)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at March 31, 2022
$— $59,538 $585,970 $645,508 
Percent of total fixed maturities— %— %3 %3 %
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments. 
(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— (6,787)— (6,787)
Included in other comprehensive income(1,261)9,900 (24,135)(15,496)
Acquisitions— — — — 
Sales— (13,213)— (13,213)
Amortization— 1,140 2 1,142 
Other(1)
— (1,337)(2,028)(3,365)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at March 31, 2021
$11,609 $61,301 $688,344 $761,254 
Percent of total fixed maturities— %1 %3 %4 %
(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.

14
        GL Q1 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 March 31, 2022
$— $(3,809)$(36,360)$(40,169)
At March 31, 2021
(1,261)9,900 (24,135)(15,496)
 
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 March 31, 2022915 54 969 
As of December 31, 2021138 42 180 
 
Globe Life's entire fixed maturity portfolio consisted of 2,091 issues by 876 different issuers at March 31, 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 and A- as of March 31, 2022 and December 31, 2021, respectively.




15
        GL Q1 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 March 31, 2022 and December 31, 2021.

Analysis of Gross Unrealized Investment Losses
At March 31, 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$27,111 $(271)$3,591 $(446)$30,702 $(717)
States, municipalities and political subdivisions1,308,081 (193,624)4,630 (1,503)1,312,711 (195,127)
Foreign governments7,738 (959)25,506 (7,316)33,244 (8,275)
Corporates, by sector:
Financial889,046 (62,791)54,507 (8,343)943,553 (71,134)
Utilities257,824 (8,762)4,736 (1,106)262,560 (9,868)
Energy236,413 (13,801)— — 236,413 (13,801)
Other corporate sectors1,003,128 (65,334)64,580 (14,433)1,067,708 (79,767)
Total corporates2,386,411 (150,688)123,823 (23,882)2,510,234 (174,570)
Collateralized debt obligations— — — — — — 
Other asset-backed securities44,651 (569)— — 44,651 (569)
Total investment grade securities3,773,992 (346,111)157,550 (33,147)3,931,542 (379,258)
Below investment grade securities:
States, municipalities and political subdivisions— — — — — — 
Corporates, by sector:
Financial56,133 (4,293)54,149 (8,381)110,282 (12,674)
Utilities14,690 (405)— — 14,690 (405)
Energy26,871 (718)22,996 (5,082)49,867 (5,800)
Other corporate sectors41,377 (2,624)24,854 (7,809)66,231 (10,433)
Total corporates139,071 (8,040)101,999 (21,272)241,070 (29,312)
Collateralized debt obligations— — — — — — 
Other asset-backed securities— — 13,102 (260)13,102 (260)
Total below investment grade securities139,071 (8,040)115,101 (21,532)254,172 (29,572)
Total fixed maturities
$3,913,063 $(354,151)$272,651 $(54,679)$4,185,714 $(408,830)
 

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.

16
        GL Q1 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)


17
        GL Q1 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
March 31,
20222021
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 March 31, 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:
March 31,
2022		December 31, 2021
Investment funds$732,360 $640,263 
Commercial mortgage loan participations144,074 141,843 
Other13,335 11,819 
Total
$889,769 $793,925 

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

Fair ValueUnfunded Commitments
Investment CategoryMarch 31,
2022		December 31, 2021March 31,
2022		Redemption Term/Notice
Commercial mortgage loans$409,918 $423,776 $254,876 Fully redeemable and non-redeemable with varying terms.
Opportunistic credit173,058 178,215 — 
Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.
Other149,384 38,272 103,264 Fully redeemable with varying terms and non-redeemable.
Total investment funds $732,360 $640,263 $358,140 

The Company had $118 million of capital called during the quarter from existing investment funds, reducing our unfunded commitments. Our unfunded commitments were $358 million as of March 31, 2022.

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        GL Q1 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 March 31, 2022 and December 31, 2021 are as follows:
March 31, 2022December 31, 2021
Carrying Value% of TotalCarrying Value% of Total
Property type:
Mixed use$60,396 42 $57,996 41 
Hospitality23,161 16 23,186 16 
Retail19,860 14 19,811 14 
Industrial17,900 13 17,900 13 
Multi-family14,770 10 14,872 11 
Office8,814 6 8,905 6 
Total recorded investment144,901 101 142,670 101 
Less allowance for credit losses(827)(1)(827)(1)
Carrying value, net of allowance for credit losses
$144,074 100 $141,843 100 


