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 June 30, 2021March 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”,filer,” “smaller reporting company”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 forof each of the issuer’s classes of common stock, as of the lastlatest practicable date.
Class Outstanding at July 28, 2021April 26, 2022
Common Stock, $1.00 Par Value 101,720,60898,599,602

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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Table of Contents
Page
PART I. FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Balance Sheets
1
Condensed Consolidated Statements of Operations
2
Condensed Consolidated Statements of Comprehensive Income (Loss)
3
Condensed Consolidated Statements of Shareholders' Equity
4
Condensed Consolidated Statements of Cash Flows
65
76
Note 1—Significant Accounting Policies
76
Note 2—New Accounting Standards
87
Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income
98
Note 4—Investments
1110
Note 5—Commitments and Contingencies
2221
Note 6—Liability for Unpaid Claims
2322
Note 7—Postretirement Benefits
2423
Note 8—Earnings Per Share
2625
Note 9—Debt
2726
Note 10—Business Segments
2827
Note 11—Subsequent Events
33
3431
Item 2.
3532
Item 3.
6462
Item 4.
6462
PART II. OTHER INFORMATION
Item 1.
6462
Item 1A.
6563
Item 2.
6563
Item 6.
6664
6765








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)
June 30,
2021		December 31, 2020March 31,
2022		December 31, 2021
Assets:Assets:Assets:
Investments:Investments:Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2021—$17,451,918;
2020—$17,197,145, allowance for credit losses: 2021— $0; 2020— $3,346)
$21,101,780 $21,213,509 
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)
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 loansPolicy loans583,088 584,379 Policy loans591,958 589,634 
Other long-term investments (includes: 2021—$533,658; 2020—$385,038 under the fair value option)698,188 546,981 
Other long-term investments (includes: 2022—$732,360; 2021—$640,263 under the fair value option)Other long-term investments (includes: 2022—$732,360; 2021—$640,263 under the fair value option)889,769 793,925 
Short-term investmentsShort-term investments371,922 107,782 Short-term investments57,344 69,145 
Total investmentsTotal investments22,754,978 22,452,651 Total investments20,718,178 22,757,991 
CashCash138,072 94,847 Cash127,628 92,163 
Accrued investment incomeAccrued investment income254,587 248,991 Accrued investment income269,975 251,307 
Other receivablesOther receivables484,392 474,180 Other receivables487,929 487,443 
Deferred acquisition costsDeferred acquisition costs4,743,032 4,595,444 Deferred acquisition costs4,999,935 4,914,728 
GoodwillGoodwill441,591 441,591 Goodwill481,791 481,791 
Other assetsOther assets763,405 739,027 Other assets764,892 782,625 
Total assetsTotal assets$29,580,057 $29,046,731 Total assets$27,850,328 $29,768,048 
Liabilities:Liabilities:Liabilities:
Future policy benefitsFuture policy benefits$15,642,106 $15,243,536 Future policy benefits$16,229,940 $16,034,727 
Unearned and advance premiumUnearned and advance premium70,550 61,728 Unearned and advance premium70,889 65,472 
Policy claims and other benefits payablePolicy claims and other benefits payable375,823 399,507 Policy claims and other benefits payable433,553 412,940 
Other policyholders' fundsOther policyholders' funds98,316 97,968 Other policyholders' funds99,606 98,935 
Total policy liabilitiesTotal policy liabilities16,186,795 15,802,739 Total policy liabilities16,833,988 16,612,074 
Current and deferred income taxesCurrent and deferred income taxes1,773,524 1,833,723 Current and deferred income taxes1,298,911 1,765,021 
Short-term debtShort-term debt259,946 254,918 Short-term debt522,079 479,644 
Long-term debt (estimated fair value: 2021—$2,164,430; 2020—$1,871,754)1,986,116 1,667,886 
Long-term debt (estimated fair value: 2022—$1,525,731; 2021—$1,667,009)Long-term debt (estimated fair value: 2022—$1,525,731; 2021—$1,667,009)1,546,858 1,546,494 
Other liabilitiesOther liabilities756,754 716,373 Other liabilities754,472 722,009 
Total liabilitiesTotal liabilities20,963,135 20,275,639 Total liabilities20,956,308 21,125,242 
Commitments and Contingencies (Note 5)Commitments and Contingencies (Note 5)00Commitments and Contingencies (Note 5)00
Shareholders' equity:Shareholders' equity:Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2021 and 20200 0 
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2021—113,218,183 issued; 2020—113,218,183 issued)113,218 113,218 
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2022 and 2021Preferred 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)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-capitalAdditional paid-in-capital524,647 527,435 Additional paid-in-capital523,068 520,564 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)2,750,279 3,029,244 Accumulated other comprehensive income (loss)869,495 2,677,583 
Retained earningsRetained earnings6,185,966 5,874,109 Retained earnings6,315,609 6,182,100 
Treasury stock, at cost: (2021—11,055,223 shares; 2020—9,420,699 shares)(957,188)(772,914)
Treasury stock, at cost: (2022—10,343,676 shares; 2021—9,650,845 shares)Treasury stock, at cost: (2022—10,343,676 shares; 2021—9,650,845 shares)(923,370)(846,659)
Total shareholders' equityTotal shareholders' equity8,616,922 8,771,092 Total shareholders' equity6,894,020 8,642,806 
Total liabilities and shareholders' equityTotal liabilities and shareholders' equity$29,580,057 $29,046,731 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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Revenue:Revenue:Revenue:
Life premiumLife premium$728,170 $670,822 $1,436,289 $1,320,452 Life premium$754,602 $708,119 
Health premiumHealth premium295,586 282,877 589,759 563,082 Health premium317,000 294,173 
Other premiumOther premium0 3 1 3 Other premium— 1 
Total premiumTotal premium1,023,756 953,702 2,026,049 1,883,537 Total premium1,071,602 1,002,293 
Net investment incomeNet investment income238,308 231,568 474,128 460,559 Net investment income243,834 235,820 
Realized gains (losses)Realized gains (losses)8,659 (4,790)36,811 (30,887)Realized gains (losses)(7,244)28,152 
Other incomeOther income388 404 683 729 Other income164 295 
Total revenueTotal revenue1,271,111 1,180,884 2,537,671 2,313,938 Total revenue1,308,356 1,266,560 
Benefits and expenses:Benefits and expenses:Benefits and expenses:
Life policyholder benefitsLife policyholder benefits498,471 459,845 1,016,102 881,515 Life policyholder benefits549,343 517,631 
Health policyholder benefitsHealth policyholder benefits188,854 183,496 376,683 362,207 Health policyholder benefits196,855 187,829 
Other policyholder benefitsOther policyholder benefits7,286 7,475 14,545 15,063 Other policyholder benefits7,050 7,259 
Total policyholder benefitsTotal policyholder benefits694,611 650,816 1,407,330 1,258,785 Total policyholder benefits753,248 712,719 
Amortization of deferred acquisition costsAmortization of deferred acquisition costs148,021 146,160 301,014 289,997 Amortization of deferred acquisition costs158,384 152,993 
Commissions, premium taxes, and non-deferred acquisition costsCommissions, premium taxes, and non-deferred acquisition costs82,312 76,140 161,978 155,077 Commissions, premium taxes, and non-deferred acquisition costs90,813 79,666 
Other operating expenseOther operating expense79,155 72,714 160,365 151,296 Other operating expense84,352 81,210 
Interest expenseInterest expense21,769 22,813 42,947 43,621 Interest expense19,944 21,178 
Total benefits and expensesTotal benefits and expenses1,025,868 968,643 2,073,634 1,898,776 Total benefits and expenses1,106,741 1,047,766 
Income before income taxesIncome before income taxes245,243 212,241 464,037 415,162 Income before income taxes201,615 218,794 
Income tax benefit (expense)Income tax benefit (expense)(45,625)(39,193)(85,902)(76,574)Income tax benefit (expense)(37,254)(40,277)
Net income
Net income
$199,618 $173,048 $378,135 $338,588 
Net income
$164,361 $178,517 
Basic net income per common share
Basic net income per common share
$1.94 $1.63 $3.66 $3.17 
Basic net income per common share
$1.66 $1.73 
Diluted net income per common share
Diluted net income per common share
$1.92 $1.62 $3.62 $3.13 
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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Net income
Net income
$199,618 $173,048 $378,135 $338,588 
Net income
$164,361 $178,517 
Other comprehensive income (loss):Other comprehensive income (loss):Other comprehensive income (loss):
Investments:Investments:Investments:
Unrealized gains (losses) on fixed maturities:Unrealized gains (losses) on fixed maturities:Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during periodUnrealized holding gains (losses) arising during period904,048 1,459,508 (358,011)481,572 Unrealized holding gains (losses) arising during period(2,292,922)(1,262,059)
Provision for credit lossesProvision for credit losses00
Other reclassification adjustments included in net incomeOther reclassification adjustments included in net income645 (3,190)(16,497)25,222 Other reclassification adjustments included in net income(4,030)(17,142)
Foreign exchange adjustment on fixed maturities recorded at fair valueForeign exchange adjustment on fixed maturities recorded at fair value2,218 233 4,660 (2,164)Foreign exchange adjustment on fixed maturities recorded at fair value284 2,442 
Unrealized gains (losses) on fixed maturities906,911 1,456,551 (369,848)504,630 
Unrealized gains (losses) on other investments0 (2,540)0 (13,260)
Total unrealized investment gains (losses)Total unrealized investment gains (losses)906,911 1,454,011 (369,848)491,370 Total unrealized investment gains (losses)(2,296,668)(1,276,759)
Less applicable tax (expense) benefitLess applicable tax (expense) benefit(190,452)(305,338)77,667 (103,188)Less applicable tax (expense) benefit482,299 268,119 
Unrealized gains (losses) on investments, net of taxUnrealized gains (losses) on investments, net of tax716,459 1,148,673 (292,181)388,182 Unrealized gains (losses) on investments, net of tax(1,814,369)(1,008,640)
Deferred acquisition costs:Deferred acquisition costs:Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costsUnrealized gains (losses) attributable to deferred acquisition costs408 382 767 765 Unrealized gains (losses) attributable to deferred acquisition costs376 359 
Less applicable tax (expense) benefitLess applicable tax (expense) benefit(86)(81)(161)(161)Less applicable tax (expense) benefit(79)(75)
Unrealized gains (losses) attributable to deferred acquisition costs, net of taxUnrealized gains (losses) attributable to deferred acquisition costs, net of tax322 301 606 604 Unrealized gains (losses) attributable to deferred acquisition costs, net of tax297 284 
Foreign exchange translation:Foreign exchange translation:Foreign exchange translation:
Foreign exchange translation adjustments, other than securitiesForeign exchange translation adjustments, other than securities6,173 16,947 5,563 (10,495)Foreign exchange translation adjustments, other than securities4,138 (610)
Less applicable tax (expense) benefitLess applicable tax (expense) benefit(1,296)(3,560)(1,168)2,203 Less applicable tax (expense) benefit(869)128 
Foreign exchange translation adjustments, other than securities, net of taxForeign exchange translation adjustments, other than securities, net of tax4,877 13,387 4,395 (8,292)Foreign exchange translation adjustments, other than securities, net of tax3,269 (482)
Pension:Pension:Pension:
Pension adjustmentsPension adjustments5,200 4,158 10,400 8,315 Pension adjustments3,437 5,200 
Less applicable tax (expense) benefitLess applicable tax (expense) benefit(1,094)(873)(2,185)(1,746)Less applicable tax (expense) benefit(722)(1,091)
Pension adjustments, net of taxPension adjustments, net of tax4,106 3,285 8,215 6,569 Pension adjustments, net of tax2,715 4,109 
Other comprehensive income (loss)Other comprehensive income (loss)725,764 1,165,646 (278,965)387,063 Other comprehensive income (loss)(1,808,088)(1,004,729)
Comprehensive income (loss)
Comprehensive income (loss)
$925,382 $1,338,694 $99,170 $725,651 
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, 2020
$0 $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
0 113,218 516,013 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
$0 $113,218 $524,647 $2,750,279 $6,185,966 $(957,188)$8,616,922 




















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' EquityPreferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Shareholders' Equity
Balance at December 31, 2021
Balance at December 31, 2021
$— $109,218 $520,564 $2,677,583 $6,182,100 $(846,659)$8,642,806 
Balance at December 31, 2019
$0 $117,218 $531,554 $1,844,830 $5,551,329 $(750,624)$7,294,307 
Cumulative effect of change in accounting principles, net of tax(1)
— — — — (454)— (454)
Balance at January 1, 2020
0 117,218 531,554 1,844,830 5,550,875 (750,624)7,293,853 
Comprehensive income (loss)Comprehensive income (loss)— — — (778,583)165,540 — (613,043)Comprehensive income (loss)— — — (1,808,088)164,361 — (1,643,727)
Common dividends declared
($0.1875 per share)
— — — — (19,963)— (19,963)
Common dividends declared
($0.2075 per share)
Common dividends declared
($0.2075 per share)
— — — — (20,543)— (20,543)
Acquisition of treasury stockAcquisition of treasury stock— — — — — (166,729)(166,729)Acquisition of treasury stock— — — — — (119,482)(119,482)
Stock-based compensationStock-based compensation— — (12,126)— (482)21,964 9,356 Stock-based compensation— — 2,504 — (345)6,876 9,035 
Exercise of stock optionsExercise of stock options— — — — (9,539)26,347 16,808 Exercise of stock options— — — — (9,964)35,895 25,931 
Balance at March 31, 2020
0 117,218 519,428 1,066,247 5,686,431 (869,042)6,520,282 
Comprehensive income (loss)— — — 1,165,646 173,048 — 1,338,694 
Common dividends declared
($0.1875 per share)
— — — — (19,956)— (19,956)
Stock-based compensation— — 8,632 — — — 8,632 
Exercise of stock options— — — — (593)1,310 717 
Balance at June 30, 2020
$0 $117,218 $528,060 $2,231,893 $5,838,930 $(867,732)$7,848,369 
Balance at March 31, 2022
Balance at March 31, 2022
$— $109,218 $523,068 $869,495 $6,315,609 $(923,370)$6,894,020 
(1)Adoption of Accounting Standard Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2020.


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)
Six Months Ended
June 30,		Three Months Ended
March 31,
2021202020222021
Cash provided from (used for) operating activities
Cash provided from (used for) operating activities
$702,039 $769,302 
Cash provided from (used for) operating activities
$397,133 $371,830 
Cash provided from (used for) investing activities:Cash provided from (used for) investing activities:Cash provided from (used for) investing activities:
Investments sold or matured:Investments sold or matured:Investments sold or matured:
Fixed maturities available for sale—soldFixed maturities available for sale—sold74,710 52,020 Fixed maturities available for sale—sold75,116 61,858 
Fixed maturities available for sale—matured or other redemptionsFixed maturities available for sale—matured or other redemptions108,815 218,022 Fixed maturities available for sale—matured or other redemptions115,160 36,683 
Other long-term investmentsOther long-term investments4,490 29,058 Other long-term investments20,929 3,733 
Total investments sold or maturedTotal investments sold or matured188,015 299,100 Total investments sold or matured211,205 102,274 
Acquisition of investments:Acquisition of investments:Acquisition of investments:
Fixed maturities—available for saleFixed maturities—available for sale(415,134)(562,875)Fixed maturities—available for sale(339,145)(295,869)
Other long-term investmentsOther long-term investments(141,975)(156,291)Other long-term investments(122,010)(65,997)
Total investments acquiredTotal investments acquired(557,109)(719,166)Total investments acquired(461,155)(361,866)
Net (increase) decrease in policy loansNet (increase) decrease in policy loans1,291 (4,049)Net (increase) decrease in policy loans(2,324)82 
Net (increase) decrease in short-term investmentsNet (increase) decrease in short-term investments(264,140)(493,366)Net (increase) decrease in short-term investments11,801 14,434 
Additions to propertiesAdditions to properties(23,727)(20,145)Additions to properties(6,981)(15,529)
Other investing activities0 18 
Investments in low-income housing interestsInvestments in low-income housing interests(19,732)(23,049)Investments in low-income housing interests(27,870)(9,080)
Cash provided from (used for) investing activities
Cash provided from (used for) investing activities
(675,402)(960,657)
Cash provided from (used for) investing activities
(275,324)(269,685)
Cash provided from (used for) financing activities:Cash provided from (used for) financing activities:Cash provided from (used for) financing activities:
Issuance of common stockIssuance of common stock66,328 17,525 Issuance of common stock25,931 32,724 
Cash dividends paid to shareholdersCash dividends paid to shareholders(39,891)(38,541)Cash dividends paid to shareholders(19,687)(19,511)
Repayment of debt0 (4,375)
Proceeds from issuance of debt325,000 300,000 
Payment for debt issuance costs(7,639)(891)
Net borrowing (repayment) of commercial paperNet borrowing (repayment) of commercial paper5,028 159,920 Net borrowing (repayment) of commercial paper42,348 20,001 
Acquisition of treasury stockAcquisition of treasury stock(295,584)(166,729)Acquisition of treasury stock(119,482)(132,720)
Net receipts (payments) from deposit-type productsNet receipts (payments) from deposit-type products(30,736)(44,873)Net receipts (payments) from deposit-type products(13,810)(13,811)
Cash provided from (used for) financing activities
Cash provided from (used for) financing activities
22,506 222,036 
Cash provided from (used for) financing activities
(84,700)(113,317)
Effect of foreign exchange rate changes on cashEffect of foreign exchange rate changes on cash(5,918)7,417 Effect of foreign exchange rate changes on cash(1,644)(2,171)
Net increase (decrease) in cashNet increase (decrease) in cash43,225 38,098 Net increase (decrease) in cash35,465 (13,343)
Cash at beginning of yearCash at beginning of year94,847 75,933 Cash at beginning of year92,163 94,847 
Cash at end of periodCash at end of period$138,072 $114,031 Cash at end of period$127,628 $81,504 









See accompanying Notes to Condensed Consolidated Financial Statements.

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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 4 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 June 30, 2021,March 31, 2022, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended June 30, 2021March 31, 2022 and 2020.2021. 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 25, 2021.24, 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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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Note 2—New Accounting Standards

Accounting Pronouncements Adopted in the Current Year
StandardDescriptionEffective DateEffect on the Consolidated Financial Statements
ASU No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs
The standard was issued as an amendment to ASU 2017-08, and clarifies that callable debt securities with a premium should be amortized to the next call date.This standard became effective on January 1, 2021.The adoption of this standard did not have a material impact on the consolidated financial statements.

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 is currently indoes not expect to early adopt ASU 2018-12 and has selected a modified retrospective transition method upon adoption as of the processtransition date of evaluating the impact this standard will have on the consolidated financial statements and disclosures, specifically assessing key accounting policies, assumption and data inputs, controls, and enhanced system solutions.January 1, 2021.

As of the balance sheet date, the Company is continuing to upgrade its valuation systems as part of its implementation plan. In addition, significant progress has been made allowing the Company to execute parallel valuation runs on major blocks of business and is updating its accounting policies. Due to the overall nature of thethis standard, the impact on the consolidated financial statements is expected to be significant. At this time,the transition date, the Company does not haveexpects a significant decrease in accumulated other comprehensive income due to the requirement to re-measure policy liabilities using an estimateinterest 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 impact.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 does not expect to early adoptanticipates providing quantitative estimates of the impact of adoption of the ASU later this ASUyear once we have properly tested our models and has selected a modified retrospective transition method.assumptions and determined the appropriate discount rates.
 


