Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
(Mark one)
ýQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2017
¨Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________to_________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
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 1-8052Number: 001-08052
torchmarklogocolora01rgba18.jpgGLOBE LIFE INC.
TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWAREDelaware63-0780404
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
3700 South Stonebridge Drive, McKinney, Texas75070
(Address of principal executive offices)(Zip Code)
3700 South Stonebridge Drive, McKinney, Texas 75070
(Address of principal executive offices) (Zip Code)

(972) 569-4000
(Registrant’s telephone number, including area code (972) 569-4000code)

NONE
(Former name, former address and former fiscal year, if changed since last report.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)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   ☐
Yesý No¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
Yesý☒No¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, ora 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. (Check one):
Large accelerated filerý☒Accelerated filer¨☐
Non-accelerated filer
¨ (Do not check if a smaller reporting company)
☐		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   ☒
Yes¨Noý
Indicate the number of shares outstanding forof each of the issuer’s classes of common stock, as of the lastlatest practicable date.
ClassCLASSOUTSTANDING AT October 31, 2017Outstanding at April 28, 2023
Common Stock,
$1.00 $1.00 Par Value
115,446,83295,554,844

GL Q1 2023 FORM 10-Q
Table of Contents




Globe Life Inc.
INDEX
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
5
Page
PART I. FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Balance Sheets
1
Condensed Consolidated Statements of Operations
2
Condensed Consolidated Statements of Comprehensive Income
3
Condensed Consolidated Statements of Shareholders' Equity
4
Condensed Consolidated Statements of Cash Flows
5
Notes to Condensed Consolidated Financial Statements
6
Note 1—Significant Accounting Policies
6
Note 2—New Accounting Standards
68
Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income
812
Note 4—Investments
1014
Note 5—Discontinued Operations
15
Note 6—Commitments and Contingencies
1625
Note 6—Policy Liabilities
26
Note 7—Deferred Acquisition Costs
37
Note 8—Liability for Unpaid Claims
1739
Note 8—9—Postretirement Benefits Plans
1940
Note 9—10—Earnings Per Share
2042
Note 10—Business Segments11—Debt
2043
Note 12—Business Segments
44
Note 13—Subsequent Events
47
48
Item 2.
2749
Item 3.
4879
Item 4.
4879
PART II.II. OTHER INFORMATION
Item 1.
Legal Proceedings
49
Item 1A.
Risk Factors
49
Item 2.
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
49
Item 6.
Exhibits
49

Table of Contents




PART I–FINANCIAL INFORMATION
Item 1.Condensed Consolidated Financial Statements
79
Item 1A.
80
Item 2.
80
Item 6.
81
82


TORCHMARK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

As used in this Form 10-Q, “Globe Life,” the “Company,” “we,” “our” and “us” refer to Globe Life Inc., a Delaware corporation incorporated in 1979, its subsidiaries and affiliates.
GL Q1 2023 FORM 10-Q
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements

Globe Life Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollar amounts in thousands)thousands, except per share data)
March 31,
2023		December 31, 2022
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2023—$18,526,703;
2022—$18,301,692, allowance for credit losses: 2023— $32,767; 2022— $0)
$17,206,885 $16,503,365 
Policy loans622,736 614,866 
Other long-term investments (includes: 2023—$789,197; 2022—$768,689 under the fair value option)1,022,611 976,016 
Short-term investments74,377 114,121 
Total investments18,926,609 18,208,368 
Cash172,108 92,559 
Accrued investment income279,445 259,581 
Other receivables594,421 589,079 
Deferred acquisition costs5,654,438 5,535,697 
Goodwill481,791 481,791 
Other assets751,311 760,066 
Total assets$26,860,123 $25,927,141 
Liabilities:
Future policy benefits at current discount rates: (at original rates: 2023—$16,442,516; 2022—$16,306,870)$18,896,574 $18,040,042 
Unearned and advance premium271,517 253,140 
Policy claims and other benefits payable489,296 507,219 
Other policyholders' funds142,686 123,236 
Total policy liabilities19,800,073 18,923,637 
Current and deferred income taxes427,608 434,649 
Short-term debt514,247 449,103 
Long-term debt (estimated fair value: 2023—$1,484,172; 2022—$1,440,277)1,628,354 1,627,952 
Other liabilities643,550 542,223 
Total liabilities23,013,832 21,977,564 
Commitments and Contingencies (Note 5)
Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2023 and 2022— — 
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2023—105,218,183 issued; 2022—105,218,183 issued)105,218 105,218 
Additional paid-in-capital528,639 529,661 
Accumulated other comprehensive income (loss)(2,961,093)(2,790,313)
Retained earnings7,092,544 6,894,535 
Treasury stock, at cost: (2023—9,489,745 shares; 2022—8,478,288 shares)(919,017)(789,524)
Total shareholders' equity3,846,291 3,949,577 
Total liabilities and shareholders' equity$26,860,123 $25,927,141 
 September 30,
2017		 December 31,
2016
Assets:
  
Investments:   
Fixed maturities—available for sale, at fair value (amortized cost: 2017—$14,914,580; 2016—$14,188,050)$16,652,913
 $15,245,861
Policy loans523,318
 507,975
Other long-term investments70,096
 53,852
Short-term investments65,482
 72,040
Total investments17,311,809
 15,879,728
Cash88,462
 76,163
Accrued investment income238,278
 223,148
Other receivables389,084
 384,454
Deferred acquisition costs3,911,800
 3,783,158
Goodwill441,591
 441,591
Other assets544,011
 520,313
Assets related to discontinued operations68,572
 127,532
Total assets$22,993,607
 $21,436,087
Liabilities:   
Future policy benefits$13,298,069
 $12,825,837
Unearned and advance premiums61,536
 64,017
Policy claims and other benefits payable318,832
 299,565
Other policyholders' funds97,016
 96,993
Total policy liabilities13,775,453
 13,286,412
Current and deferred income taxes payable2,069,158
 1,743,990
Other liabilities492,175
 413,760
Short-term debt309,002
 264,475
Long-term debt (estimated fair value: 2017—$1,243,232; 2016—$1,233,019)1,130,806
 1,133,165
Liabilities related to discontinued operations49,328
 27,424
Total liabilities17,825,922
 16,869,226
Commitments and Contingencies (Note 6)

 
Shareholders’ equity:   
Preferred stock, par value $1 per share—Authorized 5,000,000 shares; outstanding: -0- in 2017 and 2016—
 —
Common stock, par value $1 per share—Authorized 320,000,000 shares; outstanding: (2017—127,218,183 issued, less 11,859,162 held in treasury and 2016—127,218,183 issued, less 9,187,075 held in treasury)127,218
 127,218
Additional paid-in capital508,386
 490,421
Accumulated other comprehensive income1,039,302
 577,574
Retained earnings4,239,582
 3,890,798
Treasury stock, at cost(746,803) (519,150)
Total shareholders’ equity5,167,685
 4,566,861
Total liabilities and shareholders’ equity$22,993,607
 $21,436,087

Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.

1
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Globe Life Inc.
TORCHMARK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCondensed Consolidated Statements of Operations
(Unaudited)
(Dollar amounts in thousands, except per share data)
Three Months Ended
March 31,
20232022
Revenue:
Life premium$772,597 $749,128 
Health premium322,493 315,684 
Other premium— — 
Total premium1,095,090 1,064,812 
Net investment income257,105 244,894 
Realized gains (losses)(30,927)(7,244)
Other income50 164 
Total revenue1,321,318 1,302,626 
Benefits and expenses:
Life policyholder benefits (net of remeasurement (gain) loss: 2023—$(2,697); 2022—$5,783)507,977 495,429 
Health policyholder benefits (net of remeasurement (gain) loss: 2023—$2,038; 2022—$(1,959))190,962 189,018 
Other policyholder benefits8,988 9,702 
Total policyholder benefits707,927 694,149 
Amortization of deferred acquisition costs92,322 84,496 
Commissions, premium taxes, and non-deferred acquisition costs137,797 125,509 
Other operating expense84,171 84,352 
Interest expense24,867 19,944 
Total benefits and expenses1,047,084 1,008,450 
Income before income taxes274,234 294,176 
Income tax benefit (expense)(50,624)(56,692)
Net income
$223,610 $237,484 
Basic net income per common share
$2.32 $2.39 
Diluted net income per common share
$2.28 $2.37 
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Revenue:       
Life premium$576,223
 $546,415
 $1,725,896
 $1,639,156
Health premium242,991
 236,987
 730,557
 709,936
Other premium3
 9
 9
 34
Total premium819,217
 783,411
 2,456,462
 2,349,126
Net investment income213,872
 202,720
 634,930
 601,415
Realized investment gains (losses)12,595
 3,482
 6,142
 7,780
Other income331
 160
 1,140
 963
Total revenue1,046,015
 989,773
 3,098,674
 2,959,284
        
Benefits and expenses:       
Life policyholder benefits386,445
 369,546
 1,168,383
 1,101,748
Health policyholder benefits155,774
 153,351
 470,104
 459,387
Other policyholder benefits9,000
 9,255
 26,923
 27,475
Total policyholder benefits551,219
 532,152
 1,665,410
 1,588,610
Amortization of deferred acquisition costs122,334
 116,821
 370,363
 352,872
Commissions, premium taxes, and non-deferred acquisition costs67,863
 61,153
 198,011
 185,609
Other operating expense63,019
 57,805
 187,788
 173,080
Interest expense20,970
 20,381
 62,825
 62,860
Total benefits and expenses825,405
 788,312
 2,484,397
 2,363,031
        
Income before income taxes220,610
 201,461
 614,277
 596,253
Income taxes(67,264) (59,551) (183,390) (181,475)
Income from continuing operations153,346
 141,910
 430,887
 414,778
        
Income (loss) from discontinued operations, net of tax(12) 9,959
 (3,739) (447)
Net income$153,334
 $151,869
 $427,148
 $414,331
        
Basic net income (loss) per common share:   
   
Continuing operations$1.32
 $1.19
 $3.69
 $3.44
Discontinued operations—
 0.08
 (0.03) —
Total basic net income per common share$1.32
 $1.27
 $3.66
 $3.44
        
Diluted net income (loss) per common share:   
   
Continuing operations$1.29
 $1.16
 $3.61
 $3.38
Discontinued operations—
 0.09
 (0.03) —
Total diluted net income per common share$1.29
 $1.25
 $3.58
 $3.38
        
Dividends declared per common share$0.15
 $0.14
 $0.45
 $0.42

















Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.

2
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Globe Life Inc.
TORCHMARK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMECondensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(Dollar amounts in thousands)
Three Months Ended
March 31,
20232022
Net income
$223,610 $237,484 
Other comprehensive income (loss):
Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period469,119 (2,292,922)
Other reclassification adjustments included in net income32,590 (4,030)
Foreign exchange adjustment on fixed maturities recorded at fair value9,567 284 
Total unrealized investment gains (losses)511,276 (2,296,668)
Less applicable tax (expense) benefit(107,368)482,299 
Unrealized gains (losses) on investments, net of tax403,908 (1,814,369)
Future Policy Benefits:
Change in discount rate on future policy benefits(720,890)2,805,511 
Less applicable tax (expense) benefit151,387 (589,156)
Future policy benefit adjustments, net of tax(569,503)2,216,355 
Foreign exchange translation:
Foreign exchange translation adjustments, other than securities(6,516)4,228 
Less applicable tax (expense) benefit1,368 (887)
Foreign exchange translation adjustments, other than securities, net of tax(5,148)3,341 
Pension:
Pension adjustments(48)3,437 
Less applicable tax (expense) benefit11 (722)
Pension adjustments, net of tax(37)2,715 
Other comprehensive income (loss)(170,780)408,042 
Comprehensive income (loss)
$52,830 $645,526 
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Net income$153,334
 $151,869
 $427,148
 $414,331
        
Other comprehensive income (loss):       
Unrealized investment gains (losses):       
Unrealized gains (losses) on securities:       
Unrealized holding gains (losses) arising during period83,216
 236,040
 692,747
 1,397,181
Reclassification adjustment for (gains) losses on securities included in net income(12,910) (3,513) (13,264) (7,809)
Reclassification adjustment for amortization of (discount) and premium119
 (927) (379) (3,495)
Foreign exchange adjustment on securities recorded at fair value1,173
 (199) 1,418
 849
Unrealized gains (losses) on securities71,598
 231,401
 680,522
 1,386,726
Unrealized gains (losses) on other investments473
 1,685
 3,544
 3,568
Total unrealized investment gains (losses)72,071
 233,086

684,066

1,390,294
Less applicable tax (expense) benefit(25,225) (81,583) (239,479) (486,573)
Unrealized investment gains (losses), net of tax46,846
 151,503
 444,587
 903,721
        
Unrealized gains (losses) attributable to deferred acquisition costs505
 621
 (992) (4,829)
Less applicable tax (expense) benefit(177) (216) 347
 1,691
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax328
 405
 (645) (3,138)
        
Foreign exchange translation adjustments, other than securities8,533
 120
 16,049
 7,262
Less applicable tax (expense) benefit(2,986) (16) (4,567) (2,454)
Foreign exchange translation adjustments, other than securities, net of tax5,547
 104
 11,482
 4,808
        
Pension adjustments:       
Amortization of pension costs3,108
 2,551
 9,326
 7,654
Experience gain (loss)—
 —
 371
 791
Pension adjustments3,108
 2,551
 9,697
 8,445
Less applicable tax (expense) benefit(1,087) (894) (3,393) (2,957)
Pension adjustments, net of tax2,021
 1,657
 6,304
 5,488
        
Other comprehensive income (loss)54,742
 153,669
 461,728
 910,879
Comprehensive income (loss)$208,076
 $305,538
 $888,876
 $1,325,210











Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.