March 31, 2022December 31, 2021
Carrying Value% of TotalCarrying Value% of Total
Geographic location:
California$69,167 48 $67,659 48 
New York18,551 13 18,373 13 
Pennsylvania11,673 8 11,673 8 
Indiana9,717 7 9,717 7 
Florida8,246 6 8,213 6 
Texas5,960 4 5,898 4 
Other21,587 15 21,137 15 
Total recorded investment144,901 101 142,670 101 
Less allowance for credit losses(827)(1)(827)(1)
Carrying value, net of allowance for credit losses
$144,074 100 $141,843 100 
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        GL Q1 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 2020, 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 March 31, 2022
Risk Rating:Number of Loans202220212020201920182017Total
Low14 $— $— $25,045 $12,509 $41,151 $35,851 $114,556 
Moderate 6 — — 1,297 17,434 — — 18,731 
High2 — — — 4,597 7,017 — 11,614 
Total commercial mortgage loans22 $— $— $26,342 $34,540 $48,168 $35,851 144,901 
Less allowance for credit losses on the investment pool(827)
Less allowance for credit losses on individual loans— 
Carrying value, net of valuation allowance
$144,074 

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 March 31, 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 22 loans in the portfolio. For the three months ended March 31, 2022, the allowance for credit losses remained at $827 thousand. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.
Three Months Ended
March 31,
20222021
Allowance for credit losses beginning balance
$827 $3,505 
Provision (reversal) for credit losses— (1,358)
Allowance for credit losses ending balance
$827 $2,147 

20
        GL Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
There were no delinquent commercial mortgage loans as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, the Company had one commercial mortgage loan in non-accrual status, which could result in foreclosure during 2022. The outstanding principal balance of this loan was $4.6 million as of March 31, 2022 and December 31, 2021. The Company's unfunded commitment balance to commercial loan borrowers was $27 million as of March 31, 2022.

Note 5—Commitments and Contingencies

Guarantees: The Parent Company has guaranteed letters of credit in connection with its credit facility with a group of banks. The letters of credit were issued by TMK Re, Ltd., a wholly-owned subsidiary, to secure TMK Re, Ltd.’s obligation for claims on certain policies reinsured by TMK Re, Ltd. that were sold by other Globe Life insurance subsidiaries. These letters of credit facilitate TMK Re, Ltd.’s ability to reinsure the business of Globe Life's insurance carriers. The agreement was amended on September 30, 2021 and now expires in 2026. The maximum amount of letters of credit available is $250 million. The Parent Company would be liable to the extent that TMK Re, Ltd. does not pay the reinsured party. The amount outstanding at March 31, 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, and miscellaneous other causes of action. Based upon information presently available, and in light of legal and other factual defenses available to the Parent Company and its subsidiaries, management does not believe that it is reasonably possible that such litigation will have a material adverse effect on Globe Life's financial condition, future operating results or liquidity; however, assessing the eventual outcome of litigation necessarily involves forward-looking speculation as to judgments to be made by judges, juries and appellate courts in the future. This bespeaks caution, particularly in states with reputations for high punitive damage verdicts. Globe Life's management recognizes that large punitive damage awards bearing little or no relation to actual damages continue to be awarded by juries in jurisdictions in which the Company has substantial business, creating the potential for unpredictable material adverse judgments in any given punitive damage suit.



21
        GL Q1 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 6—Liability for Unpaid Claims

Activity in the liability for unpaid health claims is summarized as follows:
March 31,
2022		December 31,
2021
Balance at beginning of period
$167,832 $162,261 
Incurred related to:
Current year176,953 638,054 
Prior year(12,008)(22,477)
Total incurred164,945 615,577 
Paid related to:
Current year70,775 487,096 
Prior year89,235 122,910 
Total paid160,010 610,006 
Balance at end of period
$172,767 $167,832 

Below is the reconciliation of the liability of "Policy claims and other benefits payable" in the Condensed Consolidated Balance Sheets.
March 31,
2022		December 31,
2021
Policy claims and other benefits payable:
Life insurance$260,786 $245,108 
Health insurance172,767 167,832 
Total$433,553 $412,940 

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        GL Q1 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 March 31, 2022 and December 31, 2021.

Pension Assets by Component at March 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
% to
Total
Corporate bonds:
Financial$— $47,184 $— $47,184 8 
Utilities— 39,148 — 39,148 7 
Energy— 20,916 — 20,916 4 
Other corporates— 79,311 — 79,311 14 
Total corporate bonds— 186,559 — 186,559 33 
Exchange traded fund(1)
300,244 — — 300,244 55 
Other bonds— 223 — 223 — 
Guaranteed annuity contract(2)
— 34,863 — 34,863 6 
Short-term investments12,075 — — 12,075 2 
Other8,192 — — 8,192 1 
$320,511 $221,645 $— 542,156 97 
Other long-term investments(3)
15,545 3 
Total pension assets
$557,701 100 
(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 Non-Exempt Employees Defined Benefit Pension Plan ("American Income Pension Plan").
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns less than 1% of the investment fund. As of March 31, 2022, the expected term of the investment fund is approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.