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 six month periods ended June 30, 2021March 31, 2022 and 2020:2021:
 Three Months Ended June 30, 2021
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at April 1, 2021
$2,166,932 $(4,420)$22,820 $(160,817)$2,024,515 
Other comprehensive income (loss) before reclassifications, net of tax715,949 322 4,877 0 721,148 
Reclassifications, net of tax510 0 0 4,106 4,616 
Other comprehensive income (loss)716,459 322 4,877 4,106 725,764 
Balance at June 30, 2021
$2,883,391 $(4,098)$27,697 $(156,711)$2,750,279 
 Three Months Ended June 30, 2020
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at April 1, 2020
$1,222,159 $(5,613)$(9,621)$(140,678)$1,066,247 
Other comprehensive income (loss) before reclassifications, net of tax1,151,193 301 13,387 0 1,164,881 
Reclassifications, net of tax(2,520)0 0 3,285 765 
Other comprehensive income (loss)1,148,673 301 13,387 3,285 1,165,646 
Balance at June 30, 2020
$2,370,832 $(5,312)$3,766 $(137,393)$2,231,893 
Six Months Ended June 30, 2021 Three Months Ended March 31, 2022
Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total 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 
Balance at January 1, 2022
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 taxOther comprehensive income (loss) before reclassifications, net of tax(279,148)606 4,395 0 (274,147)Other comprehensive income (loss) before reclassifications, net of tax(1,811,185)297 3,269 — (1,807,619)
Reclassifications, net of taxReclassifications, net of tax(13,033)0 0 8,215 (4,818)Reclassifications, net of tax(3,184)— — 2,715 (469)
Other comprehensive income (loss)Other comprehensive income (loss)(292,181)606 4,395 8,215 (278,965)Other comprehensive income (loss)(1,814,369)297 3,269 2,715 (1,808,088)
Balance at June 30, 2021
$2,883,391 $(4,098)$27,697 $(156,711)$2,750,279 
Balance at March 31, 2022
Balance at March 31, 2022
$950,921 $(3,121)$22,656 $(100,961)$869,495 
 Six Months Ended June 30, 2020
 Available
for Sale
Assets		Deferred
Acquisition
Costs		Foreign
Exchange		Pension
Adjustments		Total
Balance at January 1, 2020
$1,982,650 $(5,916)$12,058 $(143,962)$1,844,830 
Other comprehensive income (loss) before reclassifications, net of tax368,257 604 (8,292)0 360,569 
Reclassifications, net of tax19,925 0 0 6,569 26,494 
Other comprehensive income (loss)388,182 604 (8,292)6,569 387,063 
Balance at June 30, 2020
$2,370,832 $(5,312)$3,766 $(137,393)$2,231,893 


 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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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Reclassification adjustmentsAdjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are presented below for the three and six month periods ended June 30, 2021March 31, 2022 and 2020.2021.
Three Months Ended
June 30,		Six Months Ended June 30,Affected line items in the Statement of Operations Three Months Ended March 31,Affected line items in the Statement of Operations
Component Line ItemComponent Line Item2021202020212020Component Line Item20222021
Unrealized investment (gains) losses on available for sale assets:Unrealized investment (gains) losses on available for sale assets:Unrealized investment (gains) losses on available for sale assets:
Realized (gains) lossesRealized (gains) losses$(866)$(5,063)$(19,656)$21,857 Realized (gains) lossesRealized (gains) losses$(4,937)$(18,790)Realized (gains) losses
Amortization of (discount) premiumAmortization of (discount) premium1,511 1,873 3,159 3,365 Net investment incomeAmortization of (discount) premium907 1,648 Net investment income
Total before taxTotal before tax645 (3,190)(16,497)25,222 Total before tax(4,030)(17,142)
TaxTax(135)670 3,464 (5,297)Income taxesTax846 3,600 Income taxes
Total after-taxTotal after-tax510 (2,520)(13,033)19,925 Total after-tax(3,184)(13,542)
Pension adjustments:Pension adjustments:Pension adjustments:
Amortization of prior service costAmortization of prior service cost158 158 316 316 Other operating expenseAmortization of prior service cost158 158 Other operating expense
Amortization of actuarial (gain) lossAmortization of actuarial (gain) loss5,042 4,000 10,084 7,999 Other operating expenseAmortization of actuarial (gain) loss3,279 5,042 Other operating expense
Total before taxTotal before tax5,200 4,158 10,400 8,315 Total before tax3,437 5,200 
TaxTax(1,094)(873)(2,185)(1,746)Income taxesTax(722)(1,091)Income taxes
Total after-taxTotal after-tax4,106 3,285 8,215 6,569 Total after-tax2,715 4,109 
Total reclassification (after-tax)
Total reclassification (after-tax)
$4,616 $765 $(4,818)$26,494 
Total reclassification (after-tax)
$(469)$(9,433)

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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 June 30, 2021March 31, 2022 and December 31, 2020,2021, 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".sector."
At June 30, 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$377,327 $0 $69,245 $(128)$446,444 2 
States, municipalities, and political subdivisions1,904,617 0 242,686 (696)2,146,607 10 
Foreign governments62,027 0 1,835 (3,707)60,155 0 
Corporates, by sector:
Financial4,522,818 0 933,508 (13,620)5,442,706 26 
Utilities1,959,373 0 529,966 (902)2,488,437 12 
Energy1,629,246 0 364,800 (1,852)1,992,194 9 
Other corporate sectors6,839,315 0 1,507,500 (11,254)8,335,561 40 
Total corporates14,950,752 0 3,335,774 (27,628)18,258,898 87 
Collateralized debt obligations36,288 0 28,119 0 64,407 0 
Other asset-backed securities120,907 0 5,209 (847)125,269 1 
Total fixed maturities
$17,451,918 $0 $3,682,868 $(33,006)$21,101,780 100 

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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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
At December 31, 2020At December 31, 2021
Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
 Value(1)
% of Total
Fixed
Maturities(2)
Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
 Value(1)
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:Fixed maturities available for sale:Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprisesU.S. Government direct, guaranteed, and government-sponsored enterprises$380,602 $0 $87,272 $(43)$467,831 2 U.S. Government direct, guaranteed, and government-sponsored enterprises$383,083 $— $64,513 $(164)$447,432 2 
States, municipalities, and political subdivisionsStates, municipalities, and political subdivisions1,880,607 0 251,291 (315)2,131,583 10 States, municipalities, and political subdivisions2,252,997 — 239,135 (2,907)2,489,225 12 
Foreign governmentsForeign governments52,913 0 2,635 (898)54,650 0 Foreign governments59,861 — 900 (5,132)55,629 — 
Corporates, by sector:Corporates, by sector:Corporates, by sector:
FinancialFinancial4,404,203 0 1,016,813 (24,221)5,396,795 26 Financial4,569,160 (387)907,741 (9,349)5,467,165 26 
UtilitiesUtilities1,975,460 0 608,595 (108)2,583,947 12 Utilities1,931,391 — 490,119 (1,012)2,420,498 11 
EnergyEnergy1,623,970 (3,346)346,197 (3,083)1,963,738 9 Energy1,587,892 — 346,780 (1,683)1,932,989 9 
Other corporate sectorsOther corporate sectors6,687,644 0 1,727,366 (6,218)8,408,792 40 Other corporate sectors6,879,459 — 1,454,464 (13,362)8,320,561 39 
Total corporatesTotal corporates14,691,277 (3,346)3,698,971 (33,630)18,353,272 87 Total corporates14,967,902 (387)3,199,104 (25,406)18,141,213 85 
Collateralized debt obligationsCollateralized debt obligations57,007 0 23,460 (8,869)71,598 0 Collateralized debt obligations36,468 — 27,037 — 63,505 — 
Other asset-backed securitiesOther asset-backed securities134,739 0 3,614 (3,778)134,575 1 Other asset-backed securities104,998 — 3,715 (430)108,283 1 
Total fixed maturities
Total fixed maturities
$17,197,145 $(3,346)$4,067,243 $(47,533)$21,213,509 100 
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 June 30, 2021March 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 June 30, 2021At March 31, 2022
Amortized
Cost, net		Fair
Value		Amortized
Cost, net		Fair
Value
Fixed maturities available for sale:Fixed maturities available for sale:Fixed maturities available for sale:
Due in one year or lessDue in one year or less$96,034 $97,942 Due in one year or less$112,714 $114,802 
Due after one year through five yearsDue after one year through five years774,012 858,646 Due after one year through five years989,010 1,050,870 
Due after five years through ten yearsDue after five years through ten years1,963,341 2,348,161 Due after five years through ten years1,723,492 1,902,841 
Due after ten years through twenty yearsDue after ten years through twenty years6,485,804 8,277,620 Due after ten years through twenty years7,046,768 7,962,921 
Due after twenty yearsDue after twenty years7,975,330 9,329,517 Due after twenty years7,965,869 7,987,219 
Mortgage-backed and asset-backed securitiesMortgage-backed and asset-backed securities157,397 189,894 Mortgage-backed and asset-backed securities137,557 160,454 
$17,451,918 $21,101,780 $17,975,410 $19,179,107 


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Analysis of Investment Operations: "Net investment income" for the three and six month periods ended June 30,March 31, 2022 and 2021 and 2020 is summarized as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
20212020% Change20212020% Change20222021% Change
Fixed maturities available for saleFixed maturities available for sale$223,278 $217,556 3 $444,997 $434,683 2 Fixed maturities available for sale$225,284 $221,719 2 
Policy loansPolicy loans11,324 11,213 1 22,592 22,331 1 Policy loans11,428 11,268 1 
Other long-term investments(1)
Other long-term investments(1)
8,880 7,146 24 17,042 11,769 45 
Other long-term investments(1)
12,713 8,162 56 
Short-term investmentsShort-term investments6 134 (96)10 441 (98)Short-term investments2 4 (50)
243,488 236,049 3 484,641 469,224 3 249,427 241,153 3 
Less investment expenseLess investment expense(5,180)(4,481)16 (10,513)(8,665)21 Less investment expense(5,593)(5,333)5 
Net investment income
Net investment income
$238,308 $231,568 3 $474,128 $460,559 3 
Net investment income
$243,834 $235,820 3 
(1)For the three months ended June 30,March 31, 2022 and 2021, and 2020, the investment funds, accounted for under the fair value option method, recorded $6.5$10.7 million and $4.5 million of distributions, respectively in net investment income. For the six months ended June 30, 2021 and 2020, the investment funds, accounted for under the fair value option method, recorded $12.3 million and $6.5$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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Fixed maturities available for sale:Fixed maturities available for sale:Fixed maturities available for sale:
Proceeds from sales(1)
Proceeds from sales(1)
$12,852 $1,660 $74,710 $52,020 
Proceeds from sales(1)
$75,116 $61,858 
Gross realized gainsGross realized gains0 0 1,134 2,642 Gross realized gains773 1,134 
Gross realized lossesGross realized losses(82)(371)(12,101)(371)Gross realized losses(3,679)(12,019)
(1)There were no unsettled sales in the periods ended June 30, 2021March 31, 2022 and 2020.2021.


An analysis of "Realized gains (losses)" is as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Realized investment gains (losses):Realized investment gains (losses):Realized investment gains (losses):
Fixed maturities available for sale:Fixed maturities available for sale:Fixed maturities available for sale:
Sales and other(1)
Sales and other(1)
$865 $5,928 $16,309 $10,862 
Sales and other(1)
$4,549 $15,444 
Provision for credit lossesProvision for credit losses0 (865)3,346 (32,719)Provision for credit losses387 3,346 
Fair value option—change in fair valueFair value option—change in fair value2,543 (19,434)12,428 (18,851)Fair value option—change in fair value(5,338)9,885 
Other investmentsOther investments5,251 9,581 4,728 9,821 Other investments(6,842)(523)
Realized gains (losses) from investments
Realized gains (losses) from investments
8,659 (4,790)36,811 (30,887)
Realized gains (losses) from investments
(7,244)28,152 
Applicable taxApplicable tax(1,818)1,006 (7,730)6,486 Applicable tax1,521 (5,912)
Realized gains (losses), net of tax
Realized gains (losses), net of tax
$6,841 $(3,784)$29,081 $(24,401)
Realized gains (losses), net of tax
$(5,723)$22,240 
(1)During the three months ended June 30,March 31, 2022 and 2021, and 2020, the Company recorded $22.4 million$0 and $80.4$85.8 million of exchanges of fixed maturities (noncash transactions) that resulted in $0 and $7.9 million, respectively in realized gains (losses). During the six months ended June 30, 2021 and 2020, the Company recorded $108.3 million and $86.3 million of exchanges of fixed maturities (noncash transactions) that resulted in $25.2 million and $7.9 million, respectively in realized gains (losses).


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 June 30, 2021March 31, 2022 and December 31, 2020:2021:
Fair Value Measurement at June 30, 2021 Using: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		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 saleFixed maturities available for saleFixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprisesU.S. Government direct, guaranteed, and government-sponsored enterprises$0 $446,444 $0 $446,444 U.S. Government direct, guaranteed, and government-sponsored enterprises$— $401,730 $— $401,730 
States, municipalities, and political subdivisionsStates, municipalities, and political subdivisions0 2,146,607 0 2,146,607 States, municipalities, and political subdivisions— 2,309,736 — 2,309,736 
Foreign governmentsForeign governments0 60,155 0 60,155 Foreign governments— 53,030 — 53,030 
Corporates, by sector:Corporates, by sector:Corporates, by sector:
FinancialFinancial0 5,268,630 174,076 5,442,706 Financial— 4,835,986 156,353 4,992,339 
UtilitiesUtilities0 2,331,689 156,748 2,488,437 Utilities— 2,027,154 127,368 2,154,522 
EnergyEnergy0 1,953,907 38,287 1,992,194 Energy— 1,732,407 13,141 1,745,548 
Other corporate sectorsOther corporate sectors0 8,025,927 309,634 8,335,561 Other corporate sectors— 7,072,767 289,108 7,361,875 
Total corporatesTotal corporates0 17,580,153 678,745 18,258,898 Total corporates— 15,668,314 585,970 16,254,284 
Collateralized debt obligationsCollateralized debt obligations0 0 64,407 64,407 Collateralized debt obligations— — 59,538 59,538 
Other asset-backed securitiesOther asset-backed securities0 125,269 0 125,269 Other asset-backed securities— 100,789 — 100,789 
Total fixed maturities
Total fixed maturities
$0 $20,358,628 $743,152 $21,101,780 
Total fixed maturities
$— $18,533,599 $645,508 $19,179,107 
Percentage of totalPercentage of total0 %96 %4 %100 %Percentage of total— %97 %3 %100 %

Fair Value Measurement at December 31, 2020 Using: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		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 saleFixed maturities available for saleFixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprisesU.S. Government direct, guaranteed, and government-sponsored enterprises$0 $467,831 $0 $467,831 U.S. Government direct, guaranteed, and government-sponsored enterprises$— $447,432 $— $447,432 
States, municipalities, and political subdivisionsStates, municipalities, and political subdivisions0 2,131,583 0 2,131,583 States, municipalities, and political subdivisions— 2,489,225 — 2,489,225 
Foreign governmentsForeign governments0 54,650 0 54,650 Foreign governments— 55,629 — 55,629 
Corporates, by sector:Corporates, by sector:Corporates, by sector:
FinancialFinancial0 5,222,066 174,729 5,396,795 Financial— 5,303,547 163,618 5,467,165 
UtilitiesUtilities0 2,400,602 183,345 2,583,947 Utilities— 2,266,231 154,267 2,420,498 
EnergyEnergy0 1,925,549 38,189 1,963,738 Energy— 1,919,416 13,573 1,932,989 
Other corporate sectorsOther corporate sectors0 8,090,550 318,242 8,408,792 Other corporate sectors— 8,010,331 310,230 8,320,561 
Total corporatesTotal corporates0 17,638,767 714,505 18,353,272 Total corporates— 17,499,525 641,688 18,141,213 
Collateralized debt obligationsCollateralized debt obligations0 0 71,598 71,598 Collateralized debt obligations— — 63,505 63,505 
Other asset-backed securitiesOther asset-backed securities0 121,705 12,870 134,575 Other asset-backed securities— 108,283 — 108,283 
Total fixed maturities
Total fixed maturities
$0 $20,414,536 $798,973 $21,213,509 
Total fixed maturities
$— $20,600,094 $705,193 $21,305,287 
Percentage of totalPercentage of total0 %96 %4 %100 %Percentage of total— %97 %3 %100 %


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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)Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Balance at January 1, 2021
$12,870 $71,598 $714,505 $798,973 
Balance at January 1, 2022
Balance at January 1, 2022
$— $63,505 $641,688 $705,193 
Included in realized gains / lossesIncluded in realized gains / losses(82)(6,787)840 (6,029)Included in realized gains / losses— — — — 
Included in other comprehensive incomeIncluded in other comprehensive income63 13,528 (12,489)1,102 Included in other comprehensive income— (3,809)(36,360)(40,169)
AcquisitionsAcquisitions0 0 0 0 Acquisitions— — — — 
SalesSales(12,851)(13,213)0 (26,064)Sales— — — — 
AmortizationAmortization0 2,270 4 2,274 Amortization— 1,123 1 1,124 
Other(1)
Other(1)
0 (2,989)(24,115)(27,104)
Other(1)
— (1,281)(19,359)(20,640)
Transfers into Level 3(2)
Transfers into Level 3(2)
0 0 0 0 
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
Transfers out of Level 3(2)
0 0 0 0 
Transfers out of Level 3(2)
— — — — 
Balance at June 30, 2021
$0 $64,407 $678,745 $743,152 
Balance at March 31, 2022
Balance at March 31, 2022
$— $59,538 $585,970 $645,508 
Percent of total fixed maturitiesPercent of total fixed maturities0 %1 %3 %4 %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)Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Balance at January 1, 2020
$13,177 $74,104 $672,128 $759,409 
Balance at January 1, 2021
Balance at January 1, 2021
$12,870 $71,598 $714,505 $798,973 
Included in realized gains / lossesIncluded in realized gains / losses0 0 1,213 1,213 Included in realized gains / losses— (6,787)— (6,787)
Included in other comprehensive incomeIncluded in other comprehensive income(250)(5,046)11,765 6,469 Included in other comprehensive income(1,261)9,900 (24,135)(15,496)
AcquisitionsAcquisitions0 0 0 0 Acquisitions— — — — 
SalesSales0 0 0 0 Sales— (13,213)— (13,213)
AmortizationAmortization0 2,275 4 2,279 Amortization— 1,140 2 1,142 
Other(1)
Other(1)
(47)(2,234)(26,194)(28,475)
Other(1)
— (1,337)(2,028)(3,365)
Transfers into Level 3(2)
Transfers into Level 3(2)
0 0 0 0 
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
Transfers out of Level 3(2)
0 0 0 0 
Transfers out of Level 3(2)
— — — — 
Balance at June 30, 2020
$12,880 $69,099 $658,916 $740,895 
Balance at March 31, 2021
Balance at March 31, 2021
$11,609 $61,301 $688,344 $761,254 
Percent of total fixed maturitiesPercent of total fixed maturities0 %1 %3 %4 %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.


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 June 30, 2021$63 $13,528 $(12,489)$1,102 
At June 30, 2020(250)(5,046)11,765 6,469 
Changes in Unrealized Gains (Losses) included in Other Comprehensive Income for Assets Held at the End of the Period
Asset-
backed Securities		Collateralized
Debt
Obligations		CorporatesTotal
At March 31, 2022$— $(3,809)$(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 June 30, 202199 17 116 
As of December 31, 202054 24 78 
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 1,9172,091 issues by 779876 different issuers at June 30, 2021March 31, 2022 and 1,9002,060 issues by 777843 different issuers at December 31, 2020.2021. The weighted-average quality rating of all unrealized loss positions at amortized cost was BBB+A and BBB-A- as of June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.



16
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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
The following table disclosestables disclose unrealized investment losses by class and major sector of fixed maturities available for sale for which an allowance for credit losses has not been recorded at June 30,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.

Analysis of Gross Unrealized Investment Losses
At June 30, 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$3,888 $(128)$2 $0 $3,890 $(128)
States, municipalities and political subdivisions61,437 (696)0 0 61,437 (696)
Foreign governments32,095 (3,707)0 0 32,095 (3,707)
Corporates, by sector:
Financial108,309 (4,251)5,069 (158)113,378 (4,409)
Utilities22,950 (815)0 0 22,950 (815)
Energy84,963 (403)0 0 84,963 (403)
Other corporate sectors125,515 (5,677)100 (2)125,615 (5,679)
Total corporates341,737 (11,146)5,169 (160)346,906 (11,306)
Collateralized debt obligations0 0 0 0 0 0 
Other asset-backed securities10,552 (9)2 0 10,554 (9)
Total investment grade securities449,709 (15,686)5,173 (160)454,882 (15,846)
Below investment grade securities:
States, municipalities and political subdivisions0 0 0 0 0 0 
Corporates, by sector:
Financial20,243 (58)103,362 (9,153)123,605 (9,211)
Utilities15,008 (87)0 0 15,008 (87)
Energy0 0 26,647 (1,449)26,647 (1,449)
Other corporate sectors7,857 (3,442)19,190 (2,133)27,047 (5,575)
Total corporates43,108 (3,587)149,199 (12,735)192,307 (16,322)
Collateralized debt obligations0 0 0 0 0 0 
Other asset-backed securities0 0 12,962 (838)12,962 (838)
Total below investment grade securities43,108 (3,587)162,161 (13,573)205,269 (17,160)
Total fixed maturities
$492,817 $(19,273)$167,334 $(13,733)$660,151 $(33,006)
16
        




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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
The following table discloses unrealized investment losses by class and major sector of fixed maturities available for sale at December 31, 2020.