3
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TORCHMARK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITYGlobe 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, 2022
$— $105,218 $529,661 $(2,790,313)$6,894,535 $(789,524)$3,949,577 
Comprehensive income (loss)— — — (170,780)223,610 — 52,830 
Common dividends declared
($0.2250 per share)
— — — — (21,542)— (21,542)
Acquisition of treasury stock— — — — — (179,276)(179,276)
Stock-based compensation— — (1,022)— — 8,700 7,678 
Exercise of stock options— — — — (4,059)41,083 37,024 
Balance at March 31, 2023
$— $105,218 $528,639 $(2,961,093)$7,092,544 $(919,017)$3,846,291 




  Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Shareholders’ Equity
               
Balance at January 1, 2016 $—
 $130,218
 $482,284
 $231,947
 $3,614,369
 $(403,266) $4,055,552
Comprehensive income (loss) 
 
 
 910,879
 414,331
 
 1,325,210
Common dividends declared ($0.42 per share) 
 
 
 
 (50,410) 
 (50,410)
Acquisition of treasury stock 
 
 
 
 
 (311,356) (311,356)
Stock-based compensation 
 
 13,787
 
 (2,224) 8,771
 20,334
Exercise of stock options 
 
 

 
 (42,040) 89,093
 47,053
Balance at September 30, 2016 $—
 $130,218
 $496,071
 $1,142,826
 $3,934,026
 $(616,758) $5,086,383
               
               
               
  Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Shareholders’ Equity
               
Balance at January 1, 2017 $—
 $127,218
 $490,421
 $577,574
 $3,890,798
 $(519,150) $4,566,861
Comprehensive income (loss) 
 
 
 461,728
 427,148
 
 888,876
Common dividends declared ($0.45 per share) 
 
 
 
 (52,304) 
 (52,304)
Acquisition of treasury stock 
 
 
 
 
 (301,448) (301,448)
Stock-based compensation 
 
 17,965
 
 (606) 7,450
 24,809
Exercise of stock options 
 
 

 
 (25,454) 66,345
 40,891
Balance at September 30, 2017 $—
 $127,218
 $508,386
 $1,039,302
 $4,239,582
 $(746,803) $5,167,685




Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Shareholders' Equity
Balance at December 31, 2021
$— $109,218 $520,564 $(4,235,048)$6,455,733 $(846,659)$2,003,808 
Comprehensive income (loss)— — — 408,042 237,484 — 645,526 
Common dividends declared
($0.2075 per share)
— — — — (20,543)— (20,543)
Acquisition of treasury stock— — — — — (119,482)(119,482)
Stock-based compensation— — 2,504 — (345)6,876 9,035 
Exercise of stock options— — — — (9,964)35,895 25,931 
Balance at March 31, 2022
$— $109,218 $523,068 $(3,827,006)$6,662,365 $(923,370)$2,544,275 

.




























Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.

4
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Globe Life Inc.
TORCHMARK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCondensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollar amounts in thousands)
Three Months Ended
March 31,
20232022
Cash provided from (used for) operating activities
$477,330 $397,133 
Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold15,705 75,116 
Fixed maturities available for sale—matured or other redemptions61,560 115,160 
Other long-term investments1,950 20,929 
Total investments sold or matured79,215 211,205 
Acquisition of investments:
Fixed maturities—available for sale(285,505)(339,145)
Other long-term investments(47,898)(122,010)
Total investments acquired(333,403)(461,155)
Net (increase) decrease in policy loans(7,870)(2,324)
Net (increase) decrease in short-term investments39,744 11,801 
Additions to property and equipment(8,210)(6,981)
Investments in low-income housing interests(17,246)(27,870)
Cash provided from (used for) investing activities
(247,770)(275,324)
Cash provided from (used for) financing activities:
Issuance of common stock37,024 25,931 
Cash dividends paid to shareholders(20,071)(19,687)
Short-term borrowings from FHLB45,000 — 
Net borrowing (repayment) of commercial paper20,070 42,348 
Acquisition of treasury stock(179,276)(119,482)
Net receipts (payments) from deposit-type products(54,487)(13,810)
Cash provided from (used for) financing activities
(151,740)(84,700)
Effect of foreign exchange rate changes on cash1,729 (1,644)
Net increase (decrease) in cash79,549 35,465 
Cash at beginning of year92,559 92,163 
Cash at end of period$172,108 $127,628 

 Nine Months Ended September 30,
 2017 2016
Cash provided from operating activities$1,085,842
 $971,926
    
Cash provided from (used for) investing activities:   
Investments sold or matured:   
Fixed maturities available for sale—sold52,951
 75,299
Fixed maturities available for sale—matured, called, and repaid306,132
 178,873
Other long-term investments3,523
 466
Total long-term investments sold or matured362,606
 254,638
Acquisition of investments:   
Fixed maturities—available for sale(1,042,705) (910,090)
Other long-term investments(16,775) (20,404)
Total investments acquired(1,059,480) (930,494)
Net increase in policy loans(15,343) (6,623)
Net (increase) decrease in short-term investments6,556
 (11,138)
Net change in payable or receivable for securities—
 94
Additions to property and equipment(13,451) (10,138)
Sale of other assets18
 767
Investment in low-income housing interests(13,852) (16,126)
Cash provided from (used for) investing activities(732,946) (719,020)
    
Cash provided from (used for) financing activities:   
Issuance of common stock40,891
 47,053
Cash dividends paid to shareholders(51,532) (50,258)
Proceeds from issuance of debt—
 400,000
Payment for debt issuance costs—
 (9,638)
Repayment of debt(1,250) (250,000)
Net borrowing (repayment) of commercial paper42,652
 25,266
Acquisition of treasury stock(301,448) (311,356)
Net receipts (payments) from deposit-type product(65,912) (57,188)
Cash provided from (used for) financing activities(336,599) (206,121)
    
Effect of foreign exchange rate changes on cash(3,998) (3,268)
Net increase (decrease) in cash12,299
 43,517
Cash at beginning of year76,163
 61,383
Cash at end of period$88,462
 $104,900


















Prior period amounts have been adjusted for the adoption of ASU 2018-12 on January 1, 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.

5
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)




Note 1—Significant Accounting Policies

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

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

Globe Life markets its insurance products through a number of distribution channels, each of which sells the products of one or more of Globe Life's insurance segments. Our distribution channels consist of the following exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National) and Family Heritage Division (Family Heritage); an independent agency, United American Division (United American); and our Direct to Consumer Division (DTC).

Basis of Presentation:Presentation: The accompanying condensed consolidated financial statements of Torchmark Corporation (Torchmark or alternatively, the Company)Globe Life have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the annual disclosures required by accounting principles generally accepted in the United States of America (GAAP). for annual financial statements. However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial position at September 30, 2017,March 31, 2023, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended September 30, 2017March 31, 2023 and 2016.2022. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Form 10-K filed with the Securities Exchange Commission (SEC) on February 27, 2017.23, 2023.

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

Significant Accounting Policy Updates: The following accounting policies were updated since the 2022 Form 10-K due to the adoption of ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12). Refer to Note 2—New Accounting Standards
Accounting Pronouncements Not Yet Adopted
ASU 2016-01: In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which primarily revises the classification and measurement of certain equity investments such that they will be measured at fair value through net income. Additionally, it eliminates the cost methodAccounting Standards for partnerships and joint ventures and requires these types of investments to be accounted for under the fair value through net income method or equity method. Lastly, the guidance will require certain disclosures associated with fair value of financial instruments. This standard will become effective for the Company beginning January 1, 2018. The adoption will not have a significant impactadditional information on the financial statements as we have limited ownership in equity investments and partnerships, representing less than 1%statement impacts related to the adoption of total invested assets.this standard.
ASU 2016-02: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires all lessees to report a right-of-use asset and a lease
Future Policy Benefits—The liability for leases with a termfuture policy benefits for traditional and limited-payment long duration life greater than 12 months. Operating and financing leases will be recognizedhealth products comprises approximately 91% of the total liability for future policy benefits. The liability is determined each reporting period based on the balance sheet going forward. Additional qualitativenet level premium method. This method requires the liability for future policy benefits be calculated as the present value of estimated future policyholder benefits and quantitative disclosures willthe related termination expenses, less the present value of estimated future net premiums to be required. This standard will become effectivecollected from policyholders. Net level premiums reflect a recomputed net premium ratio1 using actual experience since the issue date or the Transition Date, and expected future experience. The liability is accrued as premium revenue is recognized and adjusted for differences between actual and expected experience. Long-duration insurance contracts issued by the Company beginning January 1, 2019 and will require recognizing and measuring leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted. The Company does not expect the adoption to have a significant impactare grouped into cohorts based on the financial statements. Refercontract issue year, distribution channel, legal entity and product type.
1The net premium ratio is the percentage of gross premiums needed to the 2016 Form 10-K Note 15—Commitmentsfund actual and Contingencies for consideration of the noncancellable operating lease commitments. The Company does not have any lessor commitments.
ASU 2016-13: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments as well as to change the loss impairment methodology for available-for-sale debt securities. This standard will become effective on January 1, 2020. The applicable section of the standardbenefits and related to debt securities requires a prospective transition. The Company does not expect the adoption to have a significant impact on the financial statements as we have limited credit losses with respect to our available-for-sale portfolio.
ASU 2016-15: In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments to provide uniformity in the classification of cash receipts and payments recorded in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon bonds, and proceeds from the settlement of insurance claims. This standard will become effective on January 1, 2018 and will not have a significant impact on the financial statements.
ASU 2016-16: In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory. This guidance was issued to improve the accounting for income tax consequences of intra-entity transfers of assets other than inventory by allowing the immediate recognition of the current and deferred income tax effects. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. This new guidance should be applied on a modified retrospective

expenses.
6
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 2—New Accounting Standards (continued)


approachBoth the present value of expected future benefit payments and will become effectivethe present value of expected future net premiums are based primarily on January 1, 2018. This adoption will not haveassumptions of discount rates, mortality, morbidity, lapse, and persistency. Each quarter, the Company remeasures its liability for future policy benefits using current discount rates with the effect of the change recognized in Other Comprehensive Income, a significant impact on the financial statements.
ASU 2017-04:In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance was issued to simplify the subsequent measurement of goodwill through the elimination of Step 2 from the goodwill impairment test which required a hypothetical purchase price allocation. It will become effective on January 1, 2020 and should be applied on a prospective basis. This adoption will not have a significant impact on the financial statements.
ASU 2017-07: In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This guidance was issued to simplify the reporting of pension costs by disaggregating the service-cost component from the other components of net benefit costs and reporting it separately on the income statement. The service-cost component is the only component of shareholders’ equity. In addition, the Company recognizes a liability remeasurement gain or loss within the Condensed Consolidated Statements of Operations using original discount rates, and relating to actual experience under the net benefit cost that will be eligible for capitalization. The guidance will become effective on January 1, 2018 with a retrospective transition method for separation of net benefit costs and a prospective transition method forpremium calculation, as compared to the capitalization of service costs. prior reporting period assumptions.

The Company does not expect the adoptionreviews, and updates as necessary, its cash flow assumptions (mortality, morbidity, lapses and persistency) used to have a significant impact on the financial statements ascalculate the change in pension capitalization should be less than 1%the liability for future policy benefits at least annually. These cash flow assumptions are reviewed at the same time every year, or more frequently, if suggested by experience. If cash flow assumptions are changed, the net premium ratio is recalculated from the original issue date, or the Transition Date, using actual experience and projected future cash flows. When the expected future net premiums exceed the expected future gross premiums, or the present value of Total Benefits and Expensesfuture policyholder benefits exceeds the present value of expected future gross premiums, the liability for future policy benefits is adjusted with changes recognized in policyholder benefits on the Condensed Consolidated StatementStatements of Operations. The cash flow assumptions do not include an adjustment for adverse deviation. Mortality tables used for individual life insurance include various industry tables and reflect modifications based on Company experience. Morbidity assumptions for individual health are based on Company experience and industry data. Lapse and persistency assumptions are based on Globe Life's experience.

The liability for future policy benefits is discounted as noted above, using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. The methodology for determining current discount rates consists of constructing a discount rate curve intended to be reflective of the currency and tenor of the insurance liability cash flows. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets denominated in the same currency as the policies. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company will use estimation techniques consistent with the fair value guidance in ASC 820. We further accrete interest as a component of policyholder benefits using the original discount rate that is locked-in during the year of contract issuance. The original discount rates (or the locked-in discount rates) are used for interest accretion purposes and for the year.determination of net premiums, whereas the current discount rates are used for purposes of valuing the liability.
ASU 2017-08: In March 2017,
The liability for future policy benefits for annuity and interest sensitive life-type products is represented by policy account value. For limited-payment contracts, a deferred profit liability is also recorded, with changes recognized in income over the FASB issued ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities. This guidance was issued to shortenlife of the amortization period for certain callable debt securities held at a premium. The guidance requires the premium to be amortizedcontract in proportion to the earliest call date. It will become effective on January 1, 2019 with early adoption permitted, including during interim periods. The adoption is to be appliedamount of insurance in force.

Deferred Acquisition Costs—Certain costs of acquiring new insurance business are deferred and recorded as an asset. These costs are capitalized on a modified retrospectivegrouped contract basis and amortized over the expected term of the related contracts, and are essential for the acquisition of new insurance business. Deferred acquisition costs (DAC) are directly related to the successful issuance of an insurance contract, and primarily include sales commissions, policy issue costs, direct to consumer advertising costs, and underwriting costs. Additionally, DAC includes the value of business acquired (VOBA), which are the costs of acquiring blocks of insurance from other companies or through an adjustment to retained earnings. This adoption will not havethe acquisition of other companies. These costs represent the difference between the fair value of the contractual insurance assets acquired and liabilities assumed, compared against the assets and liabilities for insurance contracts that the Company issues or holds measured in accordance with GAAP.

DAC is amortized on a significant impactconstant-level basis over the expected term of the grouped contracts, with the related expense included in amortization of deferred acquisition costs on the financial statements.Condensed Consolidated Statements of Operations. The in-force metric used to compute the DAC amortization rate is annualized premium in force. The assumptions used to amortize acquisition costs include mortality, morbidity, and persistency. These assumptions are reviewed at least annually and revised in conjunction with any change in the future policy benefit assumptions. The effect of changes in the assumptions are recognized over the remaining expected contract term as a revision of future amortization amounts.
ASU 2017-09: In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This guidance was issued to provide clarity and guidance regarding changes to the terms or conditions of a share-based payment award that requires an entity to apply modification accounting. It will become effective on January 1, 2018 with early adoption permitted, including adoption in any interim periods. The Company does not expect the adoption to have a significant impact on the financial statements as modifications to stock compensation are infrequent.