23
        GL Q1 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
% to
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 Non-Exempt Employees Defined Benefit Pension Plan ("American Income 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.
Three Months Ended
March 31,
20222021
Premiums paid for insurance coverage$443 $443 
March 31,
2022		December 31,
2021
Total investments:
Company owned life insurance $53,572 $52,791 
Exchange traded funds80,685 87,133 
$134,257 $139,924 


24
        GL Q1 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 March 31, 2022 and December 31, 2021.
March 31,
2022		December 31,
2021
Pension Plans$651,861 $686,917 
SERP91,725 92,017 
Pension benefit obligation
$743,586 $778,934 

Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the Pension Plans and SERP by expense components for the three months ended March 31, 2022 and 2021.

Components of Net Periodic Benefit Cost
Three Months Ended
March 31,
 20222021
Service cost$8,655 $7,918 
Interest cost6,123 5,467 
Expected return on assets(8,885)(8,083)
Amortization:
Prior service cost158 158 
Actuarial (gain) loss3,209 4,985 
Net periodic benefit cost
$9,260 $10,445 

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
March 31,
20222021
Basic weighted average shares outstanding99,273,616 103,482,944 
Weighted average dilutive options outstanding976,758 1,354,773 
Diluted weighted average shares outstanding100,250,374 104,837,717 
Antidilutive shares563,991 1,836,559 

Antidilutive shares are excluded from the calculation of diluted earnings per share. 
25
        GL Q1 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

The following table presents information about the terms and outstanding balances of Globe Life's debt.
 
Selected Information about Debt Issues
As of
March 31,
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 $(327)$165,285 $174,991 $165,216 
Senior notes(1)
9/24/20129/15/20223.800%150,000 (161)149,839 151,500 149,752 
Senior notes9/27/20189/15/20284.550%550,000 (4,888)545,112 576,906 544,949 
Senior notes8/21/20208/15/20302.150%400,000 (4,111)395,889 358,344 395,778 
Junior subordinated debentures11/17/201711/17/20575.275%125,000 (1,601)123,399 127,150 123,396 
Junior subordinated debentures6/14/20216/15/20614.250%325,000 (7,827)317,173 288,340 317,155 
1,715,612 (18,915)1,696,697 1,677,231 1,696,246 
Less current maturity of long-term debt(1)
150,000 (161)149,839 151,500 149,752 
Total long-term debt
1,565,612 (18,754)1,546,858 1,525,731 1,546,494 
Current maturity of long-term debt(1)
150,000 (161)149,839 151,500 149,752 
Commercial paper372,524 (284)372,240 372,240 329,892 
Total short-term debt
522,524 (445)522,079 523,740 479,644 
Total debt
$2,088,136 $(19,199)$2,068,937 $2,049,471 $2,026,138 
(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.


The commercial paper has the highest priority of all 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) Funding: 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 4.1% of outstanding borrowings.

Globe Life owns $9.4 million in FHLB common stock as of March 31, 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 and activity is recorded in "Net receipts (payments) from deposit-type products" in the Condensed Consolidated Statement of Cash Flows.

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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
As of March 31, 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 March 31, 2022, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $545 million, based on pledged assets with a fair value of $705 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 tables below present segment premium revenue by each of Globe Life's distribution channels.

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Table of Contents
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 March 31, 2022
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$369,987 49 $28,854 9 $— — $398,841 37 
Direct to Consumer251,126 33 18,756 6 — — 269,882 25 
Liberty National80,719 11 47,186 15 — — 127,905 12 
United American2,059 — 132,664 42 — — 134,723 13 
Family Heritage1,369 — 89,540 28 — — 90,909 8 
Other49,342 7 — — — — 49,342 5 
$754,602 100 $317,000 100 $— — $1,071,602 100 

 Three Months Ended March 31, 2021
 LifeHealthAnnuityTotal
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American Income$334,895 47 $27,351 9 $— — $362,246 36 
Direct to Consumer244,028 35 19,360 7 — — 263,388 26 
Liberty National75,737 11 47,040 16 — — 122,777 12 
United American2,277 — 117,087 40 1 100 119,365 12 
Family Heritage1,118 — 83,335 28 — — 84,453 9 
Other50,064 7 — — — — 50,064 5 
$708,119 100 $294,173 100 $1 100 $1,002,293 100 

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 net policy liabilities (benefit reserves less deferred acquisition costs) is reflected as a component of the Investment segment (rather than as a component of underwriting margin in the insurance and annuity segments) in order to match this cost with the investment income earned on the assets supporting the net policy liabilities.
 