Analysis of Gross Unrealized Investment Losses
At December 31, 2020At December 31, 2021
Less than Twelve MonthsTwelve Months or LongerTotalLess than Twelve MonthsTwelve Months or LongerTotal
Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss		Fair
Value		Unrealized
Loss
Fixed maturities available for sale:Fixed maturities available for sale:Fixed maturities available for sale:
Investment grade securities:Investment grade securities:Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprisesU.S. Government direct, guaranteed, and government-sponsored enterprises$2,006 $(43)$0 $0 $2,006 $(43)U.S. Government direct, guaranteed, and government-sponsored enterprises$118 $(1)$3,867 $(163)$3,985 $(164)
States, municipalities and political subdivisionsStates, municipalities and political subdivisions32,910 (315)0 0 32,910 (315)States, municipalities and political subdivisions141,310 (2,824)2,436 (83)143,746 (2,907)
Foreign governmentsForeign governments19,532 (898)0 0 19,532 (898)Foreign governments12,567 (561)23,144 (4,571)35,711 (5,132)
Corporates, by sector:Corporates, by sector:Corporates, by sector:
FinancialFinancial117,762 (2,564)6,333 (2,168)124,095 (4,732)Financial133,654 (1,507)52,864 (1,932)186,518 (3,439)
UtilitiesUtilities2,726 (108)0 0 2,726 (108)Utilities25,447 (692)2,372 (320)27,819 (1,012)
EnergyEnergy1,692 (8)14,871 (106)16,563 (114)Energy6,519 (238)— — 6,519 (238)
Other corporate sectorsOther corporate sectors21,882 (720)0 0 21,882 (720)Other corporate sectors115,444 (3,566)40,249 (3,670)155,693 (7,236)
Total corporatesTotal corporates144,062 (3,400)21,204 (2,274)165,266 (5,674)Total corporates281,064 (6,003)95,485 (5,922)376,549 (11,925)
Collateralized debt obligationsCollateralized debt obligations0 0 0 0 0 0 Collateralized debt obligations— — — — — — 
Other asset-backed securitiesOther asset-backed securities28,864 (1,051)5 0 28,869 (1,051)Other asset-backed securities10,489 (16)1 — 10,490 (16)
Total investment grade securitiesTotal investment grade securities227,374 (5,707)21,209 (2,274)248,583 (7,981)Total investment grade securities445,548 (9,405)124,933 (10,739)570,481 (20,144)
Below investment grade securities:Below investment grade securities:Below investment grade securities:
States, municipalities and political subdivisionsStates, municipalities and political subdivisions0 0 0 0 0 0 States, municipalities and political subdivisions— — — — — — 
Corporates, by sector:Corporates, by sector:Corporates, by sector:
FinancialFinancial6,822 (36)115,093 (19,453)121,915 (19,489)Financial15,695 (272)56,897 (5,638)72,592 (5,910)
UtilitiesUtilities0 0 0 0 0 0 Utilities— — — — — — 
EnergyEnergy18,432 (757)38,720 (2,212)57,152 (2,969)Energy— — 26,639 (1,445)26,639 (1,445)
Other corporate sectorsOther corporate sectors25,711 (3,588)19,516 (1,910)45,227 (5,498)Other corporate sectors700 (11)26,581 (6,115)27,281 (6,126)
Total corporatesTotal corporates50,965 (4,381)173,329 (23,575)224,294 (27,956)Total corporates16,395 (283)110,117 (13,198)126,512 (13,481)
Collateralized debt obligationsCollateralized debt obligations0 0 11,131 (8,869)11,131 (8,869)Collateralized debt obligations— — — — — — 
Other asset-backed securitiesOther asset-backed securities0 0 11,223 (2,727)11,223 (2,727)Other asset-backed securities— — 13,043 (414)13,043 (414)
Total below investment grade securitiesTotal below investment grade securities50,965 (4,381)195,683 (35,171)246,648 (39,552)Total below investment grade securities16,395 (283)123,160 (13,612)139,555 (13,895)
Total fixed maturities
Total fixed maturities
$278,339 $(10,088)$216,892 $(37,445)$495,231 $(47,533)
Total fixed maturities
$461,943 $(9,688)$248,093 $(24,351)$710,036 $(34,039)



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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Allowance for credit losses beginning balance
Allowance for credit losses beginning balance
$0 $31,854 $3,346 $0 
Allowance for credit losses beginning balance
$387 $3,346 
Additions to allowance for which credit losses were not previously recordedAdditions to allowance for which credit losses were not previously recorded0 0 0 31,854 Additions to allowance for which credit losses were not previously recorded— — 
Additions (reductions) to allowance for fixed maturities that previously had an allowanceAdditions (reductions) to allowance for fixed maturities that previously had an allowance0 865 0 865 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 periodReduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period0 0 (3,346)0 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
Allowance for credit losses ending balance
$0 $32,719 $0 $32,719 
Allowance for credit losses ending balance
$— $— 

As of June 30, 2021March 31, 2022 and December 31, 2020,2021, 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:
June 30,
2021		December 31, 2020March 31,
2022		December 31, 2021
Investment fundsInvestment funds$533,658 $385,038 Investment funds$732,360 $640,263 
Commercial mortgage loan participationsCommercial mortgage loan participations160,639 160,602 Commercial mortgage loan participations144,074 141,843 
OtherOther3,891 1,341 Other13,335 11,819 
Total
Total
$698,188 $546,981 
Total
$889,769 $793,925 

The following table presents additional information about the Company's investment funds consistas of limited partnerships whereby the Company has a pro-rata share of ownership ranging from 1% to 20%. For each investment, the Company has elected theMarch 31, 2022 and December 31, 2021 at fair value option, but would have been otherwise accounted for as an equity method investment. The fair value option is assessed for each individual investment and concluded at the inception of the investment. Additionally, each investment is evaluated under ASC 810, Consolidation to determine if it is a variable interest entity and would qualify for consolidation; none of the investments qualify for consolidation as the Company is not the primary beneficiary in any of these investments.value:

The investments are reported at the Company's pro-rata share of the investment fund's net asset value or its equivalent (NAV) as a practical expedient for fair value. Changes in the net asset value are recorded in "Realized gains (losses)" on the Condensed Consolidated Statements of Operations. Distributions received from the funds arise from income generated by the underlying investments as well as the liquidation of the underlying investments. Periodic distributions are recorded in net investment income until cumulative distributions exceed our pro-rata share of operating earnings at which point the distributions will reduce the carrying value. Our maximum exposure to loss is equal to the outstanding carrying value and future funding commitments.
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 

During the quarter, the Company committed to one new limited partnership. The Company had $72$118 million of capital called during the quarter from existing investment funds, reducing our unfunded commitments. Our unfunded commitments were $409$358 million as of June 30, 2021.March 31, 2022.


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
The following table presents additional information about the Company's investment funds as of June 30, 2021 and December 31, 2020 at fair value:
Fair ValueUnfunded Commitments
Investment CategoryJune 30,
2021		December 31, 2020June 30,
2021		Redemption Term/Notice
Commercial mortgage loans$347,042 $227,050 $172,001 Portion non-redeemable and fully redeemable after 6 month period, subject to fund liquidity/discretion of General Partner. Expected life is 7 years for non-redeemable fund.
Opportunistic credit169,351 157,461 0 Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.
Other17,265 527 236,811 Fully redeemable with varying terms and non-redeemable.
Total investment funds$533,658 $385,038 $408,812 

Commercial Mortgage Loan Participations (commercial mortgage loans): Summaries of commercial mortgage loans by property type and geographical location at June 30, 2021March 31, 2022 and December 31, 20202021 are as follows:
June 30, 2021December 31, 2020March 31, 2022December 31, 2021
Carrying Value% of TotalCarrying Value% of TotalCarrying Value% of TotalCarrying Value% of Total
Property type:Property type:Property type:
Mixed useMixed use$51,124 32 $49,002 31 Mixed use$60,396 42 $57,996 41 
Office36,156 23 36,153 22 
HospitalityHospitality22,540 14 22,605 14 Hospitality23,161 16 23,186 16 
RetailRetail19,699 12 19,319 12 Retail19,860 14 19,811 14 
IndustrialIndustrial17,900 11 17,900 11 Industrial17,900 13 17,900 13 
Multi-familyMulti-family14,859 9 19,128 12 Multi-family14,770 10 14,872 11 
OfficeOffice8,814 6 8,905 6 
Total recorded investmentTotal recorded investment162,278 101 164,107 102 Total recorded investment144,901 101 142,670 101 
Less allowance for credit lossesLess allowance for credit losses(1,639)(1)(3,505)(2)Less allowance for credit losses(827)(1)(827)(1)
Carrying value, net of allowance for credit losses
Carrying value, net of allowance for credit losses
$160,639 100 $160,602 100 
Carrying value, net of allowance for credit losses
$144,074 100 $141,843 100 
June 30, 2021December 31, 2020
Carrying Value% of TotalCarrying Value% of Total
Geographic location:
California$62,764 39 $61,610 38 
Virginia27,019 17 27,019 17 
New York17,107 11 16,602 10 
Pennsylvania11,661 7 11,314 7 
Indiana9,717 6 9,717 6 
Florida8,142 5 12,420 8 
Other25,868 16 25,425 16 
Total recorded investment162,278 101 164,107 102 
Less allowance for credit losses(1,639)(1)(3,505)(2)
Carrying value, net of allowance for credit losses
$160,639 100 $160,602 100 

20
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 Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 2021,2020, 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 OriginationNet Book Value of Commercial Mortgage Loans Receivable by Year of Origination
As of June 30, 2021As of March 31, 2022
Risk Rating:Risk Rating:Number of Loans20212020201920182017TotalRisk Rating:Number of Loans202220212020201920182017Total
LowLow16 $0 $20,884 $13,080 $32,957 $62,057 $128,978 Low14 $— $— $25,045 $12,509 $41,151 $35,851 $114,556 
ModerateModerate5 0 0 13,601 8,142 0 21,743 Moderate6 — — 1,297 17,434 — — 18,731 
HighHigh2 0 0 4,568 6,989 0 11,557 High2 — — — 4,597 7,017 — 11,614 
Total commercial mortgage loansTotal commercial mortgage loans23 $0 $20,884 $31,249 $48,088 $62,057 162,278 Total commercial mortgage loans22 $— $— $26,342 $34,540 $48,168 $35,851 144,901 
Less allowance for credit losses on the investment poolLess allowance for credit losses on the investment pool(1,639)Less allowance for credit losses on the investment pool(827)
Less allowance for credit losses on individual loansLess allowance for credit losses on individual loans0 Less allowance for credit losses on individual loans— 
Carrying value, net of valuation allowance
Carrying value, net of valuation allowance
$160,639 
Carrying value, net of valuation allowance
$144,074 

Net Book Value of Commercial Mortgage Loans Receivable by Year of OriginationNet Book Value of Commercial Mortgage Loans Receivable by Year of Origination
As of December 31, 2020As of December 31, 2021
Risk Rating:Risk Rating:Number of Loans2020201920182017TotalRisk Rating:Number of Loans20212020201920182017Total
LowLow17 $20,176 $14,757 $33,132 $61,460 $129,525 Low14 $— $23,636 $11,925 $41,209 $35,729 $112,499 
ModerateModerate4 0 10,640 7,796 0 18,436 Moderate6 — 1,400 17,173 — — 18,573 
HighHigh3 0 4,554 11,592 0 16,146 High2 — — 4,593 7,005 — 11,598 
Total commercial mortgage loansTotal commercial mortgage loans24 $20,176 $29,951 $52,520 $61,460 164,107 Total commercial mortgage loans22 $— $25,036 $33,691 $48,214 $35,729 142,670 
Less allowance for credit losses on the investment poolLess allowance for credit losses on the investment pool(2,503)Less allowance for credit losses on the investment pool(827)
Less allowance for credit losses on individual loansLess allowance for credit losses on individual loans(1,002)Less allowance for credit losses on individual loans— 
Carrying value, net of valuation allowance
Carrying value, net of valuation allowance
$160,602 
Carrying value, net of valuation allowance
$141,843 
As of June 30, 2021,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 2322 loans in the portfolio. For the sixthree months ended June 30, 2021,March 31, 2022, the allowance for credit losses decreased by $1.9 million to $1.6 million.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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Allowance for credit losses beginning balance
Allowance for credit losses beginning balance
$2,147 $335 $3,505 $0 
Allowance for credit losses beginning balance
$827 $3,505 
Cumulative effect of adoption ASU 2016-130 0 0 335 
Provision (reversal) for credit lossesProvision (reversal) for credit losses(508)3,503 (1,866)3,503 Provision (reversal) for credit losses— (1,358)
Loans charge-off0 0 0 0 
Allowance for credit losses ending balance
Allowance for credit losses ending balance
$1,639 $3,838 $1,639 $3,838 
Allowance for credit losses ending balance
$827 $2,147 


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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
There were no delinquent commercial mortgage loans as of June 30, 2021, compared with one delinquent commercial mortgage at DecemberMarch 31, 2020. As of June 30, 20212022 and December 31, 2020,2021. As of March 31, 2022 and December 31, 2021, the Company had one commercial mortgage loan in non-accrual status.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 $37$27 million as of June 30, 2021.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 2023.2026. 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. As of June 30, 2021 and DecemberThe amount outstanding at March 31, 2020, the outstanding balance2022 was $135$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.

On January 4, 2021, putative class and collective action litigation was filed against National Income Life Insurance Company in the United States District Court for the Northern District of New York. (John Turner v. National Income Life Insurance Company, Case No. 5:21-cv-0003). Plaintiff Turner is a former New York National Income agent who asserted a claim under New York law on behalf of a putative New York class of trainees and sales agents for the six years prior to February 13, 2020 through case conclusion. He made a claim under the New York Labor Law for alleged failure to pay minimum wage and overtime, and for expense reimbursement. In addition, Mr. Turner asserted a claim under the Fair Labor Standards Act (FLSA) on behalf of trainees and sales agents for the three years prior to February 13, 2020 through case conclusion. The FLSA claim alleged failure to pay for all hours worked and sought expense reimbursement. The lawsuit also requested declaratory relief and liquidated damages. Prior to filing a motion to compel arbitration of Mr. Turner’s individual claims, National Income reached a settlement with Mr. Turner for a non-material sum as to his individual claims, and the litigation has been dismissed.



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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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:
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Balance at beginning of period
Balance at beginning of period
$162,261 $163,808 
Balance at beginning of period
$167,832 $162,261 
Incurred related to:Incurred related to:Incurred related to:
Current yearCurrent year325,582 584,936 Current year176,953 638,054 
Prior yearPrior year(19,681)(14,829)Prior year(12,008)(22,477)
Total incurredTotal incurred305,901 570,107 Total incurred164,945 615,577 
Paid related to:Paid related to:Paid related to:
Current yearCurrent year197,328 442,127 Current year70,775 487,096 
Prior yearPrior year106,148 129,527 Prior year89,235 122,910 
Total paidTotal paid303,476 571,654 Total paid160,010 610,006 
Balance at end of period
Balance at end of period
$164,686 $162,261 
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.
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Policy claims and other benefits payable:Policy claims and other benefits payable:Policy claims and other benefits payable:
Life insuranceLife insurance$211,137 $237,246 Life insurance$260,786 $245,108 
Health insuranceHealth insurance164,686 162,261 Health insurance172,767 167,832 
TotalTotal$375,823 $399,507 Total$433,553 $412,940 


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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 defined benefit plansPension Plans and SERP.

Pension Assets: The following table presents the assets of the Company's defined benefit pension planPension Plans at June 30, 2021March 31, 2022 and December 31, 2020.2021.

Pension Assets by Component at June 30, 2021March 31, 2022
Fair Value Determined by:   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
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:Corporate bonds:Corporate bonds:
FinancialFinancial$0 $56,211 $0 $56,211 10 Financial$— $47,184 $— $47,184 8 
UtilitiesUtilities0 44,358 0 44,358 8 Utilities— 39,148 — 39,148 7 
EnergyEnergy0 23,119 0 23,119 4 Energy— 20,916 — 20,916 4 
Other corporatesOther corporates0 89,934 0 89,934 16 Other corporates— 79,311 — 79,311 14 
Total corporate bondsTotal corporate bonds0 213,622 0 213,622 38 Total corporate bonds— 186,559 — 186,559 33 
Exchange traded fund(1)
Exchange traded fund(1)
281,693 0 0 281,693 51 
Exchange traded fund(1)
300,244 — — 300,244 55 
Other bondsOther bonds0 247 0 247 0 Other bonds— 223 — 223 — 
Guaranteed annuity contract(2)
Guaranteed annuity contract(2)
0 30,381 0 30,381 5 
Guaranteed annuity contract(2)
— 34,863 — 34,863 6 
Short-term investmentsShort-term investments13,583 0 0 13,583 2 Short-term investments12,075 — — 12,075 2 
OtherOther2,812 0 0 2,812 1 Other8,192 — — 8,192 1 
$298,088 $244,250 $0 542,338 97 $320,511 $221,645 $— 542,156 97 
Other long-term investments(3)
Other long-term investments(3)
15,720 3 
Other long-term investments(3)
15,545 3��
Total pension assets
Total pension assets
$558,058 100 
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 June 30, 2021,March 31, 2022, the expected term of the investment fund is approximately 43 years and the commitment of the investment is fully funded. The investment is non-redeemable.


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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Pension Assets by Component at December 31, 20202021
Fair Value Determined by:   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
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:Corporate bonds:Corporate bonds:
FinancialFinancial$0 $52,252 $0 $52,252 10 Financial$— $52,522 $— $52,522 9 
UtilitiesUtilities0 45,888 0 45,888 9 Utilities— 43,663 — 43,663 7 
EnergyEnergy0 22,480 0 22,480 4 Energy— 22,719 — 22,719 4 
Other corporatesOther corporates0 88,983 0 88,983 17 Other corporates— 88,673 — 88,673 15 
Total corporate bondsTotal corporate bonds0 209,603 0 209,603 40 Total corporate bonds— 207,577 — 207,577 35 
Exchange traded fund(1)
Exchange traded fund(1)
245,170 0 0 245,170 46 
Exchange traded fund(1)
315,720 — — 315,720 52 
Other bondsOther bonds0 258 0 258 0 Other bonds— 239 — 239 — 
Guaranteed annuity contract(2)
Guaranteed annuity contract(2)
0 30,119 0 30,119 6 
Guaranteed annuity contract(2)
— 34,743 — 34,743 6 
Short-term investmentsShort-term investments20,960 0 0 20,960 4 Short-term investments13,731 — — 13,731 2 
OtherOther7,109 0 0 7,109 1 Other10,388 — — 10,388 2 
$273,239 $239,980 $0 513,219 97 $339,839 $242,559 $— 582,398 97 
Other long-term investments(3)
Other long-term investments(3)
16,313 3 
Other long-term investments(3)
15,149 3 
Total pension assets
Total pension assets
$529,532 100 
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.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, 2020,2021, the expected term of the investment fund iswas approximately 43 years and the commitment of the investment is fully funded. The investment is non-redeemable.


SERP: The following table includes information regarding the SERP.
Six Months Ended
June 30,		Three Months Ended
March 31,
2021202020222021
Premiums paid for insurance coveragePremiums paid for insurance coverage$443 $443 Premiums paid for insurance coverage$443 $443 
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Total investments:Total investments:Total investments:
Company owned life insuranceCompany owned life insurance$52,529 $51,361 Company owned life insurance$53,572 $52,791 
Exchange traded fundsExchange traded funds79,788 75,390 Exchange traded funds80,685 87,133 
$132,317 $126,751 $134,257 $139,924 



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Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(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 June 30, 2021March 31, 2022 and December 31, 2020.2021.
June 30,
2021		December 31,
2020		March 31,
2022		December 31,
2021
Defined benefit pension$704,695 $667,753 
Pension PlansPension Plans$651,861 $686,917 
SERPSERP95,917 95,560 SERP91,725 92,017 
Pension benefit obligation
Pension benefit obligation
$800,612 $763,313 
Pension benefit obligation
$743,586 $778,934 

Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the defined benefit pension plansPension Plans and SERP by expense components for the three and six months ended June 30, 2021March 31, 2022 and 2020.2021.

Components of Net Periodic Benefit Cost
Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
2021202020212020 20222021
Service costService cost$7,918 $6,115 $15,836 $12,231 Service cost$8,655 $7,918 
Interest costInterest cost5,469 5,647 10,936 11,298 Interest cost6,123 5,467 
Expected return on assetsExpected return on assets(8,083)(7,391)(16,166)(14,781)Expected return on assets(8,885)(8,083)
Amortization:Amortization:Amortization:
Prior service costPrior service cost158 158 316 316 Prior service cost158 158 
Actuarial (gain) lossActuarial (gain) loss4,984 3,925 9,969 7,849 Actuarial (gain) loss3,209 4,985 
Net periodic benefit cost
Net periodic benefit cost
$10,446 $8,454 $20,891 $16,913 
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
June 30,		Six Months Ended
June 30,		Three Months Ended
March 31,
202120202021202020222021
Basic weighted average shares outstandingBasic weighted average shares outstanding102,895,435 106,441,311 103,187,567 106,863,267 Basic weighted average shares outstanding99,273,616 103,482,944 
Weighted average dilutive options outstandingWeighted average dilutive options outstanding1,337,911 692,706 1,331,047 1,195,173 Weighted average dilutive options outstanding976,758 1,354,773 
Diluted weighted average shares outstandingDiluted weighted average shares outstanding104,233,346 107,134,017 104,518,614 108,058,440 Diluted weighted average shares outstanding100,250,374 104,837,717 
Antidilutive sharesAntidilutive shares31,269 5,417,077 1,326,599 2,281,300 Antidilutive shares563,991 1,836,559 

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

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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Note 9—Debt

Long-term debt: On June 14, 2021, Globe Life completed the issuance and sale of $325 million in aggregate principal amount of 4.25% unsecured Junior Subordinated Debentures due June 15, 2061. The net proceeds from the sale of the Junior Subordinated Debentures were $317 million and were used to redeem the 6.125% Junior Subordinated Debentures plus accrued interest of $1.5 million on July 15, 2021 as well as for 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 ofAs of
June 30,
2021		December 31, 2020March 31,
2022		December 31,
2021
InstrumentInstrumentIssue DateMaturity DateCoupon RatePar
Value		Unamortized Discount & Issuance CostsBook
Value		Fair
Value		Book
Value		InstrumentIssue DateMaturity DateCoupon RatePar
Value		Unamortized Discount & Issuance CostsBook
Value		Fair
Value		Book
Value
Senior notesSenior notes5/27/19935/15/20237.875%$165,612 $(529)$165,083 $187,310 $164,954 Senior notes5/27/19935/15/20237.875%$165,612 $(327)$165,285 $174,991 $165,216 
Senior notes(1)
Senior notes(1)
9/24/20129/15/20223.800%150,000 (419)149,581 155,873 149,414 
Senior notes(1)
9/24/20129/15/20223.800%150,000 (161)149,839 151,500 149,752 
Senior notesSenior notes9/27/20189/15/20284.550%550,000 (5,361)544,639 643,418 544,328 Senior notes9/27/20189/15/20284.550%550,000 (4,888)545,112 576,906 544,949 
Senior notesSenior notes8/21/20208/15/20302.150%400,000 (4,435)395,565 395,184 395,157 Senior notes8/21/20208/15/20302.150%400,000 (4,111)395,889 358,344 395,778 
Junior subordinated debentures(2)
5/17/20166/15/20566.125%300,000 (9,312)290,688 313,320 290,652 
Junior subordinated debenturesJunior subordinated debentures11/17/201711/17/20575.275%125,000 (1,612)123,388 129,895 123,381 Junior subordinated debentures11/17/201711/17/20575.275%125,000 (1,601)123,399 127,150 123,396 
Junior subordinated debenturesJunior subordinated debentures6/14/20216/15/20614.250%325,000 (7,828)317,172 339,430 0 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)
Less current maturity of long-term debt(1)
150,000 (161)149,839 151,500 149,752 
Total long-term debt
Total long-term debt
2,015,612 (29,496)1,986,116 2,164,430 1,667,886 
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)
Current maturity of long-term debt(1)
150,000 (161)149,839 151,500 149,752 
Commercial paperCommercial paper260,000 (54)259,946 259,946 254,918 Commercial paper372,524 (284)372,240 372,240 329,892 
Total short-term debt
Total short-term debt
260,000 (54)259,946 259,946 254,918 
Total short-term debt
522,524 (445)522,079 523,740 479,644 
Total debt
Total debt
$2,275,612 $(29,550)$2,246,062 $2,424,376 $1,922,804 
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.
(2)The $300 million of 6.125% Junior subordinated debentures were redeemed on July 15, 2021.

The commercial paper has the highest priority of all the debt, followed by senior notes then junior subordinated debentures. The Senior Notessenior 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% "Juniorjunior subordinated debentures"debentures is payable quarterly while all other long-term debt is payable semi-annually.