7
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

VOBA is amortized on a basis that is consistent with DAC, as described above, and is subject to periodic recoverability and loss recognition testing to determine if there is a premium deficiency. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized VOBA asset. These cash flows consist primarily of premium income, less benefits and expenses. The present value of these cash flows, less the reserve liability, is then compared with the unamortized balance. In the event the estimated present value of net cash flows is less, the deficiency would be recognized by a charge to earnings and either a reduction of unamortized acquisition costs or an increase in the liability for future benefits.


Note 2—New Accounting Standards

Accounting Pronouncements Adopted in the Current Year: On January 1, 2023, the Company adopted ASU 2018-12 on a modified retrospective basis as of the transition date (Transition Date) of January 1, 2021. The amended guidance is a significant change to the accounting and disclosure of long-duration life and health insurance contracts. The modified retrospective transition method requires the updated standard be applied to all long-duration life and health contracts, which has resulted in the adjustment of the 2021 and 2022 consolidated financial statements.

The following tables summarize the balance of and changes to the liability for future policy benefits for traditional life and health long-duration contracts on the Transition Date due to the adoption of ASU 2018-12:
Net Liability for Future Policy Benefits - Long Duration Life
American IncomeDTCLiberty NationalOtherTotal
Balance, net of reinsurance, at original discount rates as of December 31, 2020
$3,541,317 $2,492,226 $2,140,071 $2,736,804 $10,910,418 
Effect of changes in discount rate assumptions3,334,600 2,195,430 1,229,610 2,297,835 9,057,475 
Effect of capping and flooring(1)
— 16,899 2,433 2 19,334 
Balance, net of reinsurance, at current discount rates as of January 1, 2021
$6,875,917 $4,704,555 $3,372,114 $5,034,641 $19,987,227 

Net liability for Future Policy Benefits - Long Duration Health
United AmericanFamily HeritageLiberty NationalAmerican IncomeDTCTotal
Balance, net of reinsurance, at original discount rates as of December 31, 2020
$131,505 $1,383,128 $501,312 $101,998 $(2,941)$2,115,002 
Effect of changes in discount rate assumptions75,652 497,250 219,992 60,366 346 853,606 
Effect of capping and flooring(1)
6,506 — 19,324 — 4,193 30,023 
Balance, net of reinsurance, at current discount rates as of January 1, 2021
$213,663 $1,880,378 $740,628 $162,364 $1,598 $2,998,631 
(1)When the present value of expected future net premiums exceeds the present value of expected future gross premiums for a given cohort (capping), or the present value of future policy benefits and related termination expenses exceeds the present value of expected future net premiums (flooring), an adjustment is made to the liability for future policy benefits.
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        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

The following table presents total policy liabilities, both before and after the Transition Date:
January 1,December 31,
20212020
Future policy benefits:
Net liability for future policy benefits—long duration life$19,987,227 $10,910,418 
Net liability for future policy benefits—long duration health2,998,631 2,115,002 
Additional insurance liabilities(1),(2)
2,008,399 2,218,116 
Total future policy benefits24,994,257 15,243,536 
Unearned and advance premium(1)
243,369 61,728 
Policy claims and other benefits payable(1)
473,524 399,507 
Other policyholders' funds(1)
98,459 97,968 
Total policy liabilities
$25,809,609 $15,802,739 
(1)In addition to the discount rate related adjustments to future policy benefits, the Company reclassified certain balances within total policy liabilities on the Consolidated Balance Sheetsas a result of adopting ASU 2018-12. The reclassifications had an immaterial impact on Shareholders' Equity. See table summarizing the transition adjustments to Shareholders' Equity below.
(2)The Company's additional insurance liabilities consist primarily of: 1) deferred profit liability on limited-payment contracts; and 2) reserves on deferred annuity and interest sensitive life blocks of business. See Note 6—Policy Liabilities for additional information.


The following table presents the Company's deferred policy acquisition costs, both before and after the Transition Date:
January 1,December 31,
20212020
Life:
American Income$1,647,761 $1,647,761 
Direct to Consumer1,498,970 1,498,435 
Liberty National531,504 531,504 
Other304,786 304,459 
Total life3,983,021 3,982,159 
Health:
United American65,020 74,353 
Family Heritage364,751 364,751 
Liberty National124,754 124,888 
American Income39,477 39,477 
Direct to Consumer2,215 6,600 
Total health596,217 610,069 
Annuity8,309 3,216 
Total DAC
$4,587,547 $4,595,444 

In accordance with ASU 2018-12, the Company has adjusted its DAC balance to remove the impact of unrealized gains and losses that were previously recorded in Accumulated Other Comprehensive Income (AOCI) on the Consolidated Statements of Shareholders' Equity. Under prior guidance, the Company included these amounts within its calculation of amortization.


9
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table presents the effect of transition adjustments due to the adoption of ASU 2018-12 on Shareholders' Equity:
Retained EarningsAccumulated Other Comprehensive Income (Loss)
Other(1)
Total
Shareholders’ Equity, as of December 31, 2020
$5,874,109 $3,029,244 $(132,261)$8,771,092 
Effect of changes in discount rate assumptions— (7,829,753)— (7,829,753)
Effect of capping and flooring(38,992)— — (38,992)
Effect of removal of unrealized gain (loss) on DAC— 4,704 — 4,704 
Other adjustments26,470 — — 26,470 
Shareholders’ Equity, as of January 1, 2021
$5,861,587 $(4,795,805)$(132,261)$933,521 
(1)Other represents common stock, additional paid-in capital, and treasury stock, combining balances that were unaffected by the new standard.

As of the Transition Date, the primary effects of the changes required by the standard were to AOCI and retained earnings. As seen in the table above, the transition adjustments impacting AOCI consist of the effect of changes in discount rate assumptions and the effect of the removal of unrealized gains (losses) on DAC. The effect of changes in discount rate assumptions is the impact, net of tax, of the Company re-measuring its liability for future policy benefits using current discount rates. As of the Transition Date, we experienced a lower level of current discount rates than the original discount rates used in valuing our future policy benefits under the prior guidance, thus reducing Shareholders' Equity. For the effect of removing unrealized gains (losses) on DAC, this adjustment relates to the requirement to remove unrealized gains (losses) that were included within the amortization calculation, as noted previously.

Regarding the impact on retained earnings, when the present value of net premiums exceeds the present value of gross premiums for a given cohort (capping), or the present value of future benefits and related termination expenses exceeds the present value of future gross premiums (flooring), an adjustment is recognized to the liability for future policy benefits. Any blocks of business that require increases in future policy benefits to minimum levels, or that have a net premium ratio greater than 100%, required an adjustment to the opening balance of retained earnings (decrease).

Accounting Pronouncements Yet to be Adopted:ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, adds disclosure requirements specific to equity securities subject to contractual sale restrictions. The disclosures clarify the nature of the contractual sale as well as the duration of the restriction and the circumstances that could cause a lapse in the restriction.

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


10
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Effect of New Accounting Standards on Previously Reported Results: The impacts from the adoption of ASU 2018-12 on the Company's previously reported results included in these financial statements are as follows:

Condensed Consolidated Balance Sheets
December 31, 2022
As Previously ReportedAdoption ImpactAs Adjusted
Assets:
Other receivables$484,887 $104,192 $589,079 
Deferred acquisition costs5,249,907 285,790 5,535,697 
Liabilities:
Future policy benefits16,721,846 1,318,196 18,040,042 
Unearned and advance premium60,742 192,398 253,140 
Policy claims and other benefits payable430,027 77,192 507,219 
Current and deferred income taxes686,172 (251,523)434,649 
Shareholders' equity:
Accumulated other comprehensive income (loss)(1,415,714)(1,374,599)(2,790,313)
Retained earnings6,466,220 428,315 6,894,535 

Condensed Consolidated Statements of Operations
Three Months Ended
March 31, 2022
As Previously ReportedAdoption ImpactAs Adjusted
Revenue:
Life premium$754,602 $(5,474)$749,128 
Health premium317,000 (1,316)315,684 
Net investment income243,834 1,060 244,894 
Benefits and expenses:
Life policyholder benefits549,343 (53,914)495,429 
Health policyholder benefits196,855 (7,837)189,018 
Other policyholder benefits7,050 2,652 9,702 
Amortization of deferred acquisition costs158,384 (73,888)84,496 
Commissions, premium taxes, and non-deferred acquisition costs90,813 34,696 125,509 
Income before income taxes201,615 92,561 294,176 
Income tax benefit (expense)(37,254)(19,438)(56,692)
Net income
$164,361 $73,123 $237,484 
Basic net income per common share
$1.66 $0.73 $2.39 
Diluted net income per common share
$1.64 $0.73 $2.37 

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

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        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income


Components of Accumulated Other Comprehensive Income: An analysis of the change in balance by component of Accumulated Other Comprehensive Income is as follows for the three and nine month periods ended September 30, 2017March 31, 2023 and 2016.2022:

 Three Months Ended March 31, 2023
 Available
for Sale
Assets		Future Policy BenefitsForeign
Exchange		Pension
Adjustments		Total
Balance at January 1, 2023
$(1,420,672)$(1,369,204)$(1,681)$1,244 $(2,790,313)
Other comprehensive income (loss) before reclassifications, net of tax378,162 (569,503)(5,148)— (196,489)
Reclassifications, net of tax25,746 — — (37)25,709 
Other comprehensive income (loss)403,908 (569,503)(5,148)(37)(170,780)
Balance at March 31, 2023
$(1,016,764)$(1,938,707)$(6,829)$1,207 $(2,961,093)
Components of Accumulated Other Comprehensive Income

 Three Months Ended March 31, 2022
 Available
for Sale
Assets		Future Policy BenefitsForeign
Exchange		Pension
Adjustments		Total
Balance at January 1, 2022
$2,765,290 $(6,915,910)$19,248 $(103,676)$(4,235,048)
Other comprehensive income (loss) before reclassifications, net of tax(1,811,185)2,216,355 3,341 — 408,511 
Reclassifications, net of tax(3,184)— — 2,715 (469)
Other comprehensive income (loss)(1,814,369)2,216,355 3,341 2,715 408,042 
Balance at March 31, 2022
$950,921 $(4,699,555)$22,589 $(100,961)$(3,827,006)

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        GL Q1 2023 FORM 10-Q
  Three Months Ended September 30, 2017
  Available
for Sale
Assets		 Deferred
Acquisition
Costs		 Foreign
Exchange		 Pension
Adjustments		 Total
Balance at July 1, 2017 $1,090,055
 $(7,655) $10,902
 $(108,742) $984,560
Other comprehensive income (loss) before reclassifications, net of tax 55,160
 328
 5,547
 —
 61,035
Reclassifications, net of tax (8,314) —
 —
 2,021
 (6,293)
Other comprehensive income (loss) 46,846
 328
 5,547
 2,021
 54,742
Balance at September 30, 2017 $1,136,901
 $(7,327) $16,449
 $(106,721) $1,039,302
           
  Three Months Ended September 30, 2016
  Available
for Sale
Assets		 Deferred
Acquisition
Costs		 Foreign
Exchange		 Pension
Adjustments		 Total
Balance at July 1, 2016 $1,084,551
 $(8,658) $8,331
 $(95,067) $989,157
Other comprehensive income (loss) before reclassifications, net of tax 154,389
 405
 104
 —
 154,898
Reclassifications, net of tax (2,886) —
 —
 1,657
 (1,229)
Other comprehensive income (loss) 151,503
 405
 104
 1,657
 153,669
Balance at September 30, 2016 $1,236,054
 $(8,253) $8,435
 $(93,410) $1,142,826


8
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income (continued)



Components of Accumulated Other Comprehensive Income
  Nine Months Ended September 30, 2017
  Available
for Sale
Assets		 Deferred
Acquisition
Costs		 Foreign
Exchange		 Pension
Adjustments		 Total
Balance at January 1, 2017 $692,314
 $(6,682) $4,967
 $(113,025) $577,574
Other comprehensive income (loss) before reclassifications, net of tax 453,455
 (645) 11,482
 241
 464,533
Reclassifications, net of tax (8,868) —
 —
 6,063
 (2,805)
Other comprehensive income (loss) 444,587
 (645) 11,482
 6,304
 461,728
Balance at September 30, 2017 $1,136,901
 $(7,327) $16,449
 $(106,721) $1,039,302
           
  Nine Months Ended September 30, 2016
  Available
for Sale
Assets		 Deferred
Acquisition
Costs		 Foreign
Exchange		 Pension
Adjustments		 Total
Balance at January 1, 2016 $332,333
 $(5,115) $3,627
 $(98,898) $231,947
Other comprehensive income (loss) before reclassifications, net of tax 911,069
 (3,138) 4,808
 513
 913,252
Reclassifications, net of tax (7,348) —
 —
 4,975
 (2,373)
Other comprehensive income (loss) 903,721
 (3,138) 4,808
 5,488
 910,879
Balance at September 30, 2016 $1,236,054
 $(8,253) $8,435
 $(93,410) $1,142,826
ReclassificationsReclassification Adjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are presented below for the three and nine month periods ended September 30, 2017March 31, 2023 and 2016.2022.
Reclassification Adjustments
  Three Months Ended March 31,Affected line items in the Statements of Operations
Component Line Item20232022
Unrealized investment (gains) losses on available for sale assets:
Realized (gains) losses$33,124 $(4,937)Realized (gains) losses
Amortization of (discount) premium(534)907 Net investment income
Total before tax32,590 (4,030)
Tax(6,844)846 Income taxes
Total after-tax25,746 (3,184)
Pension adjustments:
Amortization of prior service cost269 158 Other operating expense
Amortization of actuarial (gain) loss(317)3,279 Other operating expense
Total before tax(48)3,437 
Tax11 (722)Income taxes
Total after-tax(37)2,715 
Total reclassification (after-tax)
$25,709 $(469)
13
        GL Q1 2023 FORM 10-Q
   Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,		 
Affected line items in the
Statement of Operations
  2017 2016 2017 2016 
Unrealized investment gains (losses) on available for sale assets:          
Realized (gains) losses $(12,910) $(3,513) $(13,264) $(7,809) Realized gains (losses)
Amortization of (discount) premium 119
 (927) (379) (3,495) Net investment income
Total before tax (12,791) (4,440) (13,643) (11,304)  
Tax 4,477
 1,554
 4,775
 3,956
 Income taxes
Total after tax (8,314) (2,886) (8,868) (7,348)  
Pension adjustments:          
Amortization of prior service cost 118
 120
 356
 360
 Other operating expenses
Amortization of actuarial gain (loss) 2,990
 2,431
 8,970
 7,294
 Other operating expenses
Total before tax 3,108
 2,551
 9,326
 7,654
  