The measure of profitability for the Investment segment is excess investment income, representing the income earned on the investment portfolio in excess of net policy requirements and financing costs associated with Globe Life's debt. Other than the above-mentioned interest allocations, no other intersegment revenues or expenses are recognized. Expenses directly attributable to corporate operations are included in the “Corporate & Other” category. Stock-based compensation expense is considered a corporate expense by Globe Life management and is included in this category. All other unallocated revenues and expenses on a pretax basis, including insurance administrative expense, are also included in the “Corporate & Other” segment category.
 
Globe Life holds a sizable investment portfolio to support its insurance liabilities, the yield from which is used to offset policy benefit, acquisition, administrative and tax expenses. This yield or investment income is taken into account when establishing premium rates and profitability expectations for its insurance products. From time to time, investments are sold or called, or experience a credit loss event, each of which is reflected by the Company as
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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
realized gain (loss)—investments. These gains or losses generally occur as a result of disposition due to issuer calls, compliance with Company investment policies, or other reasons often beyond management’s control. Unlike investment income, realized gains and losses are incidental to insurance operations, and only overall yields are considered when setting premium rates or insurance product profitability expectations. While these gains and losses are not relevant to segment profitability or core operating results, they can have a material positive or negative result on net income. For these reasons, management removes realized investment gains and losses when it views its segment operations.

Management removes items that are related to prior periods when evaluating the operating results of current periods. Management also removes non-operating items unrelated to the Company's core insurance activities when evaluating those results. Therefore, these items are excluded in its presentation of segment results, because accounting guidance requires that operating segment results be presented as management views its business. With the exception of the administrative settlements noted in the paragraphs above, all of these items are included in “Other operating expense” in the Condensed Consolidated Statements of Operations for the appropriate year. See additional detail below in the tables.

The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note—1 Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
Three Months Ended March 31, 2022
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$754,602 $317,000 $— $— $— $— $1,071,602 
Net investment income— — — 243,834 — — 243,834 
Other income— — — — 164 — 164 
Total revenue754,602 317,000 — 243,834 164 — 1,315,600 
Expenses:
Policy obligations549,343 196,855 7,050 — — — 753,248 
Required interest on reserves(189,709)(26,865)(9,672)226,246 — — — 
Required interest on DAC56,232 7,463 53 (63,748)— — — 
Amortization of acquisition costs126,079 31,852 453 — — — 158,384 
Commissions, premium taxes, and non-deferred acquisition costs62,203 28,602 8 — — — 90,813 
Insurance administrative expense(1)
— — — — 72,565 112 (2)72,677 
Parent expense— — — — 2,640 — 2,640 
Stock-based compensation expense— — — — 9,035 — 9,035 
Interest expense— — — 19,944 — — 19,944 
Total expenses604,148 237,907 (2,108)182,442 84,240 112 1,106,741 
Subtotal150,454 79,093 2,108 61,392 (84,076)(112)208,859 
Non-operating items— — — — — 112 (2)112 
Measure of segment profitability (pretax)
$150,454 $79,093 $2,108 $61,392 $(84,076)$— 208,971 
Realized gain (loss)—investments(7,244)
Non-operating expenses(112)
Income before income taxes per Condensed Consolidated Statements of Operations
$201,615 
(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 March 31, 2021
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$708,119 $294,173 $1 $— $— $— $1,002,293 
Net investment income— — — 235,820 — — 235,820 
Other income— — — — 295 — 295 
Total revenue708,119 294,173 1 235,820 295 — 1,238,408 
Expenses:
Policy obligations517,631 187,829 7,259 — — — 712,719 
Required interest on reserves(179,925)(24,995)(10,005)214,925 — — — 
Required interest on DAC53,795 6,962 70 (60,827)— — — 
Amortization of acquisition costs123,304 29,207 482 — — — 152,993 
Commissions, premium taxes, and non-deferred acquisition costs56,668 22,990 8 — — — 79,666 
Insurance administrative expense(1)
— — — — 66,176 4,828 (2)71,004 
Parent expense— — — — 2,318 — 2,318 
Stock-based compensation expense— — — — 7,888 — 7,888 
Interest expense— — — 21,178 — — 21,178 
Total expenses571,473 221,993 (2,186)175,276 76,382 4,828 1,047,766 
Subtotal136,646 72,180 2,187 60,544 (76,087)(4,828)190,642 
Non-operating items— — — — — 4,828 (2)4,828 
Measure of segment profitability (pretax)