Federal Home Loan Bank (FHLB) Funding: In2021, 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.

27Globe 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 theCondensed Consolidated Balance Sheetsand 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
(Unaudited)
(Dollar amounts in thousands, except per share data)
As of March 31, 2022, there were 0 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 4 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-renewableguaranteed 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.

27
Premium Income by Distribution Channel
Three Months Ended June 30, 2021
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$347,696 48 $28,789 10 $0 0 $376,485 37 
Direct to Consumer249,440 34 18,450 6 0 0 267,890 26 
Liberty National77,853 11 47,118 16 0 0 124,971 12 
United American2,261 0 116,217 39 0 0 118,478 12 
Family Heritage1,226 0 85,012 29 0 0 86,238 8 
Other49,694 7 0 0 0 0 49,694 5 
$728,170 100 $295,586 100 $0 0 $1,023,756 100 

 Three Months Ended June 30, 2020
 LifeHealthAnnuityTotal
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American Income$308,675 46 $25,554 9 $0 0 $334,229 35 
Direct to Consumer235,201 35 19,060 7 0 0 254,261 27 
Liberty National73,326 11 47,391 17 0 0 120,717 13 
United American2,481 0 112,885 40 3 100 115,369 12 
Family Heritage1,042 0 77,987 27 0 0 79,029 8 
Other50,097 8 0 0 0 0 50,097 5 
$670,822 100 $282,877 100 $3 100 $953,702 100 


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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Premium Income by Distribution Channel

Six Months Ended June 30, 2021Three Months Ended March 31, 2022
LifeHealthAnnuityTotal LifeHealthAnnuityTotal
Distribution ChannelDistribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total		Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American IncomeAmerican Income$682,591 48 $56,140 9 $0 0 $738,731 37 American Income$369,987 49 $28,854 9 $— — $398,841 37 
Direct to ConsumerDirect to Consumer493,468 34 37,810 6 0 0 531,278 26 Direct to Consumer251,126 33 18,756 6 — — 269,882 25 
Liberty NationalLiberty National153,590 11 94,158 16 0 0 247,748 12 Liberty National80,719 11 47,186 15 — — 127,905 12 
United AmericanUnited American4,538 0 233,304 40 1 100 237,843 12 United American2,059 — 132,664 42 — — 134,723 13 
Family HeritageFamily Heritage2,344 0 168,347 29 0 0 170,691 8 Family Heritage1,369 — 89,540 28 — — 90,909 8 
OtherOther99,758 7 0 0 0 0 99,758 5 Other49,342 7 — — — — 49,342 5 
$1,436,289 100 $589,759 100 $1 100 $2,026,049 100 $754,602 100 $317,000 100 $— — $1,071,602 100 

Six Months Ended June 30, 2020 Three Months Ended March 31, 2021
LifeHealthAnnuityTotal LifeHealthAnnuityTotal
Distribution ChannelDistribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American IncomeAmerican Income$611,527 46 $51,281 9 $0 0 $662,808 35 American Income$334,895 47 $27,351 9 $— — $362,246 36 
Direct to ConsumerDirect to Consumer455,244 35 38,856 7 0 0 494,100 26 Direct to Consumer244,028 35 19,360 7 — — 263,388 26 
Liberty NationalLiberty National146,194 11 95,031 17 0 0 241,225 13 Liberty National75,737 11 47,040 16 — — 122,777 12 
United AmericanUnited American4,971 0 222,944 40 3 100 227,918 12 United American2,277 — 117,087 40 1 100 119,365 12 
Family HeritageFamily Heritage2,063 0 154,970 27 0 0 157,033 9 Family Heritage1,118 — 83,335 28 — — 84,453 9 
OtherOther100,453 8 0 0 0 0 100,453 5 Other50,064 7 — — — — 50,064 5 
$1,320,452 100 $563,082 100 $3 100 $1,883,537 100 $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
(Unaudited)
(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 June 30, 2021Three Months Ended March 31, 2022
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidatedLifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:Revenue:Revenue:
PremiumPremium$728,170 $295,586 $0 $0 $0 $— $1,023,756 Premium$754,602 $317,000 $— $— $— $— $1,071,602 
Net investment incomeNet investment income0 0 0 238,308 0 — 238,308 Net investment income— — — 243,834 — — 243,834 
Other incomeOther income0 0 0 0 388 0 388 Other income— — — — 164 — 164 
Total revenueTotal revenue728,170 295,586 0 238,308 388 0 1,262,452 Total revenue754,602 317,000 — 243,834 164 — 1,315,600 
Expenses:Expenses:Expenses:
Policy benefits498,471 188,854 7,286 0 0 0 694,611 
Policy obligationsPolicy obligations549,343 196,855 7,050 — — — 753,248 
Required interest on reservesRequired interest on reserves(182,495)(25,434)(10,016)217,945 0 — 0 Required interest on reserves(189,709)(26,865)(9,672)226,246 — — — 
Required interest on DACRequired interest on DAC54,222 7,077 66 (61,365)0 — 0 Required interest on DAC56,232 7,463 53 (63,748)— — — 
Amortization of acquisition costsAmortization of acquisition costs120,407 27,132 482 0 0 — 148,021 Amortization of acquisition costs126,079 31,852 453 — — — 158,384 
Commissions, premium taxes, and non-deferred acquisition costsCommissions, premium taxes, and non-deferred acquisition costs58,810 23,496 6 0 0 0 82,312 Commissions, premium taxes, and non-deferred acquisition costs62,203 28,602 8 — — — 90,813 
Insurance administrative expense(1)
Insurance administrative expense(1)
0 0 0 0 67,503 261 (2)67,764 
Insurance administrative expense(1)
— — — — 72,565 112 (2)72,677 
Parent expenseParent expense0 0 0 0 2,757 0 2,757 Parent expense— — — — 2,640 — 2,640 
Stock-based compensation expenseStock-based compensation expense0 0 0 0 8,634 — 8,634 Stock-based compensation expense— — — — 9,035 — 9,035 
Interest expenseInterest expense0 0 0 21,769 0 — 21,769 Interest expense— — — 19,944 — — 19,944 
Total expensesTotal expenses549,415 221,125 (2,176)178,349 78,894 261 1,025,868 Total expenses604,148 237,907 (2,108)182,442 84,240 112 1,106,741 
SubtotalSubtotal178,755 74,461 2,176 59,959 (78,506)(261)236,584 Subtotal150,454 79,093 2,108 61,392 (84,076)(112)208,859 
Non-operating itemsNon-operating items— — — — — 261 (2)261 Non-operating items— — — — — 112 (2)112 
Measure of segment profitability (pretax)
Measure of segment profitability (pretax)
$178,755 $74,461 $2,176 $59,959 $(78,506)$0 236,845 
Measure of segment profitability (pretax)
$150,454 $79,093 $2,108 $61,392 $(84,076)$— 208,971 
Realized gain (loss)—investmentsRealized gain (loss)—investments8,659 Realized gain (loss)—investments(7,244)
Legal proceedings(261)
Non-operating expensesNon-operating expenses(112)
$245,243 $201,615 
(1)Administrative expense is not allocated to insurance segments.
(2)Legal proceedings. Non-operating expenses.



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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Three Months Ended June 30, 2020
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$670,822 $282,877 $3 $0 $0 $— $953,702 
Net investment income0 0 0 231,568 0 — 231,568 
Other income0 0 0 0 404 0 404 
Total revenue670,822 282,877 3 231,568 404 0 1,185,674 
Expenses:
Policy benefits459,845 183,496 7,475 0 — — 650,816 
Required interest on reserves(173,208)(22,851)(10,332)206,391 0 — 0 
Required interest on DAC52,107 6,582 84 (58,773)0 — 0 
Amortization of acquisition costs117,802 27,854 504 0 0 — 146,160 
Commissions, premium taxes, and non-deferred acquisition costs52,577 23,556 7 0 0 0 76,140 
Insurance administrative expense(1)
0 0 0 0 61,566 061,566 
Parent expense0 0 0 0 2,516 0 2,516 
Stock-based compensation expense0 0 0 0 8,632 — 8,632 
Interest expense0 0 0 22,813 0 — 22,813 
Total expenses509,123 218,637 (2,262)170,431 72,714 0 968,643 
Subtotal161,699 64,240 2,265 61,137 (72,310)0 217,031 
Non-operating items— — — — — 0 0 
Measure of segment profitability (pretax)
$161,699 $64,240 $2,265 $61,137 $(72,310)$0 217,031 
Realized gain (loss)—investments(4,790)
$212,241 
(1)Administrative expense is not allocated to insurance segments.






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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note—1 Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
Six Months Ended June 30, 2021Three Months Ended March 31, 2021
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidatedLifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:Revenue:Revenue:
PremiumPremium$1,436,289 $589,759 $1 $0 $0 $0 $2,026,049 Premium$708,119 $294,173 $1 $— $— $— $1,002,293 
Net investment incomeNet investment income0 0 0 474,128 0 0 474,128 Net investment income— — — 235,820 — — 235,820 
Other incomeOther income0 0 0 0 683 0 683 Other income— — — — 295 — 295 
Total revenueTotal revenue1,436,289 589,759 1 474,128 683 0 2,500,860 Total revenue708,119 294,173 1 235,820 295 — 1,238,408 
Expenses:Expenses:Expenses:
Policy benefits1,016,102 376,683 14,545 0 0 0 1,407,330 
Policy obligationsPolicy obligations517,631 187,829 7,259 — — — 712,719 
Required interest on reservesRequired interest on reserves(362,420)(50,429)(20,021)432,870 0 0 0 Required interest on reserves(179,925)(24,995)(10,005)214,925 — — — 
Required interest on DACRequired interest on DAC108,017 14,039 136 (122,192)0 0 0 Required interest on DAC53,795 6,962 70 (60,827)— — — 
Amortization of acquisition costsAmortization of acquisition costs243,711 56,339 964 0 0 0 301,014 Amortization of acquisition costs123,304 29,207 482 — — — 152,993 
Commissions, premium taxes, and non-deferred acquisition costsCommissions, premium taxes, and non-deferred acquisition costs115,478 46,486 14 0 0 0 161,978 Commissions, premium taxes, and non-deferred acquisition costs56,668 22,990 8 — — — 79,666 
Insurance administrative expense(1)
Insurance administrative expense(1)
0 0 0 0 133,679 5,089 (2)138,768 
Insurance administrative expense(1)
— — — — 66,176 4,828 (2)71,004 
Parent expenseParent expense0 0 0 0 5,075 05,075 Parent expense— — — — 2,318 — 2,318 
Stock-based compensation expenseStock-based compensation expense0 0 0 0 16,522 0 16,522 Stock-based compensation expense— — — — 7,888 — 7,888 
Interest expenseInterest expense0 0 0 42,947 0 0 42,947 Interest expense— — — 21,178 — — 21,178 
Total expensesTotal expenses1,120,888 443,118 (4,362)353,625 155,276 5,089 2,073,634 Total expenses571,473 221,993 (2,186)175,276 76,382 4,828 1,047,766 
SubtotalSubtotal315,401 146,641 4,363 120,503 (154,593)(5,089)427,226 Subtotal136,646 72,180 2,187 60,544 (76,087)(4,828)190,642 
Non-operating itemsNon-operating items— — — — — 5,089 (2)5,089 Non-operating items— — — — — 4,828 (2)4,828 
Measure of segment profitability (pretax)
Measure of segment profitability (pretax)
$315,401 $146,641 $4,363 $120,503 $(154,593)$0 432,315 
Measure of segment profitability (pretax)
$136,646 $72,180 $2,187 $60,544 $(76,087)$— 195,470 
Realized gain (loss)—investmentsRealized gain (loss)—investments36,811 Realized gain (loss)—investments28,152 
Legal proceedingsLegal proceedings(5,089)Legal proceedings(4,828)
$464,037 $218,794 
(1)Administrative expense is not allocated to insurance segments.
(2)Legal proceedings.




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Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Dollar amounts in thousands, except per share data)
Six Months Ended June 30, 2020
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$1,320,452 $563,082 $3 $0 $0 $0 $1,883,537 
Net investment income0 0 0 460,559 0 0 460,559 
Other income0 0 0 0 729 0 729 
Total revenue1,320,452 563,082 3 460,559 729 0 2,344,825 
Expenses:
Policy benefits881,515 362,207 15,063 0 0 0 1,258,785 
Required interest on reserves(344,413)(45,361)(20,788)410,562 0 0 0 
Required interest on DAC104,225 13,101 172 (117,498)0 0 0 
Amortization of acquisition costs232,110 56,879 1,008 0 0 0 289,997 
Commissions, premium taxes, and non-deferred acquisition costs106,513 48,551 13 0 0 0 155,077 
Insurance administrative expense(1)
0 0 0 0 125,186 3,275 (2)128,461 
Parent expense0 0 0 0 4,847 0 4,847 
Stock-based compensation expense0 0 0 0 17,988 0 17,988 
Interest expense0 0 0 43,621 0 0 43,621 
Total expenses979,950 435,377 (4,532)336,685 148,021 3,275 1,898,776 
Subtotal340,502 127,705 4,535 123,874 (147,292)(3,275)446,049 
Non-operating items— — — — — 3,275 (2)3,275 
Measure of segment profitability (pretax)
$340,502 $127,705 $4,535 $123,874 $(147,292)$0 449,324 
Realized gain (loss)—investments(30,887)
Legal proceedings(3,275)
$415,162 
(1)Administrative expense is not allocated to insurance segments.
(2)Legal proceedings.


Note 11—Subsequent Events

On August 1, 2021, the Company acquired Beazley Benefits, a small unit of Beazley Insurance Company, Inc. that specializes in the distribution of supplemental health insurance in the U.S., for $59.2 million to enhance Globe Life’s reach in the worksite market.






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CAUTIONARY STATEMENTS
 
We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission. Any statement that is not a historical fact, or that might otherwise be considered an opinion or projection concerning the Company or its business, whether express or implied, is meant as and should be considered a forward-looking statement. Such statements represent management's opinions concerning future operations, strategies, financial results or other developments. We specifically disclaim any obligation to update or revise any forward-looking statement because of new information, future developments, or otherwise.
 
Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the COVID-19 outbreakpandemic and associated direct and indirect effects on our business operations, financial results and financial condition. If these estimates or assumptions prove to be incorrect, the actual results of Globe Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance industry generally, or applicable to the Company specifically. Such events or developments could include, but are not necessarily limited to:

1.Economic and other conditions, including the impact of inflation and the COVID-19 pandemic and its impact on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions;
2.Regulatory developments, including changes in accounting standards or governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);
3.Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;
4.Interest rate changes that affect product sales and/or investment portfolio yield;
5.General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from the COVID-19 pandemic, particularly in certain industries that may comprise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities;
6.Changes in the competitiveness of the Company's products and pricing;
7.Litigation results;
8.Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from operating during the COVID-19 pandemic)pandemic and the impact of higher than anticipated inflation);
9.The ability to obtain timely and appropriate premium rate increases for health insurance policies from our regulators;
10.The customer response to new products and marketing initiatives;
11.Reported amounts in the consolidated financial statements which are based on management estimates and judgments which may differ from the actual amounts ultimately realized;
12.Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems;
13.The severity, magnitude and impact of the COVID-19 pandemic,natural or man-made catastrophic events, including effects of the pandemicbut not limited to pandemics, tornadoes, hurricanes, earthquakes, war and the effects of the U.S. and state governments' and other businesses’ response to the pandemic,terrorism, on our operations and personnel, and on commercial activity and demand for our products; and
14.Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period as a result of the COVID-19 pandemic.period.

Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission.
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GLOBE LIFE INC.
Management's Discussion & Analysis

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with Globe Life's Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this report. The following management discussion will only include comparison to prior year.

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


Results of Operations
gl-20220331_g1.jpg
How Globe Life Views Its Operations. Globe Life Inc. is the holding company for a group of insurance companies that market primarily individual life and supplemental health insurance to lower middle to middle income households throughout the United States. We view our operations by segments, which are the insurance product lines of life, supplemental health, and annuities, and the investment segment that supports the product lines. Segments are aligned based on their common characteristics, comparability of the profit margins, and management techniques used to operate each segment.
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Insurance Product Line Segments. The insurance product line segments involve the marketing, underwriting, and administration of policies. Each product line is further segmented by the various distribution channels that market the insurance policies. Each distribution channel operates in a niche market offering insurance products designed for that particular market. Whether analyzing profitability of a segment as a whole, or the individual distribution channels within the segment, the measure of profitability used by management is the underwriting margin, as seen below:

Premium revenue
                                                           (Policy obligations)
                                                           (Policy acquisition costs and commissions)
                                                            Underwriting margin

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Investment Segment. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below:
Net investment income
(Required interest on net policy liabilities)
                                                           (Financing costs)
                                                            Excess investment income



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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
GLOBE LIFE INC.
Management's Discussion & Analysis
Current Highlights, comparing year-to-date 20212022 with 2020.2021.
•Net income as a return on equity (ROE) for the sixthree months ended June 30, 2021March 31, 2022 was 9.0%8.5% and net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio(1) was 12.4%11.5%.
•Total premium increased 8%7% over the same period in the prior year. Life premium increased 9%7% for the period from $1.3 billion$708 million in 20202021 to $1.4 billion$755 million in 2021.2022. Life underwriting margin declined 7%increased 10% from $341$137 million in 20202021 to $315$150 million in 2021.2022.
•Net investment income increased 3% over the same period in the prior year. Excess investment income declined 3% belowincreased 1% over the prior year.
•Total net sales increased 15%8% over the same period in the prior year from $301$168 million in 2021 to $347 million.$182 million in 2022.
•Book value per share increased 14% overdeclined 8% below the same period in the prior year from $73.26$75.10 to $83.59.$69.16. Book value per share, excluding net unrealized gains on the fixed maturity portfolio(1), increased 9%10% over the prior year from $51.21$54.36 in 2021 to $55.66.$59.65 in 2022.
•The Company estimates $49incurred $46 million of COVID-19 net life claims were incurred as a result(net of the novel coronavirus (COVID-19)reserves released upon death) for the sixthree months ended June 30, 2021March 31, 2022 compared with $22$38 million during the same period last year.
•For the sixthree months ended June 30, 2021,March 31, 2022, the Company repurchased 2.2 million880 thousand shares of Globe Life Inc. common stock at a total cost of $214$89 million for an average share price of $98.61.$100.70.
The following graphs represent net income and net operating income for the six monthsthree month periods ended June 30, 2021March 31, 2022 and 2020.2021.
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(1)
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As shown in the charts above, net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. It has been used consistently by Globe Life's management for many years to evaluate the operating performance of the Company. It differs from net income primarily because it excludes certain non-operating items such as realized gains and losses and certain significant and unusual items included in net income. Net income is the most directly comparable GAAP measure.
(1) Net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio, is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of the net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities, net of tax is $2.9 billion$948 million and $2.4$2.2 billion for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, respectively.

Book value per share, excluding net unrealized gains on the fixed maturity portfolio, is also considered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available for saleavailable-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities is $27.93$9.51 and $22.05$20.74 for sixthe three months ended June 30,March 31, 2022 and 2021, and 2020, respectively.
Refer to Analysis of Profitability by Segment for non-GAAP reconciliation to GAAP.


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
GLOBE LIFE INC.
Management's Discussion & Analysis

Summary of Operations. Net income increased 12%declined 8% to $378$164 million during the sixthree months ended June 30, 2021,March 31, 2022, compared with $339$179 million in the same period in 2020.2021. This increasedecrease was primarily attributed to $29$6 million of after taxafter-tax realized gainslosses on investments in the current period, as compared to $24$22 million of after tax realized lossesgains on investments in the year-ago period. See further discussion under the caption Investments. The increase in after tax realized gains was partially offset by lower life underwriting results due to higher COVID-19 life claims. On a diluted per common share basis, net income per common share for the sixthree months ended June 30, 2021 increased 16%March 31, 2022 declined 4% from $3.13$1.70 to $3.62.$1.64.

Net operating income is the consolidated total of segment profits after-tax and as such is considered a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized gains and losses to be a component of our core insurance operations or operating segments. Additionally, net income was affected by certain significant and unusual non-operating items in 2021 and through the three months ended March 31, 2022. We do not view these items as components of core operating results because they are not indicative of past performance or future prospects of the insurance operations. We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods. Net operating income declined 3%increased 6% to $353$170 million for the sixthree months ended June 30, 2021,March 31, 2022, compared with $366$160 million for the same period in 20202021, primarily due to COVID-19 neta 10% increase in life claims.underwriting margin. On a diluted per common share basis, net operating income per common share for the sixthree months ended June 30, 2021 was flat at $3.38.March 31, 2022 increased from $1.53 to $1.70.

Despite headwinds with COVID-19, the Company continues to see positive signs in its core operations, including strong sales and premium growth, favorable persistency and a strong ROE, excluding net unrealized gains on the fixed maturity portfolio.

COVID-19. For the sixthree months ended June 30, 2021, we estimate $49March 31, 2022, the Company incurred $46 million of COVID-19 net life claimsclaims. Per the Centers for Disease Control and Prevention (CDC), there were incurred, with $38 million or 77% of which were incurred in the first quarter of 2021. For the full year and at the mid-point of our guidance, we estimate COVID-19 net life claims will be between $53 million to $55 million, based on an estimate of approximately 20 to 30155 thousand U.S. COVID-19 deaths in the second halffirst quarter of 2022. For the year. This estimatefull year 2022, we expect total U.S. COVID deaths to fall within a range of U.S. deaths is200,000 to 300,000.

At the midpoint of our 2022 guidance, we expect to incur approximately $71 million of COVID life claims for the full year based on various third-party models.an estimated range of $2.5 million to $3.5 million of COVID life claims per 10,000 U.S. deaths. The projected life claims are dependent on this estimate and many other variables, including, but not limited to, the effect of efforts to reopen the economy,projected U.S. deaths from COVID-19, the timing and availability of effective treatments for the disease, vaccination rates and effectiveness of vaccines, impact from potential variants, and the actual ages and geographic areas in which infections and deaths occur. As such, should actual COVID-19 deaths in the second half of the year be greater than currently anticipated, the total amount of COVID-19 life claims incurred for the full year 2021 will likely be greater than projected at the mid-point of our guidance.