Tax (1,087) (894) (3,263) (2,679) Income taxes
Total after tax 2,021
 1,657
 6,063
 4,975
  
Total reclassifications (after tax) $(6,293) $(1,229) $(2,805) $(2,373)  


9
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)


Note 4—Investments

Portfolio Composition:
A summarySummaries of fixed maturities available for sale by cost or amortized cost, and estimated fair value, and allowance for credit losses at September 30, 2017March 31, 2023 and December 31, 2022, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows. Redeemable preferred stock is as follows:included within "Corporates, by sector."
Portfolio Composition as of September 30, 2017
At March 31, 2023

Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses
Fair
 Value(1)
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises$389,441 $— $114 $(27,482)$362,073 2 
States, municipalities, and political subdivisions2,894,161 — 41,407 (426,929)2,508,639 15 
Foreign governments53,789 — 13 (11,282)42,520 — 
Corporates, by sector:
Financial4,973,445 (26,040)84,796 (453,394)4,578,807 27 
Utilities1,958,888 — 70,798 (94,579)1,935,107 11 
Energy1,434,766 — 38,477 (80,338)1,392,905 8 
Other corporate sectors6,697,469 (6,727)126,968 (557,390)6,260,320 36 
Total corporates15,064,568 (32,767)321,039 (1,185,701)14,167,139 82 
Collateralized debt obligations36,778 — 8,724 — 45,502 — 
Other asset-backed securities87,966 — 4 (6,958)81,012 1 
Total fixed maturities
$18,526,703 $(32,767)$371,301 $(1,658,352)$17,206,885 100 
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair Value(1)
 
% of Total
Fixed
Maturities(2)
Fixed maturities available for sale:         
U.S. Government direct, guaranteed, and government-sponsored enterprises$387,985
 $12,800
 $(1,098) $399,687
 2
States, municipalities, and political subdivisions1,160,537
 127,675
 (108) 1,288,104
 8
Foreign governments20,939
 1,607
 —
 22,546
 —
Corporates, by sector:         
Financial3,199,469
 426,345
 (25,880) 3,599,934
 22
Utilities1,948,519
 324,060
 (2,655) 2,269,924
 14
Energy1,602,054
 185,296
 (28,070) 1,759,280
 11
Other corporate sectors6,025,262
 666,120
 (22,670) 6,668,712
 40
Total corporates12,775,304
 1,601,821
 (79,275) 14,297,850
 87
Collateralized debt obligations59,204
 19,558
 (8,994) 69,768
 —
Other asset-backed securities145,224
 5,018
 (17) 150,225
 1
Redeemable preferred stocks, by sector:         
Financial336,822
 60,159
 (3,030) 393,951
 2
Utilities28,565
 2,333
 (116) 30,782
 —
Total redeemable preferred stocks365,387
 62,492
 (3,146) 424,733
 2
Total fixed maturities$14,914,580
 $1,830,971
 $(92,638) $16,652,913
 100
(1) AmountsAmount reported onin the balance sheet.
(2)At fair value.


The Company has exposure to banks as part of its fixed maturity portfolio. The Company’s bank securities had a fair value of $1.3 billion (8% of the total fixed maturity portfolio) at March 31, 2023 and December 31, 2022.


14
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
At December 31, 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$394,439 $— $27 $(38,968)$355,498 2 
States, municipalities, and political subdivisions2,791,030 — 24,328 (505,447)2,309,911 14 
Foreign governments55,164 — 6 (12,706)42,464 — 
Corporates, by sector:
Financial4,907,794 — 63,126 (504,489)4,466,431 27 
Utilities1,924,190 — 36,670 (125,713)1,835,147 11 
Energy1,436,598 — 22,637 (101,923)1,357,312 8 
Other corporate sectors6,667,043 — 78,903 (738,772)6,007,174 37 
Total corporates14,935,625 — 201,336 (1,470,897)13,666,064 83 
Collateralized debt obligations37,098 — 13,266 — 50,364 — 
Other asset-backed securities88,336 — 4 (9,276)79,064 1 
Total fixed maturities
$18,301,692 $— $238,967 $(2,037,294)$16,503,365 100 
(1)Amount reported in the balance sheet.
(2)At fair value.

A schedule of fixed maturities available for sale by contractual maturity date at September 30, 2017March 31, 2023, is shown below on an amortized cost basis, net of allowance for credit losses, and on a fair value basis. Actual maturitydisposition dates could differ from contractual maturities due to call or prepayment provisions.
At March 31, 2023
Amortized
Cost, net		Fair
Value
Fixed maturities available for sale:
Due in one year or less$169,491 $170,003 
Due after one year through five years1,113,684 1,118,421 
Due after five years through ten years1,691,785 1,717,908 
Due after ten years through twenty years7,976,112 7,740,695 
Due after twenty years7,418,120 6,333,344 
Mortgage-backed and asset-backed securities124,744 126,514 
$18,493,936 $17,206,885 

15
        GL Q1 2023 FORM 10-Q
 September 30, 2017
 Amortized
Cost		 Fair Value
Fixed maturities available for sale:   
Due in one year or less$140,702
 $143,863
Due after one year through five years660,487
 705,847
Due after five years through ten years1,430,894
 1,604,091
Due after ten years through twenty years4,397,807
 5,084,516
Due after twenty years8,079,191
 8,893,450
Mortgage-backed and asset-backed securities205,499
 221,146
 $14,914,580
 $16,652,913

10
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 4—Investments (continued)
Analysis of Investment Operations: "Net investment income" for the three month periods ended March 31, 2023 and 2022 is summarized as follows:

Three Months Ended
March 31,
20232022% Change
Fixed maturities available for sale$232,299 $225,284 3 
Policy loans11,755 11,428 3 
Other long-term investments(1)
15,743 12,713 24 
Short-term investments1,595 2 
261,392 249,427 5 
Less investment expense(4,287)(4,533)(5)
Net investment income
$257,105 $244,894 5 
(1)For the three months ended March 31, 2023 and 2022, the investment funds, accounted for under the fair value option method, recorded $11.3 million and $10.7 million of distributions, respectively, in net investment income. Refer to Other Long-Term Investmentsbelowfor further discussion on the investment funds.


Selected information about sales of fixed maturities available for sale is as follows.follows:
Three Months Ended
March 31,
20232022
Fixed maturities available for sale:
Proceeds from sales(1)
$15,705 $75,116 
Gross realized gains— 773 
Gross realized losses(358)(3,679)
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Proceeds from sales$52,951
 $24,000
 $52,951
 $75,299
Gross realized gains4,851
 2,577
 4,851
 6,133
Gross realized losses—
 —
 —
 (214)
(1)There were no unsettled sales in the periods ended March 31, 2023 and 2022.


Fair Value Measurements:
The following table representsAn analysis of "Realized gains (losses)" is as follows:
Three Months Ended
March 31,
20232022
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)
$(357)$4,549 
Provision for credit losses(32,767)387 
Fair value option—change in fair value1,858 (5,338)
Other investments339 (6,842)
Realized gains (losses) from investments
(30,927)(7,244)
Applicable tax6,495 1,521 
Realized gains (losses), net of tax
$(24,432)$(5,723)
(1)During the fair valuethree months ended March 31, 2023 and 2022, the Company recorded $0 and $0 of exchanges of fixed maturities available for sale measured on a recurring basis.(noncash transactions) that resulted in $0 and $0, respectively, in realized gains (losses).

16
        GL Q1 2023 FORM 10-Q
Fair Value Measurements at September 30, 2017 using:
Description 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant Other Observable Inputs 
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total Fair
Value
Bonds:        
U.S. Government direct, guaranteed, and government-sponsored enterprises $—
 $399,687
 $—
 $399,687
States, municipalities, and political subdivisions 39,100
 1,249,004
 —
 1,288,104
Foreign governments —
 22,546
 —
 22,546
Corporates, by sector: 

 

 

 

Financial —
 3,537,728
 62,206
 3,599,934
Utilities —
 2,114,600
 155,324
 2,269,924
Energy —
 1,717,538
 41,742
 1,759,280
Other corporate sectors 3,225
 6,340,276
 325,211
 6,668,712
Total corporates 3,225
 13,710,142
 584,483
 14,297,850
Collateralized debt obligations —
 —
 69,768
 69,768
Other asset-backed securities —
 135,842
 14,383
 150,225
Redeemable preferred stocks, by sector: 

 

 

 

Financial —
 393,951
 —
 393,951
Utilities —
 30,782
 —
 30,782
Total redeemable preferred stocks —
 424,733
 —
 424,733
Total fixed maturities $42,325
 $15,941,954
 $668,634
 $16,652,913
Percent of total 0.3% 95.7% 4.0% 100.0%



11
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 4—Investments (continued)Fair Value Measurements:The following tables represent the fair value of fixed maturities measured on a recurring basis at March 31, 2023 and December 31, 2022:
Fair Value Measurement at March 31, 2023 Using:
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs (Level 3)		Total Fair
Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises$— $362,073 $— $362,073 
States, municipalities, and political subdivisions— 2,508,639 — 2,508,639 
Foreign governments— 42,520 — 42,520 
Corporates, by sector:
Financial— 4,445,091 133,716 4,578,807 
Utilities— 1,822,748 112,359 1,935,107 
Energy— 1,381,989 10,916 1,392,905 
Other corporate sectors— 6,045,672 214,648 6,260,320 
Total corporates— 13,695,500 471,639 14,167,139 
Collateralized debt obligations— — 45,502 45,502 
Other asset-backed securities— 81,012 — 81,012 
Total fixed maturities
$— $16,689,744 $517,141 $17,206,885 
Percentage of total— %97 %3 %100 %

Fair Value Measurement at December 31, 2022 Using:
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs (Level 2)		Significant
Unobservable
Inputs (Level 3)		Total Fair
Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises$— $355,498 $— $355,498 
States, municipalities, and political subdivisions— 2,309,911 — 2,309,911 
Foreign governments— 42,464 — 42,464 
Corporates, by sector:
Financial— 4,332,495 133,936 4,466,431 
Utilities— 1,723,832 111,315 1,835,147 
Energy— 1,346,212 11,100 1,357,312 
Other corporate sectors— 5,785,442 221,732 6,007,174 
Total corporates— 13,187,981 478,083 13,666,064 
Collateralized debt obligations— — 50,364 50,364 
Other asset-backed securities— 79,064 — 79,064 
Total fixed maturities
$— $15,974,918 $528,447 $16,503,365 
Percentage of total— %97 %3 %100 %

17
        GL Q1 2023 FORM 10-Q

Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table represents an analysis oftables represent changes in fixed maturities measured at fair value measurementson a recurring basis using significant unobservable inputs (Level 3).:
Analysis of Changes in Fair Value Measurements Using
Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Balance at January 1, 2023
$— $50,364 $478,083 $528,447 
Included in realized gains / losses— — — — 
Included in other comprehensive income— (4,542)5,370 828 
Acquisitions— — — — 
Sales— — — — 
Amortization— 1,141 2 1,143 
Other(1)
— (1,461)(11,816)(13,277)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at March 31, 2023
$— $45,502 $471,639 $517,141 
Percent of total fixed maturities— %— %3 %3 %
Significant Unobservable Inputs (Level 3)
 Nine Months Ended September 30, 2017
 Asset-
Backed
Securities		 Collateralized
Debt
Obligations		 
Corporates(1)
 Total
Balance at January 1, 2017$—
 $63,503
 $559,600
 $623,103
Total gains or losses:       
Included in realized gains/losses—
 —
 —
 —
Included in other comprehensive income595
 7,787
 10,614
 18,996
Acquisitions14,000
 —
 21,666
 35,666
Sales—
 —
 —
 —
Amortization—
 3,705
 14
 3,719
Other(2)
(212) (5,227) (7,411) (12,850)
Transfers in and/or out of Level 3(3)
—
 —
 —
 —
Balance at September 30, 2017$14,383
 $69,768
 $584,483
 $668,634
Percent of total fixed maturities0.1% 0.4% 3.5% 4.0%
        
 Nine Months Ended September 30, 2016
 Asset-
Backed
Securities		 Collateralized
Debt
Obligations		 
Corporates(1)
 Total
Balance at January 1, 2016$—
 $70,382
 $530,806
 $601,188
Total gains or losses:       
Included in realized gains/losses—
 —
 788
 788
Included in other comprehensive income—
 (3,879) 33,365
 29,486
Acquisitions—
 —
 33,662
 33,662
Sales—
 —
 —
 —
Amortization—
 3,511
 14
 3,525
Other(2)
—
 (6,732) (10,882) (17,614)
Transfers in and/or out of Level 3(3)
—
 —
 —
 —
Balance at September 30, 2016$—
 $63,282
 $587,753
 $651,035
Percent of total fixed maturities—% 0.4% 3.7% 4.1%
(1) Includes redeemable preferred stocks.
(2) Includes capitalized interest, foreign exchange adjustments, and principal repayments.
(3) (2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.



Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Asset-
backed Securities
Collateralized
Debt
Obligations		CorporatesTotal
Balance at January 1, 2022
$— $63,505 $641,688 $705,193 
Included in realized gains / losses— — — — 
Included in other comprehensive income— (3,809)(36,360)(40,169)
Acquisitions— — — — 
Sales— — — — 
Amortization— 1,123 1 1,124 
Other(1)
— (1,281)(19,359)(20,640)
Transfers into Level 3(2)
— — — — 
Transfers out of Level 3(2)
— — — — 
Balance at March 31, 2022
$— $59,538 $585,970 $645,508 
Percent of total fixed maturities— %— %3 %3 %
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments. 
(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.