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        GL Q1 2022 FORM 10-Q
Table of Contents
GLOBE LIFE INC.
Management's Discussion & Analysis
Globe Life's operations on a segment-by-segment basis are discussed in depth below. Net operating income has been used consistently by management for many years to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from GAAP net income primarily because it excludes certain non-operating items such as realized gains and losses and other significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP measure.


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GL Q2 2021 FORM 10-Q
Table of Contents
GLOBE LIFE INC.
Management's Discussion & Analysis
Analysis of Profitability by Segment
(Dollar amounts in thousands)
Six Months Ended June 30,Three Months Ended March 31,
20212020Change%20222021Change%
Life insurance underwriting marginLife insurance underwriting margin$315,401 $340,502 $(25,101)(7)Life insurance underwriting margin$150,454 $136,646 $13,808 10 
Health insurance underwriting marginHealth insurance underwriting margin146,641 127,705 18,936 15 Health insurance underwriting margin79,093 72,180 6,913 10 
Annuity underwriting marginAnnuity underwriting margin4,363 4,535 (172)(4)Annuity underwriting margin2,108 2,187 (79)(4)
Excess investment incomeExcess investment income120,503 123,874 (3,371)(3)Excess investment income61,392 60,544 848 1 
Other insurance:Other insurance:Other insurance:
Other incomeOther income683 729 (46)(6)Other income164 295 (131)(44)
Administrative expenseAdministrative expense(133,679)(125,186)(8,493)7 Administrative expense(72,565)(66,176)(6,389)10 
Corporate and otherCorporate and other(21,597)(22,835)1,238 (5)Corporate and other(11,675)(10,206)(1,469)14 
Pre-tax totalPre-tax total432,315 449,324 (17,009)(4)Pre-tax total208,971 195,470 13,501 7 
Applicable taxesApplicable taxes(79,241)(83,748)4,507 (5)Applicable taxes(38,799)(35,379)(3,420)10 
Net operating income
Net operating income
353,074 365,576 (12,502)(3)
Net operating income
170,172 160,091 10,081 6 
Reconciling items, net of tax:Reconciling items, net of tax:Reconciling items, net of tax:
Realized gain (loss)—investmentsRealized gain (loss)—investments29,081 (24,401)53,482 Realized gain (loss)—investments(5,723)22,240 (27,963)
Non-operating expensesNon-operating expenses(88)— (88)
Legal proceedingsLegal proceedings(4,020)(2,587)(1,433)Legal proceedings— (3,814)3,814 
Net income
Net income
$378,135 $338,588 $39,547 12 
Net income
$164,361 $178,517 $(14,156)(8)

The life insurance segment is our primary segment and is the largest contributor to earnings in each period presented. The life insurance segment underwriting margin increased $14 million compared with the prior year quarter, primarily due to premium growth partially offset by higher life claims and higher acquisition costs. The health segment contributed to the growth in income as well, contributing $79 million of additional underwriting margin in the first quarter of 2022 compared with $72 million in the first quarter of 2021.

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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
GLOBE LIFE INC.
Management's Discussion & Analysis
In 2021,2022, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was American Income Life Division. The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the sixthree months ended June 30, 2021.March 31, 2022.

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Total premium income rose 8%7% for the sixthree months ended June 30, 2021March 31, 2022 to $2.0$1.1 billion. Total net sales increased 15%8% to $347$182 million, when compared with the same period in 2020.2021. Total first-year collected premium (defined in the following section) was $288$146 million for the 2021 period,2022, compared with $264$141 million for the 2020 period.2021.

Life insurance premium income increased 9%7% to $1.4 billion$755 million over the prior year total of $1.3 billion.$708 million. Life net sales rose 18%8% to $265$139 million for the first sixthree months of 2021.2022. First-year collected life premium rose 20%3% to $211$106 million. Life underwriting margins, as a percent of premium, declinedincreased to 22%20% in 20212022 from 26% in the prior year.19%. Underwriting margin declinedincreased to $315$150 million for the six months ended June 30, 2021, 7% belowin 2022, 10% over the same period in 2020. The decline in the life underwriting margin is primarily due to an estimated $49 million of COVID-19 net life claims incurred during the first six months of 2021 versus $22 million during the same period in 2020.2021.

Health insurance premium income increased 5%8% to $590$317 million over the prior year total of $563$294 million. Health net sales rose 8% to $82$43 million for the first sixthree months of 2021.2022. First-year collected health premium fell 11%rose 4% to $78$40 million. Health underwriting margins, as a percent of premium, increased towere 25% in 2021 compared with 23%2022 and in 2020.2021. Health underwriting margin increased to $147$79 million for the first sixthree months of 2021, 15%2022, 10% over the same period in 2020.2021.

Excess investment income, the measure of profitability of our investment segment, declined 3%increased 1% during 20212022 to $121$61.4 million from $124$60.5 million in the same period in 2020.2021. Excess investment income per common share, reflecting the impact of our share repurchase program, was flat at $1.15increased 5% to $0.61 from $0.58 when compared with the same period in 2020.2021.

Insurance administrative expenses increased 7%10% in 20212022 when compared with the prior yearprior-year period. These expenses were 6.6%6.8% as a percent of premium during the first six months of 2021 and 2020.2022 compared with 6.6% a year earlier.

For the sixthree months ended June 30, 2021,March 31, 2022, the Company repurchased 2.2 million880 thousand Globe Life Inc. shares at a total cost of $214$89 million for an average share price of $98.61.$100.70.

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GL Q2 2021Q1 2022 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis
The discussions of our segments are presented in the manner we view our operations, as described in Note 10—Business Segments.
 
We use three statistical measures as indicators of premium growth and sales over the near term: “annualized premium in force,” “net sales,” and “first-year collected premium.”
•Annualized premium in force is defined as the premium income that would be received over the following twelve months at any given date on all active policies if those policies remain in force throughout the twelve-month period. Annualized premium in force is an indicator of potential growth in premium revenue.
•Net sales, a statistical performance measure, is calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.
•First-year collected premium is defined as the premium collected during the reporting period for all policies in their first policy year. First-year collected premium takes lapses into account in the first year when lapses are more likely to occur, and thus is a useful indicator of how much new premium is expected to be added to premium income in the future.

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



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GL Q2 2021Q1 2022 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis
LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2021,2022, life premium represented 71%70% of total premium and life underwriting margin represented 68%65% of the total.total underwriting margin. Additionally, investments supporting the reserves for life products produce the majority of excess investment income attributable to the investment segment.
 
The following table presents the summary of results of life insurance. Further discussion of the results by distribution channel is included below.

Life Insurance
Summary of Results
(Dollar amounts in thousands)
Six Months Ended June 30,ChangeThree Months Ended March 31,Change
2021202020222021
Amount% of PremiumAmount% of PremiumAmount%Amount% of PremiumAmount% of PremiumAmount%
Premium and policy chargesPremium and policy charges$1,436,289 100 $1,320,452 100 $115,837 9 Premium and policy charges$754,602 100 $708,119 100 $46,483 7 
Policy obligationsPolicy obligations1,016,102 71 881,515 67 134,587 15 Policy obligations549,343 73 517,631 73 31,712 6 
Required interest on reservesRequired interest on reserves(362,420)(25)(344,413)(26)(18,007)5 Required interest on reserves(189,709)(25)(179,925)(25)(9,784)5 
Net policy obligationsNet policy obligations653,682 46 537,102 41 116,580 22 Net policy obligations359,634 48 337,706 48 21,928 6 
Commissions, premium taxes, and non-deferred acquisition expensesCommissions, premium taxes, and non-deferred acquisition expenses115,478 8 106,513 8 8,965 8 Commissions, premium taxes, and non-deferred acquisition expenses62,203 8 56,668 8 5,535 10 
Amortization of acquisition costsAmortization of acquisition costs351,728 24 336,335 25 15,393 5 Amortization of acquisition costs182,311 24 177,099 25 5,212 3 
Total expenseTotal expense1,120,888 78 979,950 74 140,938 14 Total expense604,148 80 571,473 81 32,675 6 
Insurance underwriting margin
Insurance underwriting margin
$315,401 22 $340,502 26 $(25,101)(7)
Insurance underwriting margin
$150,454 20 $136,646 19 $13,808 10 

The lowerhigher life insurance underwriting margins for the sixthree months ended June 30, 2021March 31, 2022 are primarily attributed to the increase in COVID-19 netpremium growth partially offset by higher life claims in the current year. The Company incurred $49 million for the six months ended June 30, 2021, compared with $22 million at the same time in the prior year.and higher acquisition costs.

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

Life Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		Three Months Ended March 31,Increase
(Decrease)
2021202020222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
American IncomeAmerican Income$682,591 48 $611,527 46 $71,064 12 American Income$369,987 49 $334,895 47 $35,092 10 
Direct to ConsumerDirect to Consumer493,468 34 455,244 35 38,224 8 Direct to Consumer251,126 33 244,028 34 7,098 3 
Liberty NationalLiberty National153,590 11 146,194 11 7,396 5 Liberty National80,719 11 75,737 11 4,982 7 
OtherOther106,640 7 107,487 8 (847)(1)Other52,770 7 53,459 8 (689)(1)
Total
Total
$1,436,289 100 $1,320,452 100 $115,837 9 
Total
$754,602 100 $708,119 100 $46,483 7 

Annualized life premium in force was $2.86$2.99 billion at June 30, 2021,March 31, 2022, an increase of 8%7% over $2.65$2.79 billion a year earlier.


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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

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

Life Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		Three Months Ended March 31,Increase
(Decrease)
2021202020222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
American IncomeAmerican Income$142,856 54 $114,283 51 $28,573 25 American Income$85,350 61 $69,623 54 $15,727 23 
Direct to ConsumerDirect to Consumer81,972 31 81,943 37 29 — Direct to Consumer33,913 24 39,691 31 (5,778)(15)
Liberty NationalLiberty National34,148 13 23,197 10 10,951 47 Liberty National17,365 13 16,225 13 1,140 7 
OtherOther5,635 2 5,319 2 316 6 Other2,375 2 2,688 2 (313)(12)
Total
Total
$264,611 100 $224,742 100 $39,869 18 
Total
$139,003 100 $128,227 100 $10,776 8 


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

Life Insurance
First-Year Collected Premium by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		Three Months Ended March 31,Increase
(Decrease)
2021202020222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
American IncomeAmerican Income$121,432 58 $101,975 58 $19,457 19 American Income$65,294 62 $58,597 57 $6,697 11 
Direct to ConsumerDirect to Consumer60,878 29 47,775 27 13,103 27 Direct to Consumer24,212 23 30,627 30 (6,415)(21)
Liberty NationalLiberty National23,747 11 21,308 12 2,439 11 Liberty National13,748 13 11,240 11 2,508 22 
OtherOther4,763 2 5,325 3 (562)(11)Other2,397 2 2,330 2 67 3 
Total
Total
$210,820 100 $176,383 100 $34,437 20 
Total
$105,651 100 $102,794 100 $2,857 3 

A discussion of life operations by distribution channel follows.

The American Income Life Division markets to members of labor unions and continues to diversify its lead sources by building relationships with other affinity groups, utilizing third-party internet vendor leads, and obtaining referrals to facilitate sustainable growth. This division is Globe Life's largest contributor to life premium of any distribution channel at 48%49% of the Company's June 30, 2021March 31, 2022 total. Net sales increased 25%23% to $143$85 million during the first sixthree months of 2022 compared with $70 million in 2021 over the 2020 total for the same period of $114 million.period. The underwriting margin, as a percent of premium, was 30% for the sixthree months ended June 30, 2021, downMarch 31, 2022, up from 32%29% in the year-ago period. The lower underwriting margin was primarily due to higher policy obligations as a result of the pandemic.

This division is anticipating an increase in net sales for the full year 2021 as compared with 2020. Sales growth in our exclusive agencies is generally dependent on growth in the size of the agency force.

While this division has experienced $13incurred $15 million in COVID-19 net life claims, representing approximately 4% of premium, for the sixthree months ended June 30, 2021,March 31, 2022 compared with $9 million in COVID-19 net life claims during the underwriting margin as a percent of premium, at the mid-point of our guidance, is expected to remain flat for the year due to improved persistency and higher projected net sales.year-ago period.



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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

This division is anticipating an increase in net sales for the full year 2022 as compared with 2021 due in part to increased productivity plus a gradual improvement in issue rates as some challenges in underwriting, such as staffing and speed of obtaining medical records and other information, are resolving. Below is the average producing agent count at the end of the period for the American Income Life Division. The average producing agent count is based on the actual count at the end of each week during the year. ThisRecruiting challenges in a difficult job market led to a reduction in the number of producing agents in the second half of 2021. The division continuesis seeing improvements in the job market and its ability to experiencerecruit both virtually and in-person and currently expects growth in the producing agent count in the second half of 2022. Sales growth compared within our exclusive agencies is generally dependent on growth in the prior year at the beginningsize of the COVID-19 pandemic.agency force.
At June 30,Change
20212020Amount%
American Income10,198 8,012 2,186 27 
At March 31,Change
20222021Amount%
American Income9,385 9,918 (533)(5)

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

The Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mail,mailings, insert media, and electronic media. In recent years, production from electronic media, productionwhich is comprised of sales through both the internet and inbound phone calls to our call center, has grown rapidly compared with direct mail response as management has aggressively increased marketing activities related to internet and mobile technology as well as focused on driving traffic to our inbound call center. This had been steadily increasing prior to COVID-19, but the pandemic accelerated this activity due in part to the awareness of needing life insurance from the effects of COVID-19. The different approaches support and complement one another in the division's efforts to reach the consumer. The DTC's long-term growth has been fueled by constant innovation and name recognition. We continually introduce new initiatives in this division in an attempt to increase response rates.

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

DTC net sales were flatdeclined 15% to $34 million for the sixthree months ended June 30, 2021March 31, 2022 compared with $40 million for the same period in the prior year. In the second quarter of 2020, the Company saw record net sales at this division as a response to the COVID-19 pandemic. While we expect continued strong salesyear, primarily due to the heightened awareness as torecord high net life sales in the benefitsprior year. DTC incurred $25 million of COVID-19 net life insurance, we anticipate sales levels overclaims, representing approximately 10% of premium, for the remainder of 2021 will be lower thanthree months ended March 31, 2022 compared with $20 million for the same period in 2020. Despite the lower sales, we expect favorable persistency to continue over the remainder of this year, leading to higher premiums, higher policy obligations, and lower acquisition expenses as a percent of premium.

2021. DTC’s underwriting margin, as a percent of premium, was 9%4% for the sixthree months ended June 30, 2021, which was lower than the 15% result during the same period in 2020 primarily due to approximately $13 million of higher COVID-19 net life claims in the current period. Additionally, this division will see a decrease in underwriting margin as a percent of premium for the full year 2021 due to higher policy obligations incurred as a result of the pandemic.March 31, 2022 and 2021.

The Liberty National Division markets individual life insurance to middle-income household and worksite customers. Recent investments in new sales technologies as well as recent growth in middle management within the agency are expected to help continue this growth. The underwriting margin as a percent of premium was 17% for the sixthree months ended June 30, 2021, downMarch 31, 2022, up from 26%13% during the same period a year ago. The decreaseThis increase is primarily attributable to higherlower net policy obligations in relation to premium during the sixthree months ended June 30, 2021 as a result of the COVID-19 pandemicMarch 31, 2022 compared with the same period a year ago. This division incurred $9$4 million of COVID-19 net life claims, representing approximately 5% of premium, for the sixthree months ended June 30, 2021March 31, 2022 compared with 2,063$8 million for the same period in 2020. With the division's ability to return to face-to-face customer interaction and the option of virtual sales, the Company is projecting total net life sales to increase for the full year 2021 as compared to the prior year. However, due to increased policy obligations expected to be incurred associated with the pandemic, we anticipate the underwriting margin, as a percent of premium, to be slightly lower for the full year 2021 as compared to 2020.

2021.


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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

Net sales rose 7% in the three months ended March 31, 2022 over the same period in 2021. With the division's ability to return to face-to-face customer interaction and the option of virtual sales, the Company continues to project total net life sales to increase for the remainder of 2022 as compared to the prior year.

Below is the average producing agent count at the end of the period for Liberty National Division. As the division gains momentum in the virtual sales environment, the agency should see an increase in recruiting of new agents.
At June 30,Change
20212020Amount%
Liberty National2,717 2,522 195 8 
At March 31,Change
20222021Amount%
Liberty National2,656 2,734 (78)(3)

The Liberty National Division average producing agent count increased 8% overdecreased 3% compared with the prior yearprior-year comparable period. We continue to execute our long-term plan to grow this agency through expansion from small-town markets in the Southeast to more densely populated areas with larger pools of potential agent recruits and customers. Continued geographic expansion of this agency'sagency’s presence into more heavily populated, less-penetrated areas will help create long-term agency growth. Additionally, the agency continues to help improve the ability of agents to develop new worksite marketing business. Systems that have been put in place, including the addition of a customer relationship management (CRM)CRM platform and enhanced analytical capabilities, have helped the agents develop additional worksite marketing opportunities as well as improve the productivity of agents selling in the individual life market. Sales were hinderedAs the division continues to gain momentum in its sales and recruiting initiatives and advances its technology and CRM platform, the agency anticipates an increase in recruiting of new agents and an increase in the first half of 2020 due to difficulties in agents transitioning to a virtual work environment after the onset of the COVID-19 lockdown, as well as mandatory shut-downs of non-essential small businesses which hindered the ability of the division’s agents to prospect at the worksite.average producing agent count.

The Other Agencies distribution channels primarily include non-exclusive independent agencies.agencies selling predominantly life insurance. The Other Agencies contributed $107$53 million of life premium income, or 7% of Globe Life's total premium income in the sixthree months ended June 30, 2021,March 31, 2022, and contributed 2% of net sales for the period.

HEALTH INSURANCE

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

Health premium accounted for 29%30% of our total premium in the first six months of 2021,2022, while the health underwriting margin accounted for 31%34% of total underwriting margin. Health underwriting margin increased 15%10% to $147$79 million primarily due to improved persistency and lower amortization of acquisition costs.higher premium growth. The Company continues to emphasize life insurance sales relative to health due to life’s superior long-term profitability and its greater contribution to excess investment income.

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Management's Discussion & Analysis


The following table presents underwriting margin data for health insurance.

Health Insurance
Summary of Results
(Dollar amounts in thousands)
Six Months Ended June 30,Change Three Months Ended March 31,Change
20212020 20222021
Amount% of
Premium		Amount% of
Premium		Amount% Amount% of
Premium		Amount% of
Premium		Amount%
PremiumPremium$589,759 100 $563,082 100 $26,677 5 Premium$317,000 100 $294,173 100 $22,827 8 
Policy obligationsPolicy obligations376,683 64 362,207 64 14,476 4 Policy obligations196,855 62 187,829 64 9,026 5 
Required interest on reservesRequired interest on reserves(50,429)(9)(45,361)(8)(5,068)11 Required interest on reserves(26,865)(8)(24,995)(9)(1,870)7 
Net policy obligationsNet policy obligations326,254 55 316,846 56 9,408 3 Net policy obligations169,990 54 162,834 55 7,156 4 
Commissions, premium taxes, and non-deferred acquisition expensesCommissions, premium taxes, and non-deferred acquisition expenses46,486 8 48,551 9 (2,065)(4)Commissions, premium taxes, and non-deferred acquisition expenses28,602 9 22,990 8 5,612 24 
Amortization of acquisition costsAmortization of acquisition costs70,378 12 69,980 12 398 1 Amortization of acquisition costs39,315 12 36,169 12 3,146 9 
Total expenseTotal expense443,118 75 435,377 77 7,741 2 Total expense237,907 75 221,993 75 15,914 7 
Insurance underwriting margin
Insurance underwriting margin
$146,641 25 $127,705 23 $18,936 15 
Insurance underwriting margin
$79,093 25 $72,180 25 $6,913 10 

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

Health Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		 Three Months Ended March 31,Increase
(Decrease)
20212020 20222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
United AmericanUnited American$233,304 40 $222,944 40 $10,360 5 United American$132,664 42 $117,087 40 $15,577 13 
Family HeritageFamily Heritage168,347 29 154,970 27 13,377 9 Family Heritage89,540 28 83,335 28 6,205 7 
Liberty NationalLiberty National94,158 16 95,031 17 (873)(1)Liberty National47,186 15 47,040 16 146 — 
American IncomeAmerican Income56,140 9 51,281 9 4,859 9 American Income28,854 9 27,351 9 1,503 5 
Direct to ConsumerDirect to Consumer37,810 6 38,856 7 (1,046)(3)Direct to Consumer18,756 6 19,360 7 (604)(3)
Total
Total
$589,759 100 $563,082 100 $26,677 5 
Total
$317,000 100 $294,173 100 $22,827 8 

Premium related to limited-benefit plans comprise $308$173 million, or 52%54%, of the total health premiums for 20212022 compared with $289$152 million in the same period in the prior year. Premium from Medicare Supplement products comprises the remaining $282$144 million, or 48%,46% for 20212022 compared with $274$142 million, or 48% in the same period in the prior year.

Annualized health premium in force was $1.29 billion at June 30, 2021 increased 4% to $1.2March 31, 2022, an increase of 9% over $1.18 billion over the priora year total.earlier.


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Globe Life Inc.
Management's Discussion & Analysis

Presented below is a table of health net sales by distribution channel.
 
Health Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		 Three Months Ended March 31,Increase
(Decrease)
20212020 20222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
United AmericanUnited American$25,027 30 $26,465 35 $(1,438)(5)United American$12,970 30 $12,945 33 $25 — 
Family HeritageFamily Heritage34,744 42 29,845 39 4,899 16 Family Heritage18,602 43 15,579 39 3,023 19 
Liberty NationalLiberty National12,053 15 10,032 13 2,021 20 Liberty National6,214 15 5,839 15 375 6 
American IncomeAmerican Income9,277 11 8,440 11 837 10 American Income4,621 11 4,611 12 10 — 
Direct to ConsumerDirect to Consumer1,226 2 1,112 2 114 10 Direct to Consumer421 1 642 1 (221)(34)
Total
Total
$82,327 100 $75,894 100 $6,433 8 
Total
$42,828 100 $39,616 100 $3,212 8 

Health net sales related to limited-benefit plans comprise $56$31 million, or 68%72%, of the total health net sales for 2021,2022, compared with $48$26 million in the same period in the prior year. Medicare Supplement sales make up the remaining $26$12 million, or 32%28% for 2021,2022, compared with $27$14 million, or 34% in the same period in the prior year.

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

 Health Insurance
First-Year Collected Premium by Distribution Channel
(Dollar amounts in thousands)
Six Months Ended June 30,Increase
(Decrease)		 Three Months Ended March 31,Increase
(Decrease)
20212020 20222021
Amount% of TotalAmount% of TotalAmount%Amount% of TotalAmount% of TotalAmount%
United AmericanUnited American$28,702 37 $39,853 46 $(11,151)(28)United American$14,762 37 $14,306 37 $456 3 
Family HeritageFamily Heritage28,165 36 26,584 30 1,581 6 Family Heritage14,668 37 13,811 36 857 6 
Liberty NationalLiberty National9,847 13 10,407 12 (560)(5)Liberty National5,444 13 4,815 13 629 13 
American IncomeAmerican Income9,334 12 8,951 10 383 4 American Income4,323 11 4,587 12 (264)(6)
Direct to ConsumerDirect to Consumer1,581 2 1,508 2 73 5 Direct to Consumer691 2 759 2 (68)(9)
Total
Total
$77,629 100 $87,303 100 $(9,674)(11)
Total
$39,888 100 $38,278 100 $1,610 4 
 
First-year collected premium related to limited-benefit plans comprises $47comprise $26 million, or 61%65%, of total first-year collected premium, for 20212022 compared with $46$23 million in the same period in the prior year. First-year collected premium from Medicare Supplement policies makes up the remaining $30$14 million, or 39%,35% for 2021,2022, compared with $41$15 million, or 39% in the same period in the prior year.

A discussion of health operations by distribution channel follows.
The United American Division consists of non-exclusive independent agencies who may also sell for other companies. The United American Division was Globe Life's largest health agency in terms of health premium income.
This division is also Globe Life's largest producer of Medicare Supplement insurance. The United American Division represents 81%82% of all Medicare Supplement premium and 95%96% of Medicare Supplement net sales. For the sixthree months ended June 30, 2021,March 31, 2022, Medicare Supplement premium in this agency rose 5%4% to $229$119 million in 20212022 over the prior period total of $218$115 million. Medicare Supplement net sales declined 6%10% to $25$12 million in 20212022 from the prior year period, primarily as a result of a decrease in individual sales. Underwriting margin as a percent of premium was 16%15% for the sixthree months ended June 30, 2021, upMarch 31, 2022, down from 14%16% in 2020.2021.

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Globe Life Inc.
Management's Discussion & Analysis

The Family Heritage Division primarily markets limited-benefit supplemental health insurance in non-urban areas. Most of its policies include a cash-back feature, such as a return of premium, where any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium was 26%27% for the sixthree months ended June 30, 2021,March 31, 2022, up from 25%26% in the year-ago period primarily due to improved persistency and lower acquisition costs.period.
The division experienced a 16%19% increase in net health sales as compared with the six-monththree-month period a year ago, primarily due to an increase in agent productivity and training. The division will be launchingcontinue to launch incentive programs during the year to help drive an increase in productivity and the number of producing agents.

Below is the average producing agent count at the end of the period for the Family Heritage Division. While the agency has seen a decrease in agent count as compared with 2021, we anticipate that as COVID-19 and the job market stabilizes, agent recruitment opportunities should increase.
At June 30,Change
20212020Amount%
Family Heritage Division1,253 1,238 15 1 

At March 31,Change
20222021Amount%
Family Heritage Division1,100 1,285 (185)(14)

The Liberty National Division represented 16%15% of all Globe Life health premium income at $47 million for the six-monththree-month period ended June 30, 2021.March 31, 2022. The Liberty National Division markets limited-benefit supplemental health products, consisting primarily of critical illness insurance. Much of thisLiberty National's health business is now generated through worksite marketing targeting small businesses of 10 to 100 employees. Health premium at Liberty National Division was $94$47 million for the sixthree months ended June 30, 2021, down from $95March 31, 2022, and 2021. Liberty National's first-year collected premium rose 13% to $5.4 million in the year ago period.three months ended March 31, 2022 compared with $4.8 million for the same period in 2021. Health net sales for the three months ended March 31, 2022 rose 6% from the comparable period in 2021. We anticipate an increase in net health sales going forward at this division as the Company isbecomes more able to interact face-to-face with customers compared with 2020.customers.

Other distribution.Distribution. While some of theThe Company's other distribution channels, while primarily focused on selling life insurance, also market health products, their main emphasis is on life insurance. On a combined basis, they accounted for 15% of health premium in 2021 and 16% in 2020.products. The American Income Life Division primarily markets accident plans. The Direct to Consumer Division primarily markets primarily Medicare Supplements to employer or union-sponsored groups. The DirectOn a combined basis, these other channels accounted for 15% of health premium for the three months ended March 31, 2022 compared to Consumer Division added $1 million of Medicare Supplement net sales as of June 30, 2021 and 2020. 16% for the same period in 2021.

ANNUITIES

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


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Globe Life Inc.
Management's Discussion & Analysis

INVESTMENTS

We manage our capital resources including investments, debt, and cash flow through the investment segment. Excess investment income represents the profit margin attributable to investment operations and is the measure that we use to evaluate the performance of the investment segment as described in Note 10—Business Segments.Segments. It is defined as net investment income less both the required interest on net insurance policy liabilities and the interest cost associated with capital funding or “financing costs.”

Management also views excess investment income per diluted common share as an important and useful measure to evaluate the performance of the investment segment. It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company. Since implementing our share repurchase program in 1986, we have used $8.4$8.8 billion of excess cash flow at the Parent Company to repurchase Globe Life Inc. common shares after determining that the repurchases provided a greater risk adjusted after-tax return than other investment alternatives. If we had not used this excess cash to repurchase shares, but had instead invested it in interest-bearing assets, we would have earned more investment income and had more shares outstanding. As excess investment income per diluted common share incorporates all capital resources, we view excess investment income per diluted common share as a useful measure to evaluate the investment segment.

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

Analysis of Excess Investment Income
(Dollar amounts in thousands, except for per share data) 
 
Six Months Ended
June 30,		ChangeThree Months Ended
March 31,		Change
20212020Amount%20222021Amount%
Net investment incomeNet investment income$474,128 $460,559 $13,569 3 Net investment income$243,834 $235,820 $8,014 3 
Interest on net insurance policy liabilities:Interest on net insurance policy liabilities:Interest on net insurance policy liabilities:
Interest on reservesInterest on reserves(432,870)(410,562)(22,308)5 Interest on reserves(226,246)(214,925)(11,321)5 
Interest on deferred acquisition costsInterest on deferred acquisition costs122,192 117,498 4,694 4 Interest on deferred acquisition costs63,748 60,827 2,921 5 
Net required interestNet required interest(310,678)(293,064)(17,614)6 Net required interest(162,498)(154,098)(8,400)5 
Financing costsFinancing costs(42,947)(43,621)674 (2)Financing costs(19,944)(21,178)1,234 (6)
Excess investment income
Excess investment income
$120,503 $123,874 $(3,371)(3)
Excess investment income
$61,392 $60,544 $848 1 
Excess investment income per diluted share
Excess investment income per diluted share
$1.15 $1.15 $— — 
Excess investment income per diluted share
$0.61 $0.58 $0.03 5 
Mean invested assets (at amortized cost)Mean invested assets (at amortized cost)$18,748,877 $17,700,476 $1,048,401 6 Mean invested assets (at amortized cost)$19,457,487 $18,646,061 $811,426 4 
Average net insurance policy liabilities(1)
Average net insurance policy liabilities(1)
10,838,913 10,328,750 510,163 5 
Average net insurance policy liabilities(1)
11,233,749 10,775,618 458,131 4 
Average debt and preferred securities (at amortized cost)Average debt and preferred securities (at amortized cost)1,966,285 1,726,718 239,567 14 Average debt and preferred securities (at amortized cost)2,130,025 1,939,394 190,631 10 
(1)Net of deferred acquisition costs, excluding the associated unrealized gains and losses thereon.
Excess investment income declined $3 million,increased $848 thousand, or 3%1%, compared with the year-ago period. Excess investment income per diluted common share was $1.15$0.61 for both periods.the three months ended March 31, 2022 an increase of 5% over the prior year period. Excess investment income per diluted common share generally increases at a faster pace than excess investment income because the number of diluted shares outstanding generally decreases from year to year as a result of our share repurchase program.

Net investment income for the sixthree months ended June 30, 2021March 31, 2022 was $474$244 million or 3% greater than the year agoyear-ago period. Mean invested assets increased 6%4% during the first sixthree months of 20212022 over the same period last year. The effective annual yield rate earned on the fixed maturity portfolio was 5.24%5.15% in the first sixthree months of 2021,2022, compared with 5.38%5.24% a year earlier. Growth in net investment income has been negatively impacted in recent years by the low interest rate environment during which time we have invested new money at yields lower than our average portfolio yield. In addition, we have reinvested the proceeds from bonds that matured, were called, or were otherwise

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Globe Life Inc.
Management's Discussion & Analysis

average portfolio yield. In addition, we have reinvested the proceeds from bonds that matured, were called, or were otherwise disposed of at yield rates less than what wethe yield rate earned on these bonds before their maturity or disposition.disposed bonds. We currently expect that the average annual turnover rate of fixed maturity assets will be less than 2% over the next five years and will not have a material negative impact on net investment income. To help mitigate the decline of the portfolio yield over the past few years,In addition to fixed maturities, the Company has increased its position in investment funds to fixed maturity assets by investingalso invested in limited partnerships with debt like characteristics that diversify risk and enhance risk adjusted capital adjustedrisk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the fund investmentsinvestment funds for the sixthree months ended June 30, 2021March 31, 2022 was 5.42%6.28%. See additional information in Note 4—Investments.

Should the current low interest rate environment continue, the growth of the Company's net investment income will continue to be negatively impacted primarily due to the investment of new money and proceeds from dispositions at rates less than the average portfolio yield rate. While net investment income would grow, it would continue to grow at rates less than the growth in mean invested assets. For 2021,the full year 2022, we currently anticipate the average new money yieldrate on our fixed maturity acquisitions to be approximately 3090 basis points lowerhigher than the yield achieved on our 2021 acquisitions. This expected increase in yields should result in the investment income growth rate applicablebeing closer to the growth of our 2020 acquisitions.invested assets.

Should interest rates, especially long-term rates, rise, Globe Life's net investment income would benefit due to higher interest rates on new investments. While such a rise in interest rates could adversely affect the fair value of the fixed maturities portfolio, we could withstand an increase in interest rates of approximately 15055 to 15560 basis points before the net unrealized gains on our fixed maturity portfolio as of June 30, 2021March 31, 2022 would be eliminated. Should interest rates increase further, we would not be concerned with potential interest rate driven unrealized losses in our fixed maturity portfolio because we do not generally intend to sell, nor is it likely that management will be required to sell, the fixed maturities prior to their anticipated recovery.

Required interest on net insurance policy liabilities reduces net investment income, as it is the amount of net investment income considered by management necessary to “fund” required interest on net insurance policy liabilities, which is the net of the benefit reserve liability and the deferred acquisition cost asset. As such, it is removed from the investment segment and applied to the insurance segments to offset the effect of the required interest from the insurance segments. As discussed in Note 10—Business Segments, management regards this as a more meaningful analysis of the investment and insurance segments. Required interest is based on the actuarial interest assumptions used in discounting the benefit reserve liability and the amortization of deferred acquisition costs for our insurance policies in force.

The great majority of our life and health insurance policies are fixed interest rate protection policies, not investment products, and are accounted for under current GAAP accounting guidance for long-duration insurance products which mandate that interest rate assumptions for a particular block of business be “locked in” for the life of that block of business. Each calendar year, we set the discount rate to be used to calculate the benefit reserve liability and the amortization of the deferred acquisition cost asset for all insurance policies issued that year. That rate is based on the new money yields that we expect to earn on cash flow received in the future from policies of that issue year and cannot be changed. The discount rate used for policies issued in the current year has no impact on the in force policies issued in prior years as the rates of all prior issue years are also locked in. As such, the overall discount rate for the entire in force block of 5.7%5.8% is a weighted average of the discount rates being used from all issue years. Changes in the overall weighted-average discount rate over time are caused by changes in the mix of the reserves and the deferred acquisition cost asset by issue year on the entire block of in force business. Business issued in the current year has very little impact on the overall weighted-average discount rate due to the size of our in force business.

Since actuarial discount rates are locked in for life on essentially all of our business, benefit reserves and deferred acquisition costs are not affected by interest rate fluctuations unless a loss recognition event occurs. Due to the strength of our underwriting margins, we do not expect an extended low interest rate environment will cause a loss recognition event.

In comparison to the year-ago period, required interest on net insurance policy liabilities increased $18$8 million, or 6%5%, to $311$162 million, compared with the 5%4% growth in average net interest-bearing insurance policy liabilities.


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Globe Life Inc.
Management's Discussion & Analysis

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

Analysis of Financing Costs
(Dollar amounts in thousands)
Six Months Ended
June 30,		Increase
(Decrease)		Three Months Ended
March 31,		Increase
(Decrease)
20212020Amount%20222021Amount%
Interest on funded debtInterest on funded debt$40,126 $34,984 $5,142 15 Interest on funded debt$18,644 $19,746 $(1,102)(6)
Interest on term loans— 2,870 (2,870)(100)
Interest on short-term debtInterest on short-term debt2,821 5,767 (2,946)(51)Interest on short-term debt1,300 1,432 (132)(9)
Financing costs
Financing costs
$42,947 $43,621 $(674)(2)
Financing costs
$19,944 $21,178 $(1,234)(6)


In 2021,During the first three months of 2022, financing costs decreased 2%6% compared with the prior year primarily due to lower overall rates on the short-term debt. The interest on funded debt was higher than prior year as a result of the 2.15% Senior Note issued in August 2021. The debt proceeds were used, in part, to redeem all the outstanding term loans. The net increase in interest was more than offset by lower interest rates on the short-term debt. More information on our debt transactions is disclosed in the Financial Condition section of this report.

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Globe Life Inc.
Management's Discussion & Analysis


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

Despite our insurance liabilities. From timeintent to hold fixed maturity investments for a long period of time, investments are occasionally sold, orexchanged, called, or experience a credit loss event, each of which resultsresulting in a realized gain or loss. These sales are often in response to deterioration in credit quality of the issuer in effort to maximize risk-adjusted, capital-adjusted returns. We do not engage in trading investments for profit. Therefore, gains or losses, which occur in protecting the portfolio or its yield or which result from events that are beyond our control, are only secondary to our core insurance operations of providing insurance coverage to policyholders. In a bond exchange offer, bondholders may consent to exchange their existing bonds for another class of debt securities. The Company also elects to measure its investmenthas investments in certain limited partnerships, at fair value in accordance withheld under the fair value option, for financial instruments with fair value changes recognized in Realized gains (losses) in the Condensed Consolidated Statements of Operations.

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

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

Analysis of Realized Gains (Losses), Net of Tax
(Dollar amounts in thousands, except for per share data)
Six Months Ended June 30, Three Months Ended March 31,
20212020 20222021
AmountPer ShareAmountPer Share AmountPer ShareAmountPer Share
Fixed maturities:Fixed maturities:Fixed maturities:
SalesSales$(8,664)$(0.08)$1,794 $0.02 Sales$(2,295)$(0.02)$(8,599)$(0.08)
Matured or other redemptions(1)
Matured or other redemptions(1)
21,548 0.21 6,787 0.06 
Matured or other redemptions(1)
5,889 0.06 20,800 0.20 
Provision for credit lossesProvision for credit losses2,643 0.02 (25,848)(0.24)Provision for credit losses306 — 2,643 0.02 
Fair value option—change in fair valueFair value option—change in fair value9,818 0.09 (14,892)(0.14)Fair value option—change in fair value(4,217)(0.04)7,809 0.07 
OtherOther3,736 0.04 7,758 0.07 Other(5,406)(0.06)(413)— 
Total realized gains (losses)Total realized gains (losses)$29,081 $0.28 $(24,401)$(0.23)Total realized gains (losses)$(5,723)$(0.06)$22,240 $0.21 
(1)During the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, the Company recorded $108.3 million$0 and $86.3$85.8 million of exchanges of fixed maturity securities (noncash transactions) that resulted in $19.9 million$0 and $6.2$19.9 million, respectively in realized gains, net of tax.

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Globe Life Inc.
Management's Discussion & Analysis


Investment Acquisitions. Globe Life's investment policy calls for investing primarily in investment grade fixed maturities that meet our quality and yield objectives. We generally prefer to invest in securities with longer maturities because they more closely match the long-term nature of our policy liabilities. We believe this strategy is appropriate since our expected future cash flows are generally stable and predictable and the likelihood that we will need to sell invested assets to raise cash is low. If longer-term securities that meet our quality and yield objectives are not available, we do not compromise on our quality objectives; instead, we consider investing in shorter-term or lower-yielding securities taking into consideration the slope of the yield curve and other factors such as risk adjusted capital adjusted returns.

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


Fixed Maturity Acquisitions Selected Information
(Dollar amounts in thousands)
Six Months Ended
June 30,		Three Months Ended
March 31,
20212020 20222021
Cost of acquisitions:Cost of acquisitions:Cost of acquisitions:
Investment-grade corporate securitiesInvestment-grade corporate securities$339,711 $349,933 Investment-grade corporate securities$187,324 $260,002 
Investment-grade municipal securitiesInvestment-grade municipal securities65,068 194,680 Investment-grade municipal securities163,891 33,228 
Other investment-grade securitiesOther investment-grade securities10,355 18,174 Other investment-grade securities— 5,619 
Total fixed maturity acquisitions(1)
Total fixed maturity acquisitions(1)
$415,134 $562,787 
Total fixed maturity acquisitions(1)
$351,215 $298,849 
Effective annual yield (one year compounded)(2)
Effective annual yield (one year compounded)(2)
3.49 %4.16 %
Effective annual yield (one year compounded)(2)
3.97 %3.41 %
Average life (in years, to next call)Average life (in years, to next call)29.5 15.7 Average life (in years, to next call)15.8 29.6 
Average life (in years, to maturity)Average life (in years, to maturity)34.2 24.4 Average life (in years, to maturity)26.9 33.7 
Average ratingAverage ratingAAAverage ratingAA
(1)Fixed maturity acquisitions included no unsettled trades as of June 30, 2021$12 million in 2022 and 2020.$3 million in 2021.
(2)Tax-equivalent basis, where the yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.

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

Acquisitions in both periods consisted primarily of corporate and municipal bonds with securities spanning a diversified range of issuers, industry sectors, and geographical regions. In the first sixthree months of 2021,2022, we invested primarily in the industrialmunicipal, financial and financialindustrial sectors. For the entire portfolio, the taxable equivalent effective yield earned was 5.24%5.15%, down approximately 149 basis points from the yield in the first sixthree months of 2020.2021. As previously noted in the discussion of net investment income, the decrease was primarily due to the combination of lower interest rates applicable to new purchases and fixed maturity dispositions during 2020.dispositions. For the remainder of 2021,2022, the Company will continue to execute on its existing strategy by seeking to invest in assets that satisfy our quality and other objectives, while maximizing the highest risk adjusted capital adjustedrisk-adjusted capital-adjusted return.



49
51
GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

In 2017, it was announced by the head of the United Kingdom's Financial Conduct Authority of its plan to phase out the floating rate, London Interbank Offered Rate (LIBOR). The rate will transition out from 2021 to mid-year 2023. As of June 30, 2021, the Company had limited assets and liabilities that utilize LIBOR as a benchmark rate. We will continue to monitor the progress toward the establishment of a new floating rate.

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

Selected information concerning the fixed maturity portfolio is as follows:

Fixed Maturity Portfolio Selected Information
AtAt
June 30,
2021		December 31, 2020June 30,
2020		March 31,
2022		December 31, 2021March 31,
2021
Average annual effective yield(1)
Average annual effective yield(1)
5.23%5.28%5.36%
Average annual effective yield(1)
5.15%5.17%5.24%
Average life, in years, to:Average life, in years, to:Average life, in years, to:
Next call(2)
Next call(2)
16.016.216.5
Next call(2)
15.515.716.2
Maturity(2)
Maturity(2)
18.919.019.0
Maturity(2)
18.919.019.0
Effective duration to:Effective duration to:Effective duration to:
Next call(2,3)
Next call(2,3)
10.811.010.9
Next call(2,3)
10.010.610.6
Maturity(2,3)
Maturity(2,3)
12.112.312.0
Maturity(2,3)
11.512.211.9
(1)Tax-equivalent basis. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.
(2)Globe Life calculates the average life and duration of the fixed maturity portfolio two ways:
(a) based on the next call date which is the next call date for callable bonds and the maturity date for noncallable bonds, and
(b) based on the maturity date of all bonds, whether callable or not.
(3)Effective duration is a measure of the price sensitivity of a fixed-income security to a 1% change in interest rates.


50
52
GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

Credit Risk Sensitivity. The following tables summarize certain information about the major corporate sectors and security types held in our fixed maturity portfolio at June 30, 2021March 31, 2022 and December 31, 2020.2021.