12
18
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 4—Investments (continued)
The following table presents changes in unrealized gains and losses for the period included in accumulated other comprehensive income for assets held at the end of the reporting period for Level 3s:

Changes in Unrealized Gains (Losses) included in Accumulated Other Comprehensive Income for Assets Held at the End of the Period
Asset-
backed Securities		Collateralized
Debt
Obligations		CorporatesTotal
At March 31, 2023$— $(4,542)$5,370 $828 
At March 31, 2022— (3,809)(36,360)(40,169)
Other-Than-Temporary Impairments:

In accordance with the other-than-temporary impairment (OTTI) policy, the Company evaluated itsUnrealized Loss Analysis: The following table discloses information about fixed maturities available for sale in an unrealized loss positionposition.
Less than Twelve MonthsTwelve Months or LongerTotal
Number of issues (CUSIPs) held:
As of March 31, 2023624 1,290 1,914 
As of December 31, 20221,819 157 1,976 
Globe Life's entire fixed maturity portfolio consisted of 2,379 issues by 987 different issuers at March 31, 2023 and 2,328 issues by 979 different issuers at December 31, 2022. The weighted-average quality rating of all unrealized loss positions at amortized cost was A- as of March 31, 2023 and December 31, 2022.

The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at March 31, 2023 and December 31, 2022.
19
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to determine if there was any impairment for the quarter. Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Analysis of Gross Unrealized Investment Losses
At March 31, 2023
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$275,114 $(17,384)$84,691 $(10,098)$359,805 $(27,482)
States, municipalities, and political subdivisions601,542 (23,575)1,219,137 (403,354)1,820,679 (426,929)
Foreign governments15,491 (145)25,555 (11,137)41,046 (11,282)
Corporates, by sector:
Financial1,355,645 (92,771)1,482,482 (308,161)2,838,127 (400,932)
Utilities304,897 (14,438)474,873 (77,678)779,770 (92,116)
Energy319,199 (11,489)332,106 (58,433)651,305 (69,922)
Other corporate sectors1,211,339 (64,035)2,859,975 (470,663)4,071,314 (534,698)
Total corporates3,191,080 (182,733)5,149,436 (914,935)8,340,516 (1,097,668)
Collateralized debt obligations— — — — — — 
Other asset-backed securities25,733 (696)43,631 (5,454)69,364 (6,150)
Total investment grade securities4,108,960 (224,533)6,522,450 (1,344,978)10,631,410 (1,569,511)
Below investment grade securities:
States, municipalities, and political subdivisions— — — — — — 
Corporates, by sector:
Financial79,716 (9,059)106,971 (43,403)186,687 (52,462)
Utilities8,265 (662)20,166 (1,801)28,431 (2,463)
Energy— — 34,289 (10,416)34,289 (10,416)
Other corporate sectors71,156 (4,350)90,580 (18,342)161,736 (22,692)
Total corporates159,137 (14,071)252,006 (73,962)411,143 (88,033)
Collateralized debt obligations— — — — — — 
Other asset-backed securities— — 11,580 (808)11,580 (808)
Total below investment grade securities159,137 (14,071)263,586 (74,770)422,723 (88,841)
Total fixed maturities
$4,268,097 $(238,604)$6,786,036 $(1,419,748)$11,054,133 $(1,658,352)
Gross unrealized losses may fluctuate quarter over quarter due to adverse factors in the market that affect our holdings, such as changes in the 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, Torchmark has the ability and intent to hold these investments to recovery. Additionally, TorchmarkGlobe Life does not expectgenerally intend to sell and it is likely that management will not be required to sell any of its securitiesthe fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.

For the nine months ended September 30, 2017, the Company recorded $245 thousand ($159 thousand, net of tax) in OTTI. For the comparable period in 2016, the Company concluded that there were no other-than-temporary impairments.

Unrealized Loss Analysis:

The following table discloses information about fixed maturities available for sale in an unrealized loss position.
20
  
Less than
Twelve
Months
 
Twelve
Months
or Longer
 Total
Number of issues (CUSIP numbers) held:      
As of September 30, 2017 151
 109
 260
As of December 31, 2016 407
 94
 501
        GL Q1 2023 FORM 10-Q

Torchmark’s entire fixed maturity portfolio consisted of 1,514 issues at September 30, 2017 and 1,565 issues at December 31, 2016. The weighted average quality rating of all unrealized loss positions as of September 30, 2017 was BBB compared with BBB+ as of December 31, 2016.

13
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 4—Investments (continued)

The following table discloses unrealized investment losses by class and major sector of fixed maturities available for sale at September 30, 2017 for the period of time in a loss position. Torchmark considers these investments to be only temporarily impaired.
Analysis of Gross Unrealized Investment Losses
At December 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$349,887 $(38,218)$3,424 $(750)$353,311 $(38,968)
States, municipalities, and political subdivisions1,767,624 (453,149)95,124 (52,298)1,862,748 (505,447)
Foreign governments6,297 (201)25,134 (12,505)31,431 (12,706)
Corporates, by sector:
Financial2,837,918 (426,132)109,784 (42,173)2,947,702 (468,305)
Utilities1,088,219 (116,272)21,636 (6,268)1,109,855 (122,540)
Energy855,853 (91,755)— — 855,853 (91,755)
Other corporate sectors4,155,986 (665,831)94,299 (42,344)4,250,285 (708,175)
Total corporates8,937,976 (1,299,990)225,719 (90,785)9,163,695 (1,390,775)
Collateralized debt obligations— — — — — — 
Other asset-backed securities60,157 (5,223)7,960 (2,435)68,117 (7,658)
Total investment grade securities11,121,941 (1,796,781)357,361 (158,773)11,479,302 (1,955,554)
Below investment grade securities:
States, municipalities, and political subdivisions— — — — — — 
Corporates, by sector:
Financial120,377 (18,901)38,348 (17,283)158,725 (36,184)
Utilities27,722 (3,173)— — 27,722 (3,173)
Energy14,480 (2,182)20,075 (7,986)34,555 (10,168)
Other corporate sectors166,159 (25,962)6,670 (4,635)172,829 (30,597)
Total corporates328,738 (50,218)65,093 (29,904)393,831 (80,122)
Collateralized debt obligations— — — — — — 
Other asset-backed securities— — 10,874 (1,618)10,874 (1,618)
Total below investment grade securities328,738 (50,218)75,967 (31,522)404,705 (81,740)
Total fixed maturities
$11,450,679 $(1,846,999)$433,328 $(190,295)$11,884,007 $(2,037,294)
At September 30, 2017
21
        
GL Q1 2023 FORM 10-Q
  
Less than
Twelve Months
 
Twelve Months
or Longer
 Total
Description of Securities Fair Value 
Unrealized
Loss
 Fair Value 
Unrealized
Loss
 Fair Value 
Unrealized
Loss
Investment grade securities:            
Bonds:            
U.S. Government direct, guaranteed, and government-sponsored enterprises $97,370
 $(610) $5,422
 $(488) $102,792
 $(1,098)
States, municipalities and political subdivisions 10,115
 (70) 691
 (2) 10,806
 (72)

            
Corporates, by sector:            
Financial 94,944
 (1,024) 65,729
 (2,271) 160,673
 (3,295)
Utilities 101,687
 (1,643) 40,075
 (1,012) 141,762
 (2,655)
Energy 37,009
 (512) 93,841
 (6,555) 130,850
 (7,067)
Other corporate sectors 369,323
 (6,254) 247,324
 (11,047) 616,647
 (17,301)
Total corporates 602,963
 (9,433) 446,969
 (20,885) 1,049,932
 (30,318)
Other asset-backed securities 9,983
 (17) —
 —
 9,983
 (17)
Redeemable preferred stocks, by sector:            
Utilities 5,947
 (116) —
 —
 5,947
 (116)
Total redeemable preferred stocks 5,947
 (116) —
 —
 5,947
 (116)
Total investment grade securities 726,378
 (10,246) 453,082
 (21,375) 1,179,460
 (31,621)
Below investment grade securities:            
Bonds:            
States, municipalities and political subdivisions 269
 (36) —
 —
 269
 (36)
Corporates, by sector: 

 

 

 

    
Financial —
 —
 83,164
 (22,585) 83,164
 (22,585)
Energy —
 —
 78,721
 (21,003) 78,721
 (21,003)
Other corporate sectors —
 —
 45,330
 (5,369) 45,330
 (5,369)
Total corporates —
 —
 207,215
 (48,957) 207,215
 (48,957)
Collateralized debt obligations —
 —
 11,006
 (8,994) 11,006
 (8,994)
Redeemable preferred stocks, by sector:            
Financial —
 —
 24,080
 (3,030) 24,080
 (3,030)
Total redeemable preferred stocks —
 —
 24,080
 (3,030) 24,080
 (3,030)
Total below investment grade securities 269
 (36) 242,301
 (60,981) 242,570
 (61,017)
Total fixed maturities $726,647
 $(10,282) $695,383
 $(82,356) $1,422,030
 $(92,638)




14
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)


Note 5—Discontinued Operations

At December 31, 2015, Torchmark metFixed Maturities, Allowance for Credit Losses: A summary of the criteria to account for its Medicare Part D Prescription Drug Plan business as a discontinued operation. Historically, the business was a reportable segment. Effective July 1, 2016, Torchmark sold its Medicare Part D Prescription Drug Plan business to an unaffiliated third party.

The sale resulted in a net gain of $1.8 million ($1.2 million net of tax) in 2016. The operating results from discontinued operations are reflected in income for the nine months ended September 30, 2017. The remaining assets and liabilities reflected on the Torchmark balance sheet related to discontinued operations are receivables and payables associated with the 2016 and prior plan years that are expected to be settledactivity in the ordinary courseallowance for credit losses is as follows.
Three Months Ended
March 31,
20232022
Allowance for credit losses beginning balance
$— $387 
Additions to allowance for which credit losses were not previously recorded32,767 — 
Additions (reductions) to allowance for fixed maturities that previously had an allowance— — 
Reduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period— (387)
Allowance for credit losses ending balance
$32,767 $— 

As of business during 2017 and 2018.

The net assets related to discontinued operations at September 30, 2017March 31, 2023 and December 31, 2016 were2022, the Company did not have any fixed maturities in non-accrual status.

Other Long-Term Investments: Other long-term investments consist of the following assets:
March 31,
2023		December 31, 2022
Investment funds$789,197 $768,689 
Commercial mortgage loan participations204,275 181,305 
Other29,139 26,022 
Total
$1,022,611 $976,016 

The following table presents additional information about the Company's investment funds as follows:
 September 30,
2017		 December 31,
2016
Assets:   
Due premiums$3,945
 $8,840
Other receivables(1)
64,627
 118,692
Total assets related to discontinued operations68,572
 127,532

   
Liabilities:   
Risk sharing payable9,065
 8,374
Current and deferred income taxes payable1,630
 3,820
Other(2)
38,633
 15,230
Total liabilities related to discontinued operations49,328
 27,424

   
Net assets$19,244
 $100,108
(1) At September 30, 2017, other receivables included $65 million from the Centers for Medicareof March 31, 2023 and Medicaid Services (CMS). At December 31, 2016, other receivables included $502022 at fair value:
Fair ValueUnfunded Commitments
Investment CategoryMarch 31,
2023		December 31, 2022March 31,
2023		Redemption Term/Notice
Commercial mortgage loans$454,144 $431,405 $330,245 Fully redeemable and non-redeemable with varying terms.
Opportunistic credit157,899 158,524 — Initial 2 year lock on each new investment/semi-annual withdrawals thereafter/full redemption within 36 month period.
Infrastructure158,036 159,534 21,366 Fully redeemable and non-redeemable with varying terms.
Other19,118 19,226 120,079  
Total investment funds$789,197 $768,689 $471,690 

The Company had $21 million of capital called during the year from the Centers for Medicare and Medicaid Services (CMS) and $69existing investment funds. Our unfunded commitments were $472 million from drug manufacturer rebates.as of March 31, 2023.
(2) At September 30, 2017, the balance included $35.8 million due to CMS. At December 31, 2016, the balance included a $3.6 million contingent purchase price reserve.


15
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        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Commercial Mortgage Loan Participations (commercial mortgage loans):Summaries of commercial mortgage loans by property type and geographical location at March 31, 2023 and December 31, 2022 are as follows:
March 31, 2023December 31, 2022
Carrying Value% of TotalCarrying Value% of Total
Property type:
Mixed use$59,965 29 $62,375 34 
Hospitality28,033 14 27,796 15 
Retail23,744 12 15,342 9 
Industrial27,259 13 27,248 15 
Multi-family57,206 28 42,232 23 
Office11,137 6 8,101 5 
Total recorded investment207,344 102 183,094 101 
Less allowance for credit losses(3,069)(2)(1,789)(1)
Carrying value, net of allowance for credit losses
$204,275 100 $181,305 100 

March 31, 2023December 31, 2022
Carrying Value% of TotalCarrying Value% of Total
Geographic location:
California$64,990 32 $64,477 36 
Texas23,132 12 22,905 13 
New York27,570 14 19,167 11 
Washington14,939 7 14,925 8 
Massachusetts14,925 7 — — 
Florida33,217 16 33,182 18 
Other28,571 14 28,438 15 
Total recorded investment207,344 102 183,094 101 
Less allowance for credit losses(3,069)(2)(1,789)(1)
Carrying value, net of allowance for credit losses
$204,275 100 $181,305 100 
23
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables are reflective of the key factors, debt service coverage ratios, and loan-to-value (LTV) ratios that are utilized by management to monitor the performance of the portfolios. The Company only makes new investments in commercial mortgage loans that have a LTV ratio less than 80%. Generally, a higher LTV ratio and a lower debt service coverage ratio can potentially equate to higher risk of loss.
March 31, 2023
Recorded Investment
Debt Service Coverage Ratios(1)
<1.00x1.00x—1.20x>1.20xTotal% of Total
Loan-to-value ratio(2):
Less than 70%$24,235 $123,466 $20,430 $168,131 81 
70% to 80%— 7,222 1,238 8,460 4 
81% to 90%8,307 — — 8,307 4 
Greater than 90%7,035 15,411 — 22,446 11 
Total$39,577 $146,099 $21,668 207,344 100 
Less allowance for credit losses(3,069)
Total, net of allowance for credit losses
$204,275 
(1)Annual net operating income divided by annual mortgage debt service (principal and interest).
(2)Loan balance divided by appraised value, including planned renovations and stabilized occupancy, at origination. Updated internal valuations are used when a loan is materially underperforming.