Fixed Maturities by Sector
June 30, 2021March 31, 2022
(Dollar amounts in thousands)
Below Investment GradeTotal Fixed Maturities% of Total Fixed MaturitiesBelow Investment GradeTotal Fixed Maturities% of Total Fixed Maturities
Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized Cost, netAt Fair Value Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized Cost, netAt Fair Value
Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost, net		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized Cost, netAt Fair Value
Corporates:Corporates:Corporates:
FinancialFinancialFinancial
Insurance - life, health, P&CInsurance - life, health, P&C$57,565 $3,825 $(7,256)$54,134 $2,314,258 $524,585 $(8,109)$2,830,734 13 13 Insurance - life, health, P&C$57,421 $1,954 $(4,893)$54,482 $2,368,933 $252,627 $(33,048)$2,588,512 13 13 
BanksBanks26,997 753 — 27,750 969,497 216,103 (2,489)1,183,111 6 6 Banks26,971 1,835 — 28,806 1,019,590 97,441 (10,002)1,107,029 6 6 
Other financialOther financial114,949 156 (1,955)113,150 1,239,063 192,820 (3,022)1,428,861 7 7 Other financial93,652 1 (7,781)85,872 1,267,845 69,711 (40,758)1,296,798 7 7 
Total financialTotal financial199,511 4,734 (9,211)195,034 4,522,818 933,508 (13,620)5,442,706 26 26 Total financial178,044 3,790 (12,674)169,160 4,656,368 419,779 (83,808)4,992,339 26 26 
UtilitiesUtilitiesUtilities
ElectricElectric49,494 5,857 (87)55,264 1,415,411 414,324 (311)1,829,424 8 9 Electric36,281 1,349 (405)37,225 1,369,668 210,650 (4,851)1,575,467 8 8 
Gas and waterGas and water— — — — 543,962 115,642 (591)659,013 3 3 Gas and water— — — — 543,432 41,045 (5,422)579,055 3 3 
Total utilitiesTotal utilities49,494 5,857 (87)55,264 1,959,373 529,966 (902)2,488,437 11 12 Total utilities36,281 1,349 (405)37,225 1,913,100 251,695 (10,273)2,154,522 11 11 
Industrial - EnergyIndustrial - EnergyIndustrial - Energy
PipelinesPipelines85,275 5,106 (1,449)88,932 921,382 209,567 (1,449)1,129,500 5 5 Pipelines85,194 3,079 (5,800)82,473 918,164 95,774 (11,147)1,002,791 5 5 
Exploration and productionExploration and production100,698 18,279 — 118,977 568,872 113,638 (403)682,107 3 3 Exploration and production— — — — 529,934 60,030 (8,443)581,521 3 3 
Oil field servicesOil field services— — — — 49,788 14,464 — 64,252 — — Oil field services— — — — 49,773 8,279 — 58,052 — — 
Refiner— — — — 89,204 27,131 — 116,335 1 1 
Driller— — — — — — — — — — 
RefineryRefinery— — — — 88,944 14,251 (11)103,184 1 1 
Total energyTotal energy185,973 23,385 (1,449)207,909 1,629,246 364,800 (1,852)1,992,194 9 9 Total energy85,194 3,079 (5,800)82,473 1,586,815 178,334 (19,601)1,745,548 9 9 
Industrial - Basic materialsIndustrial - Basic materialsIndustrial - Basic materials
ChemicalsChemicals— — — — 669,278 142,568 (83)811,763 4 4 Chemicals— — — — 673,481 54,933 (7,239)721,175 4 4 
Metals and miningMetals and mining— — — — 406,359 129,374 — 535,733 3 3 Metals and mining— — — — 364,405 70,193 (495)434,103 2 2 
Forestry products and paperForestry products and paper— — — — 65,675 17,426 — 83,101 — — Forestry products and paper— — — — 65,574 6,398 — 71,972 — 1 
Total basic materialsTotal basic materials— — — — 1,141,312 289,368 (83)1,430,597 7 7 Total basic materials— — — — 1,103,460 131,524 (7,734)1,227,250 6 7 
Industrial - Consumer, non-cyclicalIndustrial - Consumer, non-cyclical84,275 10,900 (2,133)93,042 2,224,277 481,449 (2,458)2,703,268 13 13 Industrial - Consumer, non-cyclical21,321 — (4,082)17,239 2,229,773 177,589 (20,997)2,386,365 12 13 
Other industrialsOther industrials25,614 3,729 — 29,343 1,275,891 296,869 (228)1,572,532 7 8 Other industrials25,539 1,554 — 27,093 1,252,491 125,300 (7,963)1,369,828 7 7 
Industrial - TransportationIndustrial - Transportation25,668 5,126 — 30,794 570,150 143,130 — 713,280 3 3 Industrial - Transportation8,057 79 — 8,136 539,199 67,424 (781)605,842 3 3 
Other corporate sectorsOther corporate sectors143,317 19,024 (3,442)158,899 1,627,685 296,684 (8,485)1,915,884 10 9 Other corporate sectors179,161 7,520 (6,351)180,330 1,718,758 106,557 (52,725)1,772,590 10 9 
Total corporatesTotal corporates713,852 72,755 (16,322)770,285 14,950,752 3,335,774 (27,628)18,258,898 86 87 
Total corporates
533,597 17,371 (29,312)521,656 14,999,964 1,458,202 (203,882)16,254,284 84 85 
Other fixed maturities:Other fixed maturities:Other fixed maturities:
Government (U.S., municipal, and foreign)Government (U.S., municipal, and foreign)— — — — 2,343,770 313,750 (4,531)2,652,989 13 12 Government (U.S., municipal, and foreign)— — — — 2,837,889 130,600 (204,119)2,764,370 15 14 
Collateralized debt obligationsCollateralized debt obligations36,288 28,119 — 64,407 36,288 28,119 — 64,407 — — Collateralized debt obligations36,310 23,228 — 59,538 36,310 23,228 — 59,538 — — 
Other asset-backed securitiesOther asset-backed securities13,800 — (838)12,962 120,801 5,192 (847)125,146 1 1 Other asset-backed securities13,362 — (260)13,102 101,041 481 (829)100,693 1 1 
Mortgage-backed securities(1)
Mortgage-backed securities(1)
— — — — 307 33 — 340 — — 
Mortgage-backed securities(1)
— — — — 206 16 — 222 — — 
Total fixed maturitiesTotal fixed maturities$763,940 $100,874 $(17,160)$847,654 $17,451,918 $3,682,868 $(33,006)$21,101,780 100 100 
Total fixed maturities
$583,269 $40,599 $(29,572)$594,296 $17,975,410 $1,612,527 $(408,830)$19,179,107 100 100 
(1)Includes Government National Mortgage Association (GNMA).




51
53
GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

Fixed Maturities by Sector
December 31, 20202021
(Dollar amounts in thousands)
Below Investment GradeTotal Fixed Maturities% of Total Fixed MaturitiesBelow Investment GradeTotal Fixed Maturities% of Total Fixed Maturities
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized CostAt Fair Value Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized Cost, netAt Fair Value
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		At Amortized Cost, netAt Fair Value
Corporates:Corporates:Corporates:
FinancialFinancialFinancial
Insurance - life, health, P&CInsurance - life, health, P&C$57,658 $3,894 $(10,788)$50,764 $2,275,843 $563,349 $(14,769)$2,824,423 13 13 Insurance - life, health, P&C$57,470 $3,825 $(4,807)$56,488 $2,345,116 $513,844 $(5,553)$2,853,407 13 13 
BanksBanks27,014 15 (456)26,573 993,946 259,489 (1,050)1,252,385 6 6 Banks26,980 614 — 27,594 983,317 207,466 (1,635)1,189,148 6 6 
Other financialOther financial114,919 271 (8,245)106,945 1,134,414 193,975 (8,402)1,319,987 7 6 Other financial97,800 547 (1,103)97,244 1,240,340 186,431 (2,161)1,424,610 7 7 
Total financialTotal financial199,591 4,180 (19,489)184,282 4,404,203 1,016,813 (24,221)5,396,795 26 25 Total financial182,250 4,986 (5,910)181,326 4,568,773 907,741 (9,349)5,467,165 26 26 
UtilitiesUtilitiesUtilities
ElectricElectric50,663 6,289 — 56,952 1,438,796 476,744 (108)1,915,432 9 9 Electric36,284 3,888 — 40,172 1,388,094 382,892 (395)1,770,591 8 8 
Gas and waterGas and water— — — — 536,664 131,851 — 668,515 3 3 Gas and water— — — — 543,297 107,227 (617)649,907 3 3 
Total utilitiesTotal utilities50,663 6,289 — 56,952 1,975,460 608,595 (108)2,583,947 12 12 Total utilities36,284 3,888 — 40,172 1,931,391 490,119 (1,012)2,420,498 11 11 
Industrial - EnergyIndustrial - EnergyIndustrial - Energy
PipelinesPipelines85,327 1,624 (2,309)84,642 923,756 187,851 (2,423)1,109,184 5 5 Pipelines85,222 11,051 (1,445)94,828 918,746 203,324 (1,445)1,120,625 5 5 
Exploration and productionExploration and production104,719 5,980 (678)110,021 555,796 121,940 (678)677,058 3 3 Exploration and production33,316 4,890 — 38,206 530,336 105,604 (238)635,702 3 3 
Oil field servicesOil field services— — — — 49,799 13,613 — 63,412 — — Oil field services— — — — 49,778 13,653 — 63,431 — — 
Refiner— — — — 89,371 22,793 — 112,164 1 1 
Driller1,902 — 18 1,920 1,902 — 18 1,920 — — 
RefineryRefinery— — — — 89,032 24,199 — 113,231 1 1 
Total energyTotal energy191,948 7,604 (2,969)196,583 1,620,624 346,197 (3,083)1,963,738 9 9 Total energy118,538 15,941 (1,445)133,034 1,587,892 346,780 (1,683)1,932,989 9 9 
Industrial - Basic materialsIndustrial - Basic materialsIndustrial - Basic materials
ChemicalsChemicals— — — — 642,258 152,016 — 794,274 4 4 Chemicals— — — — 673,699 145,114 (50)818,763 4 4 
Metals and miningMetals and mining— — — — 406,564 144,110 — 550,674 2 3 Metals and mining— — — — 405,915 118,115 — 524,030 2 3 
Forestry products and paperForestry products and paper— — — — 88,804 21,588 — 110,392 1 1 Forestry products and paper— — — — 65,608 15,946 — 81,554 — — 
Total basic materialsTotal basic materials— — — — 1,137,626 317,714 — 1,455,340 7 8 Total basic materials— — — — 1,145,222 279,175 (50)1,424,347 6 7 
Industrial - Consumer, non-cyclicalIndustrial - Consumer, non-cyclical96,265 8,680 (1,903)103,042 2,233,324 576,007 (2,070)2,807,261 13 13 Industrial - Consumer, non-cyclical84,106 13,059 (2,697)94,468 2,256,802 475,012 (3,397)2,728,417 13 13 
Other industrialsOther industrials25,661 3,925 — 29,586 1,260,646 328,986 (6)1,589,626 7 7 Other industrials25,565 3,182 — 28,747 1,254,243 286,889 (589)1,540,543 7 7 
Industrial - TransportationIndustrial - Transportation25,777 4,315 — 30,092 566,935 175,405 — 742,340 3 3 Industrial - Transportation25,555 5,588 — 31,143 559,399 135,581 (38)694,942 3 3 
Other corporate sectorsOther corporate sectors179,878 17,459 (3,595)193,742 1,489,113 329,254 (4,142)1,814,225 9 9 Other corporate sectors179,323 21,807 (3,429)197,701 1,663,793 277,807 (9,288)1,932,312 9 9 
Total corporatesTotal corporates769,783 52,452 (27,956)794,279 14,687,931 3,698,971 (33,630)18,353,272 86 86 Total corporates651,621 68,451 (13,481)706,591 14,967,515 3,199,104 (25,406)18,141,213 84 85 
Other fixed maturities:Other fixed maturities:Other fixed maturities:
Government (U.S., municipal, and foreign)Government (U.S., municipal, and foreign)— — — — 2,313,855 341,176 (1,256)2,653,775 13 13 Government (U.S., municipal, and foreign)— — — — 2,695,796 304,537 (8,203)2,992,130 15 14 
Collateralized debt obligationsCollateralized debt obligations57,007 23,460 (8,869)71,598 57,007 23,460 (8,869)71,598 — — Collateralized debt obligations36,468 27,037 — 63,505 36,468 27,037 — 63,505 — — 
Other asset-backed securitiesOther asset-backed securities13,949 — (2,727)11,222 134,616 3,591 (3,778)134,429 1 1 Other asset-backed securities13,457 — (414)13,043 104,905 3,701 (430)108,176 1 1 
Mortgage-backed securities(1)
Mortgage-backed securities(1)
— — — — 390 45 — 435 — — 
Mortgage-backed securities(1)
— — — — 238 25 — 263 — — 
Total fixed maturitiesTotal fixed maturities$840,739 $75,912 $(39,552)$877,099 $17,193,799 $4,067,243 $(47,533)$21,213,509 100 100 Total fixed maturities$701,546 $95,488 $(13,895)$783,139 $17,804,922 $3,534,404 $(34,039)$21,305,287 100 100 
(1)Includes GNMAs.



52
54
GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the June 30, 2021March 31, 2022 fixed maturity portfolio, representing 86%84% of amortized cost, net and 87%85% of fair value. The remainder of the portfolio is invested primarily in securities issued by the U.S. government and U.S. municipalities. The Company holds insignificant amounts in foreign government bonds, collateralized debt obligations, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At June 30, 2021,March 31, 2022, the total fixed maturity portfolio consisted of 779876 issuers.

At June 30, 2021, fixedFixed maturities had a fair value of $21.1$19.2 billion at March 31, 2022, compared with $21.2$21.3 billion at December 31, 2020.2021. The net unrealized gain position in the fixed-maturity portfolio decreased from $4.0$3.5 billion at December 31, 20202021 to $3.6$1.2 billion at June 30, 2021March 31, 2022 due to an increase in market rates during the period.

For more information about our fixed maturity portfolio by component at June 30, 2021March 31, 2022 and December 31, 2020,2021, including a discussion of allowance for credit losses, an analysis of unrealized investment losses and a schedule of maturities, see Note 4—Investments.

An analysis of the fixed maturity portfolio by a composite quality rating at June 30, 2021March 31, 2022 and December 31, 20202021, is shown in the following tables. The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s ratings as assigned by Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, and Dominion Bond Rating Service, LTD. The ratings assigned by these four nationally recognized statistical rating organizations are evenly weighted when calculating the average. The composite quality rating is created utilizing a methodology developed by Globe Life using ratings from the various rating agencies noted above. The composite quality rating is not a Standard & Poor's credit rating. Standard & Poor's does not sponsor, endorse or promote the composite quality rating and shall not be liable for any use of the composite quality rating. Included in the following chart are private placement fixed maturity holdings of $567$519 million at amortized cost, net of allowance for credit losses ($611523 million at fair value) for which the ratings were assigned by the third-party managers.

Fixed Maturities by Rating
At June 30, 2021March 31, 2022
(Dollar amounts in thousands)
Amortized Cost, net% of TotalFair
Value		% of TotalAverage Composite Quality Rating on Amortized Cost, netAmortized Cost, net% of TotalFair
Value		% of TotalAverage Composite Quality Rating on Amortized Cost, net
Investment grade:Investment grade:Investment grade:
AAAAAA$736,648 4 $850,126 4 AAA$762,200 4 $784,358 4 
AAAA1,861,834 11 2,060,123 10 AA2,347,897 13 2,228,778 12 
AA4,422,833 26 5,559,919 26 A4,487,319 25 4,974,961 26 
BBB+BBB+3,784,244 22 4,669,494 22 BBB+3,901,821 22 4,272,763 22 
BBBBBB4,282,348 24 5,192,531 25 BBB4,285,247 24 4,603,423 24 
BBB-BBB-1,600,071 9 1,921,933 9 BBB-1,607,657 9 1,720,528 9 
Total investment grade
Total investment grade
16,687,978 96 20,254,126 96 A-
Total investment grade
17,392,141 97 18,584,811 97 A-
Below investment grade:Below investment grade:Below investment grade:
BBBB582,084 3 631,877 3 BB455,835 2 447,982 2 
BB145,568 1 151,370 1 B91,124 1 86,776 1 
Below BBelow B36,288 — 64,407 — Below B36,310 — 59,538 — 
Total below investment grade
Total below investment grade
763,940 4 847,654 4 BB-
Total below investment grade
583,269 3 594,296 3 BB-
$17,451,918 100 $21,101,780 100 $17,975,410 100 $19,179,107 100 
Weighted average composite quality rating
Weighted average composite quality rating
A-
Weighted average composite quality rating
A-



53
55
GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

Fixed Maturities by Rating
At December 31, 20202021
(Dollar amounts in thousands)
Amortized
Cost
% of Total
Fair
Value
% of TotalAverage Composite Quality Rating on Amortized Cost
Amortized
Cost
% of Total
Fair
Value
% of TotalAverage Composite Quality Rating on Amortized Cost
Investment grade:Investment grade:Investment grade:
AAAAAA$713,053 4 $848,621 4 AAA$761,526 4 $867,728 4 
AAAA1,657,270 10 1,873,323 9 AA2,215,179 13 2,412,947 11 
AA4,566,999 26 5,969,677 28 A4,487,607 25 5,584,588 26 
BBB+BBB+3,634,583 21 4,612,898 22 BBB+3,779,051 21 4,616,977 22 
BBBBBB4,137,099 24 5,088,114 24 BBB4,289,044 24 5,174,667 24 
BBB-BBB-1,644,056 10 1,943,777 9 BBB-1,570,969 9 1,865,241 9 
Total investment grade
Total investment grade
16,353,060 95 20,336,410 96 A-
Total investment grade
17,103,376 96 20,522,148 96 A-
Below investment grade:Below investment grade:Below investment grade:
BBBB686,184 4 692,609 3 BB537,064 3 583,608 3 
BB115,646 1 122,104 1 B128,402 1 136,026 1 
Below BBelow B38,909 — 62,386 — Below B36,080 — 63,505 — 
Total below investment grade
Total below investment grade
840,739 5 877,099 4 BB-
Total below investment grade
701,546 4 783,139 4 BB-
$17,193,799 100 $21,213,509 100 $17,804,922 100 $21,305,287 100 
Weighted average composite quality rating
Weighted average composite quality rating
A-
Weighted average composite quality rating
A-

The overall quality rating of the portfolio is A-, the same as year-end 2020.2021. Fixed maturities rated BBB are 55% of the total portfolio at June 30, 2021 andMarch 31, 2022 compared with 54% at year-end 2020.2021. While this ratio is high relative to our peers, we have limited exposure to higher-risk assets such as derivatives, equities, and asset-backed securities. Additionally, the Company does not participate in securities lending and has no off-balance sheet investments as of June 30, 2021.March 31, 2022. Of our fixed maturity purchases, BBB securities generally provide the Company with the best risk adjusted capital adjustedrisk-adjusted, capital-adjusted returns largely due to our unique ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets.

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

Below-Investment Grade Fixed Maturities
(Dollar amounts in thousands)
Six Months Ended
June 30,		Three Months Ended
March 31,
2021202020222021
Balance at beginning of period
Balance at beginning of period
$840,739 $674,155 
Balance at beginning of period
$701,546 $840,739 
Downgrades by rating agenciesDowngrades by rating agencies— 135,667 Downgrades by rating agencies— — 
Upgrades by rating agenciesUpgrades by rating agencies(36,311)— Upgrades by rating agencies(96,080)— 
DispositionsDispositions(45,450)(6,883)Dispositions(23,041)(43,141)
Provision for credit lossesProvision for credit losses3,346 (32,719)Provision for credit losses(31)3,346 
Amortization and otherAmortization and other1,616 1,624 Amortization and other875 768 
Balance at end of period
Balance at end of period
$763,940 $771,844 
Balance at end of period
$583,269 $801,712 

Our investment policy calls for investing primarily in fixed maturities that are investment grade and meet our quality and yield objectives. Thus, any increases in below-investment grade issues are typically a result of ratings downgrades of existing holdings. Below-investment grade bonds at amortized cost, net of allowance for credit losses, were 13% of our shareholders’ equity, excluding the effect of unrealized gains and losses on fixed maturities

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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis

losses, were 10% of our shareholders’ equity, excluding the effect of unrealized gains and losses on fixed maturities as of June 30, 2021.March 31, 2022. Globe Life invests long term and as such, one of our key criterion in our investment process is to select issuers that have the ability to weather multiple financial cycles.

OPERATING EXPENSES

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

An analysis of operating expenses is shown below.

Operating Expenses Selected Information
(Dollar amounts in thousands)
Six Months Ended June 30,Increase Three Months Ended March 31,Increase
20212020(Decrease) 20222021(Decrease)
Amount% of
Premium		Amount% of
Premium		Amount%Amount% of
Premium		Amount% of
Premium		Amount%
Insurance administrative expenses:Insurance administrative expenses:Insurance administrative expenses:
SalariesSalaries$56,572 2.8 $52,200 2.7 $4,372 8 Salaries$30,283 2.8 $28,180 2.8 $2,103 7 
Other employee costsOther employee costs22,241 1.1 20,687 1.1 1,554 8 Other employee costs11,276 1.1 11,447 1.2 (171)(1)
Information technology costsInformation technology costs23,455 1.1 22,755 1.2 700 3 Information technology costs12,899 1.2 11,404 1.1 1,495 13 
Legal costsLegal costs7,355 0.4 5,312 0.3 2,043 38 Legal costs3,643 0.3 2,833 0.3 810 29 
Other administrative costsOther administrative costs24,056 1.2 24,232 1.3 (176)(1)Other administrative costs14,464 1.4 12,312 1.2 2,152 17 
Total insurance administrative expensesTotal insurance administrative expenses133,679 6.6 125,186 6.6 8,493 7 Total insurance administrative expenses72,565 6.8 66,176 6.6 6,389 10 
Parent company expenseParent company expense5,075 4,847 228 Parent company expense2,640 2,318 322 
Stock compensation expenseStock compensation expense16,522 17,988 (1,466)Stock compensation expense9,035 7,888 1,147 
Legal proceedingsLegal proceedings5,089 3,275 1,814 Legal proceedings— 4,828 (4,828)
Non-operating expensesNon-operating expenses112 — 112 
$160,365 $151,296 $9,069 6 $84,352 $81,210 $3,142 4 


Total operating expenses increased 6%4% over the prior year period primarily due to a 7%10% increase in insurance administrative expenses. Insurance administrative expenses increased $6 million primarily due to higher employee-related expenses, including pension costs and information technology salaries. Pension expense increasedcosts, including associated information technology salaries, higher employee costs in general, and higher costs due to the lower discount rate used to determine net periodic benefit costs in 2021 as compared to 2020.addition of Globe Life Benefits. The decreaseincrease in stock-based compensation expense was primarily due to fewer performance basedthe higher expense associated with equity awards, applicable toreflecting the first half of 2021Parent Company's increased share price in 2022 as compared with 2021. Insurance administrative expenses as a percent of premium were 6.8%, compared to 6.6% for the same period in 2020. While insurance administrative expenses were up 7% from prior year, as a percentage of premium at 6.6%, it was flat compared with 2020.2021.