December 31, 2022
Recorded Investment
Debt Service Coverage Ratios(1)
<1.00x1.00x—1.20x>1.20xTotal% of Total
Loan-to-value ratio(2):
Less than 70%$24,221 $108,156 $12,018 $144,395 79 
70% to 80%— 22,120 1,238 23,358 13 
81% to 90%8,307 — — 8,307 4 
Greater than 90%7,034 — — 7,034 4 
Total$39,562 $130,276 $13,256 183,094 100 
Less allowance for credit losses(1,789)
Total, net of allowance for credit losses
$181,305 
(1)Annual net operating income divided by annual mortgage debt service (principal and interest).
(2)Loan balance divided by appraised value, including planned renovations and stabilized occupancy, at origination. Updated internal valuations are used when a loan is materially underperforming.

As of March 31, 2023, the Company evaluated the commercial mortgage loan portfolio on a pool basis to determine the allowance for credit losses. At the end of the period, the Company had 25 loans in the portfolio. For the three months ended March 31, 2023, the allowance for credit losses increased $1.3 million. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.
Three Months Ended
March 31,
20232022
Allowance for credit losses beginning balance
$1,789 $827 
Provision (reversal) for credit losses1,280 — 
Allowance for credit losses ending balance
$3,069 $827 

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        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
There were no delinquent commercial mortgage loans as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the Company had no commercial mortgage loan in non-accrual status. The Company's unfunded commitment balance to commercial loan borrowers was $28 million as of March 31, 2023.


Note 5—Discontinued Operations (continued)


Income from discontinued operations for the three and nine months ended September 30, 2017 and 2016 was as follows:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Revenue:    
 
Health premium$(48) $53,632
 $(343) $165,105

    
 
Benefits and expenses:    
 
Health policyholder benefits(115) 33,331
 3,817
 146,683
Amortization of deferred acquisition costs—
 1,018
 —
 2,958
Commissions, premium taxes, and non-deferred acquisition expenses53
 3,352
 783
 12,253
Other operating expense32
 1,222
 809
 4,512
Total benefits and expenses(30) 38,923
 5,409
 166,406

    
 
Income (loss) before income taxes for discontinued operations(18) 14,709
 (5,752) (1,301)
Gain from sale of discontinued operations—
 613
 —
 613
Income tax benefit (expense)6
 (5,363) 2,013
 241
Income (loss) from discontinued operations$(12) $9,959
 $(3,739) $(447)

Operating cash flows of the discontinued operations for the nine months ended September 30, 2017 and 2016 were as follows:
 Nine Months Ended 
 September 30,
 2017 2016
Net cash provided from (used for) discontinued operations$77,125
 $82,565

Note 6—Commitments and Contingencies


Litigation:

Guarantees: The Parent Company has guaranteed letters of credit in connection with its credit facility with a group of banks. The letters of credit were issued by TMK Re, Ltd., a wholly-owned subsidiary, to secure TMK Re, Ltd.’s obligation for claims on certain policies reinsured by TMK Re, Ltd. that were sold by other Globe Life insurance subsidiaries. These letters of credit facilitate TMK Re, Ltd.’s ability to reinsure the business of Globe Life's insurance carriers. The agreement was amended on September 30, 2021 and now expires in 2026. The maximum amount of letters of credit available is $250 million. The Parent Company would be liable to the extent that TMK Re, Ltd. does not pay the reinsured party. The amount outstanding at March 31, 2023 was $115 million.
Torchmark
Litigation: Globe Life Inc. and its subsidiaries, in common with the insurance industry in general, are subject to litigation, involving various matters where we are eitherincluding 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 defendant or the plaintiff. TorchmarkParent Company's insurance subsidiaries, are also currently the subjectemployment discrimination, and miscellaneous other causes of audits regarding the identification, reporting and escheatment of unclaimed property arising from life insurance policies and a limited number of annuity contracts. In each of these matters, basedaction. 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 or audits will have a material adverse effect on Torchmark’sGlobe Life's financial condition, future operating results or liquidity.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.

As previously reported, litigation was filed on February 10, 2015 against Torchmark subsidiary, Globe Life And Accident Insurance Company (Globe) in Oklahoma County, Oklahoma District Court (Proctor v. Globe Life And Accident Insurance Company, Case No. CJ-2015-838) asserting claims for breach of the implied covenants of good faith and fair dealing and for false representation, deceit and conversion in connection with Globe’s denial of plaintiff’s claim on a life insurance policy for non-payment of premium. Plaintiff, who had alleged that Globe had improperly retained 12 monthly premium payments on a policy that was treated as lapsed or not returned to in-force status, seeks actual and punitive damages, prejudgment interest, attorney fees, costs and other relief. Plaintiff subsequently amended his


16
25
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 6—CommitmentsPolicy Liabilities

The liability for future policy benefits is determined based on the net level premium method, which requires the liability be calculated as the present value of estimated future policyholder benefits and Contingencies (continued)the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders.


The following tables summarize balances and changes in the net liability for future policy benefits, before reinsurance, for traditional life long-duration contracts:
Life
Present value of expected future net premiums
American IncomeDTCLiberty NationalOtherTotal
Balance at January 1, 2022
$4,925,192 $7,264,905 $1,332,469 $559,972 $14,082,538 
Beginning balance at original discount rates3,906,098 5,533,741 1,040,242 416,141 10,896,222 
Effect of changes in assumptions of future cash flows— — — — — 
Effect of actual variances from expected experience(4,315)(29,595)(625)1,652 (32,883)
Adjusted balance at January 1, 2022
3,901,783 5,504,146 1,039,617 417,793 10,863,339 
Issuances(1)
215,926 173,775 22,965 7,300 419,966 
Interest accrual(2)
43,074 67,608 12,810 5,172 128,664 
Net premiums collected(3)
(120,203)(149,757)(31,627)(10,831)(312,418)
Effect of changes in the foreign exchange rate2,900 — — — 2,900 
Ending balance at original discount rates4,043,480 5,595,772 1,043,765 419,434 11,102,451 
Effect of change from original to current discount rates603,267 1,114,883 181,223 92,398 1,991,771 
Balance at March 31, 2022
$4,646,747 $6,710,655 $1,224,988 $511,832 $13,094,222 
Balance at January 1, 2023
$4,273,156 $5,910,224 $1,094,407 $470,741 $11,748,528 
Beginning balance at original discount rates4,246,723 5,680,864 1,066,123 449,209 11,442,919 
Effect of changes in assumptions of future cash flows— — — — — 
Effect of actual variances from expected experience(29,981)(47,988)(5,590)(1,886)(85,445)
Adjusted balance at January 1, 2023
4,216,742 5,632,876 1,060,533 447,323 11,357,474 
Issuances(1)
192,555 168,952 30,142 7,241 398,890 
Interest accrual(2)
47,898 70,991 13,288 5,670 137,847 
Net premiums collected(3)
(127,239)(153,919)(33,188)(11,557)(325,903)
Effect of changes in the foreign exchange rate(3,999)— — — (3,999)
Ending balance at original discount rates4,325,957 5,718,900 1,070,775 448,677 11,564,309 
Effect of change from original to current discount rates141,680 391,650 57,308 34,379 625,017 
Balance at March 31, 2023
$4,467,637 $6,110,550 $1,128,083 $483,056 $12,189,326 
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio, and the gross premiums collected during the period on the in-force business.




26
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Life
Present value of expected future policy benefits
American IncomeDTCLiberty NationalOtherTotal
Balance at January 1, 2022
$11,773,519 $11,859,408 $4,542,697 $5,488,684 $33,664,308 
Beginning balance at original discount rates7,744,201 8,157,259 3,206,164 3,267,306 22,374,930 
Effect of changes in assumptions of future cash flows— — — — — 
Effect of actual variances from expected experience(2,959)(25,850)153 1,680 (26,976)
Adjusted balance at January 1, 2022
7,741,242 8,131,409 3,206,317 3,268,986 22,347,954 
Issuances(1)
215,926 173,775 22,965 7,300 419,966 
Interest accrual(2)
100,336 106,928 42,230 48,280 297,774 
Benefit payments(3)
(104,321)(173,611)(63,457)(34,297)(375,686)
Effect of changes in the foreign exchange rate6,511 — — — 6,511 
Ending balance at original discount rates7,959,694 8,238,501 3,208,055 3,290,269 22,696,519 
Effect of change from original to current discount rates2,692,562 2,511,848 858,179 1,558,106 7,620,695 
Balance at March 31, 2022
$10,652,256 $10,750,349 $4,066,234 $4,848,375 $30,317,214 
complaint
Balance at January 1, 2023
$9,119,104 $9,225,451 $3,429,256 $3,976,150 $25,749,961 
Beginning balance at original discount rates8,409,761 8,477,892 3,272,980 3,403,704 23,564,337 
Effect of changes in assumptions of future cash flows— — — — — 
Effect of actual variances from expected experience(31,526)(48,947)(7,054)(2,896)(90,423)
Adjusted balance at January 1, 2023
8,378,235 8,428,945 3,265,926 3,400,808 23,473,914 
Issuances(1)
192,555 168,952 30,142 7,241 398,890 
Interest accrual(2)
109,329 112,768 43,256 50,378 315,731 
Benefit payments(3)
(96,674)(147,061)(54,730)(30,892)(329,357)
Effect of changes in the foreign exchange rate(9,711)— — — (9,711)
Ending balance at original discount rates8,573,734 8,563,604 3,284,594 3,427,535 23,849,467 
Effect of change from original to current discount rates1,063,729 1,061,076 274,418 738,992 3,138,215 
Balance at March 31, 2023
$9,637,463 $9,624,680 $3,559,012 $4,166,527 $26,987,682 
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to add allegationsnew policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of conversionthe expected future policy benefits, as well as the interest on actual benefits and civil theftexpenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period due to death, lapse, and maturity benefit payments based on behalfthe revised expected assumptions.

27
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Life
Net liability for future policy benefits as of March 31, 2022
American IncomeDTCLiberty NationalOtherTotal
Net liability for future policy benefits at original discount rates
$3,916,214 $2,642,729 $2,164,290 $2,870,835 $11,594,068 
Effect of changes in discount rate assumptions2,089,295 1,396,965 676,956 1,465,708 5,628,924 
Net liability for future policy benefits at current discount rates
6,005,509 4,039,694 2,841,246 4,336,543 17,222,992 
Other Adjustments(1)
(11)2,820 (10,446)(43,598)(51,235)
Net liability for future policy benefits, after other adjustments, at current discount rates
$6,005,498 $4,042,514 $2,830,800 $4,292,945 $17,171,757 

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

Life
Net liability for future policy benefits as of March 31, 2023
American IncomeDTCLiberty NationalOtherTotal
Net liability for future policy benefits at original discount rates
$4,247,777 $2,844,704 $2,213,819 $2,978,858 $12,285,158 
Effect of changes in discount rate assumptions922,049 669,426 217,110 704,613 2,513,198 
Net liability for future policy benefits at current discount rates
5,169,826 3,514,130 2,430,929 3,683,471 14,798,356 
Other Adjustments(1)
(46)4,546 486 (36,765)(31,779)
Net liability for future policy benefits, after other adjustments, at current discount rates
$5,169,780 $3,518,676 $2,431,415 $3,646,706 $14,766,577 

(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.
28
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables summarize balances and changes in the net liability for future policy benefits for long-duration health contracts:
Health
Present value of expected future net premiums
United AmericanFamily HeritageLiberty NationalAmerican IncomeDTCTotal
Balance at January 1, 2022
$3,611,659 $1,944,714 $517,368 $222,553 $121,724 $6,418,018 
Beginning balance at original discount rates2,949,851 1,688,590 414,409 178,801 96,776 5,328,427 
Effect of changes in assumptions of future cash flows— — — — — — 
Effect of actual variances from expected experience(49,560)(15,162)(15,462)(2,465)(1,880)(84,529)
Adjusted balance at January 1, 2022
2,900,291 1,673,428 398,947 176,336 94,896 5,243,898 
Issuances(1)
90,034 53,518 10,815 10,452 880 165,699 
Interest accrual(2)
30,339 14,940 4,872 1,831 1,182 53,164 
Net premiums collected(3)
(62,895)(42,751)(12,883)(5,252)(2,550)(126,331)
Effect of changes in the foreign exchange rate— — — 312 — 312 
Ending balance at original discount rates2,957,769 1,699,135 401,751 183,679 94,408 5,336,742 
Effect of change from original to current discount rates379,383 91,102 61,701 24,385 15,326 571,897 
Balance at March 31, 2022
$3,337,152 $1,790,237 $463,452 $208,064 $109,734 $5,908,639 
Balance at January 1, 2023
$2,908,501 $1,594,992 $423,490 $190,296 $90,143 $5,207,422 
Beginning balance at original discount rates2,941,261 1,729,219 415,442 192,631 87,751 5,366,304 
Effect of changes in assumptions of future cash flows— — — — — — 
Effect of actual variances from expected experience(34,132)(18,758)(16,585)(1,621)(2,573)(73,669)
Adjusted balance at January 1, 2023
2,907,129 1,710,461 398,857 191,010 85,178 5,292,635 
Issuances(1)
75,839 67,787 13,303 10,212 2,392 169,533 
Interest accrual(2)
31,587 16,199 4,890 2,036 1,057 55,769 
Net premiums collected(3)
(65,914)(43,979)(12,403)(5,424)(2,661)(130,381)
Effect of changes in the foreign exchange rate— — — (388)— (388)
Ending balance at original discount rates2,948,641 1,750,468 404,647 197,446 85,966 5,387,168 
Effect of change from original to current discount rates49,082 (86,054)16,800 3,220 4,277 (12,675)
Balance at March 31, 2023
$2,997,723 $1,664,414 $421,447 $200,666 $90,243 $5,374,493 
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio, and the gross premiums collected during the period on the in-force business.