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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis


SHARE REPURCHASES

Globe Life has an ongoing share repurchase program that began in 1986, and is reviewed quarterlywith the Board of Directors by management quarterly and annually reaffirmed by the Board of Directors. With no specified authorization amount, we determine the amount of repurchases based on the amount of the excess cash flow atflows after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses. The majority of these purchases are made from excess cash flow. Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance subsidiaries less interest expense paid on its debt dividends paid to Parent Company shareholders, and other limited operating activities. The majority of our share repurchases are made from excess cash flow after the payment of shareholder dividends. Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises. TheOn August 4, 2021, the Board of Directors has authorizedreauthorized the Parent Company’s share repurchase program in amounts and with timing that management, in consultation with the Board, determines to be in the best interest of the Company and its shareholders.
The following chart summarizes share repurchases for the sixthree month periods ended June 30, 2021March 31, 2022 and 2020.2021.

Analysis of Share Repurchases
(Amounts in thousands, except per share data) 
Six Months Ended June 30, Three Months Ended March 31,
20212020 20222021
SharesAmountAverage
Price		SharesAmountAverage
Price		 SharesAmountAverage
Price		SharesAmountAverage
Price
Purchases with:Purchases with:Purchases with:
Excess cash flow at the Parent CompanyExcess cash flow at the Parent Company2,165 $213,503 $98.61 1,629 $139,254 $85.47 Excess cash flow at the Parent Company880 $88,621 $100.70 944 $90,149 $95.47 
Option exercise proceedsOption exercise proceeds812 82,081 101.14 267 27,475 103.13 Option exercise proceeds299 30,861 103.07 435 42,571 97.89 
TotalTotal2,977 $295,584 $99.30 1,896 $166,729 $87.95 Total1,179 $119,482 $101.30 1,379 $132,720 $96.23 
Throughout the remainder of this discussion, share repurchases will only refer to those made from excess cash flow at the Parent Company.

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

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


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GL Q2 2021Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Management's Discussion & Analysis

Four of our insurance subsidiaries are members of the FHLB of Dallas. FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements. While not the only source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 9—Debt for further details.

Parent Company Liquidity. An important source of Parent Company liquidity is the dividends from its insurance subsidiaries. These dividends are received throughout the year and are used by the Parent Company to pay dividends on common and preferred stock, interest and principal repayment requirements on Parent Company debt, and operating expenses of the Parent Company.
Six Months Ended
June 30,		Twelve Months Ended December 31,Three Months Ended
March 31,		Twelve Months Ended December 31,
20212020Projected 2021202020222021Projected 20222021
Liquidity Sources:Liquidity Sources:Liquidity Sources:
Dividends from SubsidiariesDividends from Subsidiaries$240,120 $343,447 $480,000 $485,871 Dividends from Subsidiaries$107,083 $120,728 $400,000 $478,535 
Excess Cash FlowsExcess Cash Flows179,684 284,488 365,000 387,606 Excess Cash Flows69,270 88,922 280,000 370,120 

Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, public debt markets, term loans, and a revolving credit facility. At June 30, 2021,March 31, 2022, the Parent Company had access to $545$134 million of invested cash, net intercompany receivables and other liquid assets. The credit facility is discussed below.

Short-Term Borrowings. An additional source of Parent Company liquidity is a credit facility with a group of lenders allowing for unsecured revolving borrowings and stand-by letters of credit up to $750 million, which could be extended up to $1 billion. TheWhile the Parent Company may request the extension, however it is not guaranteed. Up to $250 million in letters of credit can be issued against the facility. The facility serves as a back-up line of credit line for a commercial paper program under which commercial paper may be issued at any time, with total commercial paper outstanding not to exceed the facility maximum, less any letters of credit issued. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature. On September 30, 2021, Globe Life amended the credit agreement dated August 24, 2020. The three-yearfive-year credit agreement will now mature on August 24, 2023.September 30, 2026. As of June 30, 2021,March 31, 2022, the Parent Company was in full compliance with all covenants related to the aforementioned debt.

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

The following table presents certain information about our commercial paper borrowings.

Credit Facility—Commercial Paper
(Dollar amounts in thousands)
AtAt
June 30,
2021		December 31, 2020June 30,
2020		March 31,
2022		December 31, 2021March 31,
2021
Balance of commercial paper at end of period (par value)Balance of commercial paper at end of period (par value)$260,000 $255,000 $450,000 Balance of commercial paper at end of period (par value)$372,524 $330,033 $275,000 
Annualized interest rateAnnualized interest rate0.22 %0.27 %0.94 %Annualized interest rate0.69 %0.29 %0.23 %
Letters of credit outstandingLetters of credit outstanding$135,000 $135,000 $150,000 Letters of credit outstanding$125,000 $125,000 $135,000 
Remaining amount available under credit lineRemaining amount available under credit line355,000 360,000 150,000 Remaining amount available under credit line252,476 294,967 340,000 

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        GL Q1 2022 FORM 10-Q
Table of Contents
Globe Life Inc.
Management's Discussion & Analysis

Credit Facility—Commercial Paper Activity
(Dollar amounts in thousands)
Six Months Ended June 30, Three Months Ended March 31,
20212020 20222021
Average balance of commercial paper outstanding during period (par value)Average balance of commercial paper outstanding during period (par value)$297,901 $370,130 Average balance of commercial paper outstanding during period (par value)$426,243 $300,444 
Daily-weighted average interest rate (annualized)Daily-weighted average interest rate (annualized)0.24 %2.05 %Daily-weighted average interest rate (annualized)0.43 %0.24 %
Maximum daily amount outstanding during period (par value)Maximum daily amount outstanding during period (par value)$355,000 $482,000 Maximum daily amount outstanding during period (par value)$500,529 $355,000 

The Company increased the commercial paper borrowings by $5$42 million since year-end, reflecting timing of cash needs of the Parent Company. We had no difficulties in accessing the commercial paper market under this facility during the sixthree months ended June 30, 2021March 31, 2022 and 2020.

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GL Q2 2021 FORM 10-Q
Table of Contents
Globe Life Inc.
Management's Discussion & Analysis2021.

Globe Life expects to have readily available funds for 20212022 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries through liquid assets currently available, internally-generated cash flow and the credit facility. In the unlikely event that more liquidity is needed, the Parent Company could generate additional funds through multiple sources including, but not limited to, the issuance of debt, an additional short-term credit facility or term loan, and intercompany borrowing.

As of June 30, 2021, the Parent Company had access to $545 million of liquid assets. On July 15, 2021, the Company used $300 million of these assets to call our 6.125% Junior subordinated debenture due in 2056. The remaining assets, plus additional excess cash flows during the second half of the year, are available to the Company in the event additional funds are needed to support the targeted capital levels within our insurance subsidiaries due to adverse impacts of COVID-19 and other contingencies. Should the Parent Company have liquidity in excess of the amount needed to fund capital contributions to the insurance subsidiaries, the Parent will consider using a portion of such excess for additional share repurchases before the end of the year.

Consolidated Liquidity. Consolidated net cash inflows from operations were $702$397 million in the first sixthree months of 2021,2022, compared with $769$372 million in the same period of 2020.2021. The decreaseincrease is primarily attributable to fluctuations in the settlement of certain amounts included in other liabilities. In addition to cash inflows from operations, our insurance companies received proceeds from dispositions of fixed maturities available for sale in the amount of $109$115 million during the 20212022 period. As previously noted under the caption Credit Facility, the Parent Company has in place a revolving credit facility. The insurance companies have no additional outstanding credit facilities.

Cash and short-term investments were $510$185 million at June 30, 2021,March 31, 2022, compared with $203$161 million at December 31, 2020.2021. In addition to these liquid assets, the entire $21.1$19.2 billion (fair value at June 30, 2021)March 31, 2022) portfolio of fixed income securities is available for sale in the event of an unexpected need. Approximately 97% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. We generally expect to hold fixed income securities to maturity, and even though these securities are classified as available for sale, we have the ability and general intent to hold any securities to recovery. Our strong cash flows from operations, on-going investment maturities, and available liquidity under our credit facility make any need to sell securities for liquidity highly unlikely.

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GL Q2 2021Q1 2022 FORM 10-Q
Globe Life Inc.
Management's Discussion & Analysis


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

Long-Term Borrowings. The outstanding long-term debt at book value was $2.0$1.5 billion at June 30, 2021March 31, 2022 and $1.7 billion at December 31, 2020.2021. Refer to Note 9—Debt for a complete analysis and description of long-term debt issues outstanding.

Selected Information about Debt Issues
As of June 30, 2021March 31, 2022
(Dollar amounts in thousands)
InstrumentInstrumentIssue DateMaturity DateCoupon Rate Interest Payment DatesPar
Value		Book
Value		Fair
Value		InstrumentIssue DateMaturity DateCoupon Rate Interest Payment DatesPar
Value		Book
Value		Fair
Value
Senior notesSenior notes05/27/199305/15/20237.875%semiannual$165,612 $165,083 $187,310 Senior notes05/27/199305/15/20237.875%semiannual$165,612 $165,285 $174,991 
Senior notes(1)
Senior notes(1)
09/24/201209/15/20223.800%semiannual150,000 149,581 155,873 
Senior notes(1)
09/24/201209/15/20223.800%semiannual150,000 149,839 151,500 
Senior notesSenior notes09/27/201809/15/20284.550%semiannual550,000 544,639 643,418 Senior notes09/27/201809/15/20284.550%semiannual550,000 545,112 576,906 
Senior notesSenior notes08/21/202008/15/20302.150%semiannual400,000 395,565 395,184 Senior notes08/21/202008/15/20302.150%semiannual400,000 395,889 358,344 
Junior subordinated debentures(2)
05/17/201606/15/20566.125%quarterly300,000 290,688 313,320 
Junior subordinated debenturesJunior subordinated debentures11/17/201711/17/20575.275% semiannual125,000 123,388 129,895 Junior subordinated debentures11/17/201711/17/20575.275% semiannual125,000 123,399 127,150 
Junior subordinated debenturesJunior subordinated debentures06/14/202106/15/20614.250%quarterly325,000 317,172 339,430 Junior subordinated debentures06/14/202106/15/20614.250%quarterly325,000 317,173 288,340 
1,715,612 1,696,697 1,677,231 
Less current maturity of long-term debt(1)
Less current maturity of long-term debt(1)
150,000 149,839 151,500 
Total long-term debt
Total long-term debt
2,015,612 1,986,116 2,164,430 
Total long-term debt
1,565,612 1,546,858 1,525,731 
Current maturity of long-term debt(1)
Current maturity of long-term debt(1)
150,000 149,839 151,500 
Commercial paperCommercial paper260,000 259,946 259,946 Commercial paper372,524 372,240 372,240 
Total short-term debt
Total short-term debt
260,000 259,946 259,946 
Total short-term debt
522,524 522,079 523,740 
Total debt
Total debt
$2,275,612 $2,246,062 $2,424,376 
Total debt
$2,088,136 $2,068,937 $2,049,471 
(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.
(2)The $300 million of 6.125% Junior subordinated debentures were redeemed on July 15, 2021.


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

Our goal is to maintain statutory capital within our insurance subsidiaries at levels necessary to support our current ratings. For 2021,2022, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%. The Company concludes that this capital level is more than adequate and sufficient to support its current ratings, given the nature of its business and its risk profile. As of December 31, 2020,2021, our consolidated Company Action Level RBC ratio was 309%315%. In 2021, a proposal is expected to be adopted by the NAIC that would increase the risk based capital required to be held with respect to investments, commonly referred to as C-1 factors. These changes would increase the amount of capital required to maintain our consolidated target RBC ratio. The Parent Company is committed to maintaining the targeted consolidated RBC ratio at its insurance subsidiaries and has sufficient liquidity available to provide additional capital if necessary.

Shareholders' Equity: On March 8, 2022, the Parent Company announced that it had declared a quarterly dividend of $0.2075 per share. This dividend was paid on April 29, 2022.

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GL Q2 2021Q1 2022 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis


Shareholders' Equity: On May 3, 2021, the Parent Company announced that it had declared a quarterly dividend of $0.1975 per share. This dividend was paid on July 30, 2021.

Shareholders’ equity was $8.6$6.9 billion at June 30, 2021.March 31, 2022. This compares with $8.8$8.6 billion at December 31, 20202021 and $7.8 billion at June 30, 2020.March 31, 2021. During the sixthree months since December 31, 2020,2021, shareholders’ equity decreased primarily due to $292 million$1.8 billion of after-tax unrealized losses in the fixed-maturity portfolio as interest rates have increased over the period. In addition, shareholders' equity increased by net income of $378$164 million during the first sixthree months of 2021,2022, but was offset by share repurchases of $214$89 million and an additional $82$31 million in share purchases to counterbalanceoffset the dilution from stock option exercises.

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



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GL Q2 2021 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis

Globe Life is required under GAAP to revalue its available for sale fixed maturity portfolio to fair market value at the end of each accounting period. These changes, net of their associated impact on deferred acquisition costs and income tax, are reflected directly in shareholders’ equity.

While GAAP requiresa majority of our fixed maturityinvested assets to beare revalued, it doescurrent accounting rules do not permit interest-bearing insurance policy liabilities supported by those assets to be valued at fair value in a consistent manner as that of our invested assets, with changes in value applied directly to shareholders’ equity. However, dueDue to the size of both the investment portfolio and our policy liabilities thisin relation to our shareholders’ equity, an inconsistency exists in measurement, canwhich may have a material impact on the reported value of shareholders’ equity. BecauseFluctuations in interest rates cause undue volatility in the period-to-period presentation of our shareholders’ equity, capital structure, and financial ratios. Due to the long-term nature of our fixed maturitiesmaturity investments and policy liabilities and the strong cash flows consistently generated by our insurance subsidiaries, we have the intent and ability to hold our securities to maturity. As such, we do not expect to incur realized gains or losses due to fluctuations in the market value of fixed maturities caused by interestmarket rate changes or losses caused byand temporarily illiquid markets. Accordingly, our management, removescredit rating agencies, lenders, many industry analysts, and certain other financial statement users prefer to remove the effect of this accounting rule when analyzing the Company'sour balance sheet, capital structure, and financial ratios in order to provide a consistent and meaningful portrayal of the Company’s financial position from period to period.ratios.

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        GL Q1 2022 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis

The following table presents selected data related to our capital resources. Additionally, the table presents the effect of this accounting guidance on relevant line items, so that investors and other financial statement users may determine its impact on Globe Life's capital structure. Excluding the effect of unrealized gains and losses on the fixed maturity portfolio from shareholders' equity is considered non-GAAP. Below we include the reconciliation to GAAP.
Selected Financial Data
(Dollar amounts in thousands, except per share data)
AtAt
June 30, 2021December 31, 2020June 30, 2020 March 31, 2022December 31, 2021March 31, 2021
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
Effect of
Accounting
Rule
Requiring
Revaluation(1)
Fixed maturitiesFixed maturities$21,101,780 $3,649,862 $21,213,509 $4,019,710 $19,661,182 $2,996,001 Fixed maturities$19,179,107 $1,203,697 $21,305,287 $3,500,365 $20,154,910 $2,742,951 
Deferred acquisition costs(2)
Deferred acquisition costs(2)
4,743,032 (5,188)4,595,444 (5,955)4,446,356 (6,723)
Deferred acquisition costs(2)
4,999,935 (3,951)4,914,728 (4,327)4,662,509 (5,596)
Total assetsTotal assets29,580,057 3,644,674 29,046,731 4,013,755 27,534,180 2,989,278 Total assets27,850,328 1,199,746 29,768,048 3,496,038 28,112,896 2,737,355 
Short-term debtShort-term debt259,946 — 254,918 — 831,076 — Short-term debt522,079 — 479,644 — 274,919 — 
Long-term debtLong-term debt1,986,116 — 1,667,886 — 1,272,104 — Long-term debt1,546,858 — 1,546,494 — 1,668,322 — 
Shareholders' equityShareholders' equity8,616,922 2,879,292 8,771,092 3,170,866 7,848,369 2,361,530 Shareholders' equity6,894,020 947,799 8,642,806 2,761,870 7,832,337 2,162,510 
Book value per diluted shareBook value per diluted share83.59 27.93 83.19 30.07 73.26 22.05 Book value per diluted share69.16 9.51 85.97 27.47 75.10 20.74 
Debt to capitalization(3)
Debt to capitalization(3)
20.7 %(7.5)%18.0 %(7.6)%21.1 %(6.6)%
Debt to capitalization(3)
23.1 %(2.7)%19.0 %(6.6)%19.9 %(5.6)%
Diluted shares outstandingDiluted shares outstanding103,081 105,429 107,137 Diluted shares outstanding99,689 100,535 104,292 
Actual shares outstandingActual shares outstanding102,163 103,797 106,451 Actual shares outstanding98,875 99,567 103,193 
 
(1)Amount added to (deducted from) comprehensive income to produce the stated GAAP item, per accounting rule ASC 320-10-35-1.
(2)Includes the value of business acquired (VOBA).
(3)Globe Life's debt covenants require that the effect of this accounting rule be removed to determine this ratio. This ratio is computed by dividing total debt by the sum of total debt and shareholders’ equity.



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Item 3. Quantitative and Qualitative Disclosures aboutAbout Market Risk
 
There have been no quantitative or qualitative changes with respect to market risk exposure during the sixthree months ended June 30, 2021.March 31, 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures: Globe Life, under the direction of the Co-Chairmen and Chief Executive Officers and the Senior Executive Vice President and Chief Financial Officer, has established disclosure controls and procedures that are designed to ensure that information required to be disclosed by Globe Life in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to Globe Life's management, including the Co-Chairmen and Chief Executive Officers and the Senior Executive Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
 
As of the end of the fiscal periodquarter completed June 30, 2021,March 31, 2022, an evaluation was performed under the supervision and with the participation of Globe Life management, including the Co-Chairmen and Chief Executive Officers and the Senior Executive Vice President and Chief Financial Officer, of the disclosure controls and procedures (as those terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon their evaluation, the Co-Chairmen and Chief Executive Officers and the Senior Executive Vice President and Chief Financial Officer have concluded that disclosure controls and procedures are effective as of the date of this Form 10-Q. In compliance with Section 302 of the Sarbanes Oxley Act of 2002 (18 U.S.C. § 1350), each of these officers executed a Certification included as an exhibit to this Form 10-Q.

Changes in Internal Control over Financial Reporting: As of the period ended June 30, 2021,March 31, 2022, there have not been any changes in Globe Life Inc.'s internal control over financial reporting or in other factors that could significantly affect this control over financial reporting subsequent to the date of their evaluation which have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
 
Part II—Other Information

Item 1. Legal Proceedings

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


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Item 1A. Risk Factors

The Company had no material changes to its risk factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Certain Equity Securities by the Issuer and Others for the SecondFirst Quarter of 20212022
Period
(a) Total Number
of Shares
Purchased
(b) Average
Price Paid
Per Share
(c) Total Number of
Shares Purchased as 
Part of Publicly Announced
Plans or Programs
(d) Maximum Number
of Shares (or
Approximate Dollar
Amount) that May
Yet Be Purchased
Under the Plans or
Programs
April 1-30, 2021292,744 $101.18 292,744 
May 1-31, 2021529,606 105.02 529,606 
June 1-30, 2021775,035 100.16 775,035 
Period
(a) Total Number
of Shares
Purchased
(b) Average
Price Paid
Per Share
(c) Total Number of
Shares Purchased as 
Part of Publicly Announced
Plans or Programs
(d) Maximum Number
of Shares (or
Approximate Dollar
Amount) that May
Yet Be Purchased
Under the Plans or
Programs
January 1-31, 2022403,891 $101.72 403,891 
February 1-28, 2022393,257 104.14 393,257 
March 1-31, 2022382,339 97.93 382,339 

On August 4, 2021, the Globe Life Board of Directors reaffirmed its continued authorization of the Company's stock repurchase program in amounts and with timing that management, in consultation with the Board, determined to be in the best interest of the Company. The program has no defined expiration date or maximum shares to be repurchased.

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Item 6. Exhibits
 
Exhibit No.Description
31.1
31.2
31.3
32.1
101.INSXBRL Instance Document- the instance document does not appear in the Interactive Data file because the XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
104Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).



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SIGNATURES
Pursuant to the requirementrequirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereuntothereunto duly authorized.
 
GLOBE LIFE INC.
Date: August 4, 2021May 5, 2022/s/ Gary L. Coleman
Gary L. Coleman
Co-Chairman and Chief Executive Officer
Date: August 4, 2021May 5, 2022/s/ Larry M. Hutchison
Larry M. Hutchison
Co-Chairman and Chief Executive Officer
Date: August 4, 2021May 5, 2022/s/ Frank M. Svoboda
Frank M. Svoboda
Senior Executive Vice President and Chief Financial Officer


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