29
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Health
Present value of expected future policy benefits
United AmericanFamily HeritageLiberty NationalAmerican IncomeDTCTotal
Balance at January 1, 2022
$3,810,559 $3,840,322 $1,201,317 $380,915 $119,888 $9,353,001 
Beginning balance at original discount rates3,090,901 3,193,342 921,608 285,604 95,628 7,587,083 
Effect of changes in assumptions of future cash flows— — — — — — 
Effect of actual variances from expected experience(50,453)(15,668)(15,790)(2,645)(2,025)(86,581)
Adjusted balance at January 1, 2022
3,040,448 3,177,674 905,818 282,959 93,603 7,500,502 
Issuances(1)
89,904 53,518 10,866 10,452 876 165,616 
Interest accrual(2)
32,308 29,583 12,120 3,432 1,182 78,625 
Benefit payments(3)
(67,243)(28,494)(23,065)(5,044)(3,389)(127,235)
Effect of changes in the foreign exchange rate— — — 557 — 557 
Ending balance at original discount rates3,095,417 3,232,281 905,739 292,356 92,272 7,618,065 
Effect of change from original to current discount rates413,068 244,358 176,686 59,275 14,762 908,149 
Balance at March 31, 2022
$3,508,485 $3,476,639 $1,082,425 $351,631 $107,034 $8,526,214 

Balance at January 1, 2023
$3,046,829 $3,005,664 $941,574 $312,750 $87,532 $7,394,349 
Beginning balance at original discount rates3,080,633 3,336,344 904,865 303,713 85,212 7,710,767 
Effect of changes in assumptions of future cash flows— — — — — — 
Effect of actual variances from expected experience(31,443)(19,779)(15,995)(1,578)(2,302)(71,097)
Adjusted balance at January 1, 2023
3,049,190 3,316,565 888,870 302,135 82,910 7,639,670 
Issuances(1)
75,683 67,787 13,285 10,212 2,388 169,355 
Interest accrual(2)
33,480 32,289 11,840 3,668 1,057 82,334 
Benefit payments(3)
(78,563)(29,261)(23,976)(7,137)(3,354)(142,291)
Effect of changes in the foreign exchange rate— — — (708)— (708)
Ending balance at original discount rates3,079,790 3,387,380 890,019 308,170 83,001 7,748,360 
Effect of change from original to current discount rates52,672 (212,708)59,977 18,363 4,089 (77,607)
Balance at March 31, 2023
$3,132,462 $3,174,672 $949,996 $326,533 $87,090 $7,670,753 
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period due to death, lapse, and maturity benefit payments based on the revised expected assumptions.

30
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Health
Net liability for future policy benefits as of March 31, 2022
United AmericanFamily HeritageLiberty NationalAmerican IncomeDirect to ConsumerTotal
Net liability for future policy benefits at original discount rates
$137,648 $1,533,146 $503,988 $108,677 $(2,136)$2,281,323 
Effect of changes in discount rate assumptions33,685 153,256 114,985 34,890 (564)336,252 
Net liability for future policy benefits at current discount rates
171,333 1,686,402 618,973 143,567 (2,700)2,617,575 
Other Adjustments(1,812)(10,847)1,508 12 3,812 (7,327)
Net liability for future policy benefits, after other adjustments, at current discount rates
$169,521 $1,675,555 $620,481 $143,579 $1,112 $2,610,248 
(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.

Health
Net liability for future policy benefits as of March 31, 2023
United AmericanFamily HeritageLiberty NationalAmerican IncomeDirect to ConsumerTotal
Net liability for future policy benefits at original discount rates
131,149 1,636,912 485,372 110,724 (2,965)2,361,192 
Effect of changes in discount rate assumptions3,590 (126,654)43,177 15,143 (188)(64,932)
Net liability for future policy benefits at current discount rates
134,739 1,510,258 528,549 125,867 (3,153)2,296,260 
Other Adjustments1,771 (9,362)4,348 333 4,162 1,252 
Net liability for future policy benefits, after other adjustments, at current discount rates
$136,510 $1,500,896 $532,897 $126,200 $1,009 $2,297,512 
(1)Other adjustments include the Company's reinsurance recoverable and the effects of capping and flooring the liability.


During the three-month periods ended March 31, 2023 and 2022, the Company's results for actual variances from expected experience produced a purported classnet reserve remeasurement gain of Globe’s U.S. policyholders who$659 thousand and a net reserve remeasurement loss of $3.8 million in the Condensed Consolidated Statements of Operations, respectively. The variance of actual experience from expected experience during the first quarter of 2023 was primarily due to favorable variances from mortality assumptions as compared to actual experience in our life insurance segment (a $2.7 million gain), and unfavorable variances from morbidity assumptions as compared to actual experience in our health insurance segment (a $2.0 million loss). The variance of actual experience from expected experience during the first quarter of 2022 was primarily due to unfavorable variances from mortality assumptions as compared to actual experience in our life insurance segment (a $5.8 million loss), and favorable variances from morbidity assumptions as compared to actual experience in our health insurance segment (a $2.0 million gain). The life segment has experienced lower claims in the first quarter of 2023 versus the prior year mainly driven by lower excess claims due to COVID and non-COVID causes, which was seen in the American Income, Direct to Consumer, and Liberty National channels. The health segment's utilization has returned to normal levels in 2023, specifically in the United American and Liberty National channels. There were no changes to the inputs, judgments, assumptions and methods used in measuring the liability for future policy benefits during the three-month periods ended March 31, 2023 and 2022.


31
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table reconciles the liability for future policy benefits to the Consolidated Balance Sheets as of March 31, 2023:
At Original Discount RatesAt Current Discount Rates
As of March 31,As of March 31,
2023202220232022
Life(1):
American Income$4,247,758 $3,916,187 $5,169,780 $6,005,498 
Direct to Consumer2,844,707 2,642,729 3,518,676 4,042,514 
Liberty National2,206,288 2,153,030 2,431,415 2,830,800 
Other2,952,802 2,846,161 3,646,706 4,292,945 
Net liability for future policy benefits—long duration life12,251,555 11,558,107 14,766,577 17,171,757 
Health(1):
United American130,992 135,891 136,510 169,521 
Family Heritage1,626,881 1,524,185 1,500,896 1,675,555 
Liberty National488,546 505,319 532,897 620,481 
American Income111,096 108,693 126,200 143,579 
Direct to Consumer961 1,004 1,009 1,112 
Net liability for future policy benefits—long duration health2,358,476 2,275,092 2,297,512 2,610,248 
Deferred profit liability177,248 184,451 177,248 184,451 
Deferred annuity907,797 1,027,087 907,797 1,027,087 
Interest sensitive life737,900 744,244 737,900 744,244 
Other9,540 8,118 9,540 8,118 
Total future policy benefits
$16,442,516 $15,797,099 $18,896,574 $21,745,905 
(1)Balances are presented net of the reinsurance recoverable and the effects of flooring the liability.

The following tables provide the weighted-average original and current discount rates for the liability for future policy benefits and the additional insurance liabilities for the periods ended March 31, 2023 and 2022:
Life
Weighted-average Discount Rates
March 31, 2023March 31, 2022
American IncomeDTCLiberty NationalOtherAmerican IncomeDTCLiberty NationalOther
Original discount rate5.8 %6.0 %5.6 %6.2 %5.8 %6.0 %5.6 %6.2 %
Current discount rate4.9 %5.0 %5.0 %5.0 %4.0 %4.0 %3.9 %3.9 %

Health
Weighted-average Discount Rates
March 31, 2023March 31, 2022
United AmericanFamily HeritageLiberty NationalAmerican IncomeDTCUnited AmericanFamily HeritageLiberty NationalAmerican IncomeDTC
Original discount rate5.2 %4.3 %5.8 %5.9 %5.2 %5.2 %4.4 %5.8 %5.9 %5.2 %
Current discount rate4.8 %4.9 %4.9 %4.8 %4.8 %3.8 %3.9 %3.6 %3.8 %3.8 %


32
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table provides the weighted-average durations of the liability for future policy benefits and the additional insurance liabilities for the periods ended March 31, 2023 and 2022:
March 31,
20232022
At original discount ratesAt current discount ratesAt original discount ratesAt current discount rates
Life
American Income22.9023.3322.8023.78
Direct to Consumer20.2421.8220.8122.93
Liberty National14.9415.6315.0816.85
Other16.5218.2316.7619.59
Health
United American11.4010.8011.6811.83
Family Heritage14.9114.4315.2815.80
Liberty National9.319.669.0110.11
American Income12.1512.7412.4513.95
Direct to Consumer11.4010.8011.6811.83

The following tables summarize the amount of gross premiums and interest, net of reinsurance, related to long duration life and health contracts that are recognized in the Condensed Consolidated Statements of Operations:
Life
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
Gross
Premiums		Interest
expense		Gross
Premiums		Interest
expense
American Income$387,145 $61,431 $369,737 $57,262 
Direct to Consumer244,707 41,714 242,662 39,292 
Liberty National84,072 29,769 79,348 29,285 
Other51,835 44,275 52,387 42,697 
Total$767,759 $177,189 $744,134 $168,536 

Health
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
Gross
Premiums		Interest
expense		Gross
Premiums		Interest
expense
United American$97,833 $1,822 $92,266 $1,914 
Family Heritage96,090 15,977 89,540 14,545 
Liberty National46,745 6,920 47,496 7,226 
American Income28,096 1,632 27,937 1,601 
Direct to Consumer3,542 — 3,536 — 
Total$272,306 $26,351 $260,775 $25,286 

Gross premiums are included within life and health premium on the Condensed Consolidated Statements of Operations, while the related interest expense is included in life and health policyholder benefits.

33
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables provide the undiscounted and discounted expected future net premiums, expected future gross premiums and expected future policy benefits, at both original and current discount rates, for life and health contracts:
Life
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
Not discountedAt original discount ratesAt current discount ratesNot discountedAt original discount ratesAt current discount rates
American Income
PV of expected future net premiums$7,617,532 $4,325,957 $4,467,637 $7,115,131 $4,043,480 $4,646,747 
PV of expected future gross premiums23,041,514 13,054,486 13,575,751 21,851,854 12,374,587 14,324,455 
PV of expected future policy benefits28,821,998 8,573,734 9,637,463 26,930,450 7,959,694 10,652,256 
DTC
PV of expected future net premiums$10,832,386 $5,718,900 $6,110,550 $10,630,110 $5,595,772 $6,710,655 
PV of expected future gross premiums17,479,516 9,165,113 9,773,835 17,414,120 9,103,648 10,912,941 
PV of expected future policy benefits25,582,750 8,563,604 9,624,680 24,876,834 8,238,501 10,750,349 
Liberty National
PV of expected future net premiums$1,889,419 $1,070,775 $1,128,083 $1,855,371 $1,043,765 $1,224,988 
PV of expected future gross premiums4,453,139 2,599,082 2,667,795 4,265,146 2,485,460 2,848,626 
PV of expected future policy benefits8,658,766 3,284,594 3,559,012 8,514,395 3,208,055 4,066,234 
Other
PV of expected future net premiums$919,924 $448,677 $483,056 $869,727 $419,434 $511,832 
PV of expected future gross premiums3,798,669 1,920,302 2,126,949 3,907,011 1,950,624 2,441,512 
PV of expected future policy benefits12,392,224 3,427,535 4,166,527 12,277,130 3,290,269 4,848,375 
Total
PV of expected future net premiums$21,259,261 $11,564,309 $12,189,326 $20,470,339 $11,102,451 $13,094,222 
PV of expected future gross premiums48,772,838 26,738,983 28,144,330 47,438,131 25,914,319 30,527,534 
PV of expected future policy benefits75,455,738 23,849,467 26,987,682 72,598,809 22,696,519 30,317,214 

As of March 31, 2023 for the life segment using current discount rates, the Company anticipates $12.2 billion of expected future net premiums and $28.1 billion of expected future gross premiums. As of March 31, 2022 using current discount rates, the Company anticipated $13.1 billion in expected future net premiums and $30.5 billion of expected future gross premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.
.
34
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Health
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
Not discountedAt original discount ratesAt current discount ratesNot discountedAt original discount ratesAt current discount rates
United American
PV of expected future net premiums$4,685,306 $2,948,641 $2,997,723 $4,763,592 $2,957,769 $3,337,152 
PV of expected future gross premiums6,783,819 4,279,547 4,346,007 6,781,444 4,226,705 4,765,664 
PV of expected future policy benefits4,909,212 3,079,790 3,132,462 5,057,861 3,095,417 3,508,485 
Family Heritage
PV of expected future net premiums$2,908,079 $1,750,468 $1,664,414 $2,784,235 $1,699,135 $1,790,237 
PV of expected future gross premiums6,442,316 3,846,392 3,682,300 5,897,650 3,570,212 3,791,575 
PV of expected future policy benefits6,358,594 3,387,380 3,174,672 6,004,155 3,232,281 3,476,639 
Liberty National
PV of expected future net premiums$634,061 $404,647 $421,447 $641,225 $401,751 $463,452 
PV of expected future gross premiums2,232,290 1,396,334 1,468,763 2,174,779 1,356,873 1,577,158 
PV of expected future policy benefits1,575,745 890,019 949,996 1,594,836 905,739 1,082,425 
American Income
PV of expected future net premiums$351,655 $197,446 $200,666 $323,828 $183,679 $208,064 
PV of expected future gross premiums1,760,671 984,216 1,037,339 1,723,857 963,321 1,130,227 
PV of expected future policy benefits626,151 308,170 326,533 599,187 292,356 351,631 
Direct to Consumer
PV of expected future net premiums$131,187 $85,966 $90,243 $148,614 $94,408 $109,734 
PV of expected future gross premiums171,266 112,442 118,105 204,317 130,162 151,140 
PV of expected future policy benefits124,597 83,001 87,090 143,711 92,272 107,034 
Total
PV of expected future net premiums8,710,288 5,387,168 5,374,493 8,661,494 5,336,742 5,908,639 
PV of expected future gross premiums17,390,362 10,618,931 10,652,514 16,782,047 10,247,273 11,415,764 
PV of expected future policy benefits13,594,299 7,748,360 7,670,753 13,399,750 7,618,065 8,526,214 

As of March 31, 2023 for the health segment using current discount rates, the Company anticipates $5.4 billion of expected future net premiums and $10.6 billion of expected future gross premiums. As of March 31, 2022 using current discount rates, the Company anticipated $5.9 billion in expected future net premiums and $11.4 billion of expected future gross premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.


35
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table summarizes the balances of, and changes in, policyholders’ account balances as of March 31, 2023 and 2022:
Policyholders' Account Balances
20232022
Interest Sensitive LifeDeferred AnnuityOther Policyholders' FundsInterest Sensitive LifeDeferred AnnuityOther Policyholders' Funds
Balance at January 1,
$739,105 954,318 123,234 $745,335 $1,033,525 $99,468 
Issuances— 202 — — 340 — 
Premiums received6,030 4,776 21,662 6,297 8,216 2,044 
Policy charges(3,319)— — (3,474)— — 
Surrenders and withdrawals(5,384)(43,533)(3,303)(5,280)(11,873)(2,805)
Benefit payments(7,844)(15,784)— (8,999)(12,073)— 
Interest credited7,135 7,560 1,238 7,170 8,290 1,125 
Other2,177 258 (145)3,195 662 292 
Balance at March 31,
$737,900 $907,797 $142,686 $744,244 $1,027,087 $100,124 

Weighted-average credit rate3.92 %3.29 %3.78 %3.91 %3.26 %4.58 %
Net amount at risk$1,847,128 N/AN/A$1,952,631 N/AN/A
Cash surrender value676,247 907,797 142,686 693,201 1,027,064 100,124 

The following tables present the policyholders' account balances by range of guaranteed minimum crediting rates and the related range of difference, if any, in basis points between rates being credited to policy holders and the respective guaranteed minimums:
At March 31, 2023
Range of guaranteed minimum crediting rates
Interest Sensitive Life(1)
Deferred Annuity(1)
Other Policyholders' Funds(1)
At guaranteed minimum
Less than 3.00%$— $1,971 $43,191 
3.00%-3.99%28,956 698,952 4,097 
4.00%-4.99%619,411 206,874 57,596 
Greater than 5.00%89,533 — 37,802 
Total
$737,900 $907,797 $142,686 
(1)All of the Company's policyholders' account balances had paid premiums retained by Globe when their policies were lapsed and not reinstatedactual crediting rates at the timeguaranteed minimum.

At March 31, 2022
Range of guaranteed minimum crediting rates
Interest Sensitive Life(1)
Deferred Annuity(1)
Other Policyholders' Funds(1)
At guaranteed minimum
Less than 3.00%$— $2,254 $— 
3.00%-3.99%28,684 811,865 2,911 
4.00%-4.99%626,179 212,968 58,990 
Greater than 5.00%89,381 — 38,223 
Total
$744,244 $1,027,087 $100,124 
(1)All of the premium payments. Company's policyholders' account balances had minimum crediting rates at the guaranteed minimum.
36
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe removedLife Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 7—Deferred Acquisition Costs

The following tables roll forward the casedeferred policy acquisition costs for the three months ended March 31, 2023 and 2022:
Life
American IncomeDTCLiberty NationalOtherTotal
Balance at January 1, 2022
$1,960,254 $1,583,695 $566,419 $301,647 $4,412,015 
Capitalizations114,428 48,216 20,465 3,487 186,596 
Amortization expense(33,513)(23,172)(11,046)(4,198)(71,929)
Foreign exchange adjustment1,738 — — — 1,738 
Experience adjustment— — — — — 
Balance at March 31, 2022
$2,042,907 $1,608,739 $575,838 $300,936 $4,528,420 
Balance at January 1, 2023
$2,258,291 $1,676,931 $610,723 $298,346 $4,844,291 
Capitalizations115,395 47,410 24,221 3,321 190,347 
Amortization expense(38,299)(24,753)(12,412)(4,125)(79,589)
Foreign exchange adjustment(2,787)— — — (2,787)
Experience adjustment— — — — — 
Balance at March 31, 2023
$2,332,600 $1,699,588 $622,532 $297,542 $4,952,262 

Health
United AmericanFamily HeritageLiberty NationalAmerican IncomeDTCTotal
Balance at January 1, 2022
$81,140 $388,967 $127,537 $49,406 $2,032 $649,082 
Capitalizations580 12,363 4,121 3,155 — 20,219 
Amortization expense(1,516)(6,405)(3,320)(829)(44)(12,114)
Foreign exchange adjustment— — — 88 — 88 
Experience adjustment— — — — — — 
Balance at March 31, 2022
$80,204 $394,925 $128,338 $51,820 $1,988 $657,275 
Balance at January 1, 2023
$77,394 $416,608 $133,096 $57,811 $1,854 $686,763 
Capitalizations507 15,097 4,882 3,143 — 23,629 
Amortization expense(1,513)(6,560)(3,250)(938)(47)(12,308)
Foreign exchange adjustment— — — (126)— (126)
Experience adjustment— — — — — — 
Balance at March 31, 2023
$76,388 $425,145 $134,728 $59,890 $1,807 $697,958 
37
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table presents a reconciliation of deferred policy acquisition costs to the U.S. District Court for the Western DistrictConsolidated Balance Sheetsas of Oklahoma (Case No. 15-CV-0070-M) on July 10, 2015 and filed a MotionMarch 31, 2023:
March 31,
20232022
Life
American Income$2,332,600 $2,042,907 
Direct to Consumer1,699,588 1,608,739 
Liberty National622,532 575,838 
Other297,542 300,936 
Total DAC - Life
4,952,262 4,528,420 
Health
United American76,388 80,204 
Family Heritage425,145 394,925 
Liberty National134,728 128,338 
American Income59,890 51,820 
Direct to Consumer1,807 1,988 
Total DAC - Health
697,958 657,275 
Annuity
4,218 5,988 
Total
$5,654,438 $5,191,683 
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        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Notes to Dismiss on July 17, 2015. The Court denied plaintiff’s Motion to Remand back to state court on October 26, 2015, but allowed the plaintiff to amend the complaint to assert a putative class actionCondensed Consolidated Financial Statements
(Dollar amounts in federal court. Plaintiff filed a Motion for Class Certification on September 23, 2016. Globe filed a Response in Opposition on November 4, 2016. The Court denied plaintiff’s Motion for Class Certification on August 18, 2017.

With respect to current litigation, at this time management believes that the possibility of a material judgment adverse to Torchmark is remote, and no estimate of range can be made for loss contingencies that are at least reasonably possible but not accrued.

Guaranty Fund Assessment:

In 2017, the Commonwealth Court of Pennsylvania issued orders placing Penn Treaty Network America Insurance Company (Penn Treaty) and affiliate American Network Insurance Company (ANIC) in liquidation due to financial difficulties. In such instances, the various state guaranty fund associations employ funding mechanisms, through assessments to their member companies, to cover the obligations of the insolvent entities. Consequently, the Company continues to receive guaranty fund assessments from the state associations related to these companies. The Company has projected itsthousands, except per share of the ultimate assessments from these insolvencies based on assumptions about future events and its market share of premiums by state. The total estimated assessment for Torchmark's subsidiaries is approximately $10 million of which $1.4 million is estimated to be unrecoverable. We are anticipating the remaining amount of the assessments to be recovered through premium tax credits.data)

Note 7—8—Liability for Unpaid Claims


Activity in the liability for unpaid health claims is summarized as follows:
March 31,
2023		December 31,
2022
Balance at beginning of period
$182,202 $171,109 
Incurred related to:
Current year173,865 676,190 
Prior year(1,923)(15,631)
Total incurred171,942 660,559 
Paid related to:
Current year72,870 517,856 
Prior year99,876 131,610 
Total paid172,746 649,466 
Balance at end of period
$181,398 $182,202 

 Nine Months Ended 
 September 30,
 2017 2016
Balance at beginning of period$143,128
 $137,120
Incurred related to:
 
Current year393,747
 388,998
Prior years(10,745) (5,710)
Total incurred383,002
 383,288
Paid related to:
 
Current year279,563
 275,388
Prior years103,010
 102,435
Total paid382,573
 377,823
Balance at end of period$143,557
 $142,585
Below is the reconciliation of the liability for of "Policy claims and other benefits payable" in the Condensed Consolidated Balance Sheets.

March 31,
2023		December 31,
2022
Policy claims and other benefits payable:
Life insurance$307,898 $325,017 
Health insurance181,398 182,202 
Total$489,296 $507,219 

17
39
        GL Q1 2023 FORM 10-Q
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 7—Liability for Unpaid Claims (continued)9—Postretirement Benefits



 September 30,
2017		 December 31, 2016
Policy claims and other benefits payable:
 
Short-duration contracts$23,193
 $26,721
Insurance lines other than short duration—health120,364
 116,407
Insurance lines other than short duration—life175,275
 156,437
Total policy claims and other benefits payable$318,832
 $299,565


Short-Duration Contracts

Although Torchmark primarily sells long-duration contracts for both lifeGlobe Life has qualified noncontributory defined benefit pension plans (Pension Plans) and health, the Companycontributory savings plans that cover substantially all employees. There is also hasa nonqualified noncontributory supplemental executive retirement plan (SERP) that covers a limited amountnumber of group health productsofficers. The tables included herein will focus on the Pension Plans and SERP.

Pension Assets: The following table presents the assets of the Company's Pension Plans at March 31, 2023 and December 31, 2022.

Pension Assets by Component at March 31, 2023

 Fair Value Determined by:  
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial$— $22,482 $— $22,482 4 
Utilities— 20,838 — 20,838 4 
Energy— 7,564 — 7,564 2 
Other corporates— 26,433 — 26,433 5 
Total corporate bonds— 77,317 — 77,317 15 
Exchange traded fund(1)
276,478 — — 276,478 53 
U.S. Government and Agency— 76,643 — 76,643 15 
Other bonds— 202 — 202 — 
Guaranteed annuity contract(2)
— 43,297 — 43,297 8 
Short-term investments23,016 — — 23,016 4 
Other12,379 — — 12,379 2 
$311,873 $197,459 $— 509,332 97 
Other long-term investments(3)
13,767 3 
Total pension assets
$523,099 100 
(1)A fund including marketable securities that qualifymirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as short-duration contracts in accordance witha practical expedient for fair value. The Globe Life Inc. Pension Plan owns less than 1% of the applicable guidance.investment fund. As of March 31, 2023, the expected term of the investment fund is approximately 2 years and the commitment of the investment is fully funded. The investment is non-redeemable.

The below table illustrates the total incurred but not reported liabilities plus expected development on reported claims for short-duration products over the last five years. Claim frequency is determined by duration and incurred date.
40
 As of September 30, 2017
Accident YearTotal of incurred-but-not-reported liabilities plus expected development on reported claims
2013$—
20141
201546
20161,022
201722,124
Total$23,193
        GL Q1 2023 FORM 10-Q


18
Table of Contents
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)


Note 8—Postretirement Benefit Plans
The following tables present a summary of post-retirement benefit costs by component.
Components of Post-Retirement Benefit Costs
 Three Months Ended September 30,
 Pension Benefits Other Benefits
 2017 2016 2017 2016
Service cost$4,486
 $3,894
 $—
 $—
Interest cost5,552
 5,430
 249
 212
Expected return on assets(5,900) (5,782) —
 —
Amortization:       
Prior service cost118
 120
 —
 —
Actuarial (gain) loss2,952
 2,423
 38
 8
Direct recognition of expense—
 —
 111
 45
Net periodic benefit cost$7,208
 $6,085
 $398
 $265
        
 Nine Months Ended September 30,
 Pension Benefits Other Benefits
 2017 2016 2017 2016
Service cost$13,457
 $11,682
 $—
 $—
Interest cost16,653
 16,294
 749
 636
Expected return on assets(17,697) (17,346) —
 —
Amortization:       
Prior service cost356
 360
 —
 —
Actuarial (gain)/loss8,855
 7,270
 115
 24
Direct recognition of expense—
 —
 323
 99
Net periodic benefit cost$21,624
 $18,260
 $1,187
 $759
The following table presents assets at fair value for the defined-benefit pension plans at September 30, 2017 and December 31, 2016.
Pension Assets by Component at December 31, 2022
 Fair Value Determined by:  
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial$— $35,649 $— $35,649 7 
Utilities— 23,436 — 23,436 5 
Energy— 12,776 — 12,776 3 
Other corporates— 56,786 — 56,786 11 
Total corporate bonds— 128,647 — 128,647 26 
Exchange traded fund(1)
258,297 — — 258,297 52 
U.S. Government and Agency— 44,213 — 44,213 9 
Other bonds— 200 — 200 — 
Guaranteed annuity contract(2)
— 43,116 — 43,116 8 
Short-term investments4,467 — — 4,467 1 
Other6,547 — — 6,547 1 
$269,311 $216,176 $— 485,487 97 
Other long-term investments(3)
14,288 3 
Total pension assets
$499,775 100 
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns approximately 1% of the investment fund. As of December 31, 2022, the expected term of the investment fund was approximately 3 years and the commitment of the investment is fully funded. The investment is non-redeemable.


SERP: The following table includes information regarding the SERP.
Three Months Ended
March 31,
20232022
Premiums paid for insurance coverage$443 $443 
March 31,
2023		December 31,
2022
Total investments:
Company owned life insurance$54,788 $54,681 
Exchange traded funds74,632 71,258 
$129,420 $125,939 


41
 September 30, 2017 December 31, 2016
 Amount % Amount %
Corporate bonds$172,587
 47 $160,036
 49
Exchange traded fund(1)
153,824
 42 134,771
 41
Other bonds259
 — 258
 —
Guaranteed annuity contract(2)
21,163
 6 18,997
 6
Short-term investments12,676
 4 7,391
 2
Other5,118
 1 7,418
 2
Total$365,627
 100 $328,871
 100
        GL Q1 2023 FORM 10-Q
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Torchmark's subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Pension Plan.


19
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 8—Postretirement Benefits (continued)

Pension Plans and SERP Liabilities: The following table presents liabilities for the defined-benefitdefined benefit pension plans and SERP at September 30, 2017March 31, 2023 and December 31, 2016.2022.
March 31,
2023		December 31,
2022
Pension Plans$517,770 $492,103 
SERP70,499 70,464 
Pension benefit obligation
$588,269 $562,567 

Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the Pension Liability
 September 30,
2017		 December 31, 2016
Funded defined benefit pension$475,927
 $449,613
SERP(1) (Active)
77,223
 74,687
SERP(1) (Closed)
2,827
 3,222
Pension Benefit Obligation$555,977
 $527,522
(1)Supplemental executive retirement plan (SERP).
DuringPlans and SERP by expense components for the ninethree months ended September 30, 2017, the Company made $19 million in cash contributions to the qualified pension plans. Torchmark will not make any additional cash contributions in 2017.March 31, 2023 and 2022.
With respect to the Company’s active nonqualified noncontributory SERP, life insurance policies on the lives
Components of plan participants have been established with an unaffiliated carrier to provide for a portion of the Company’s obligations under the plan. These policies along with investments deposited with an unaffiliated trustee were previously placed in a Rabbi Trust to provide for the payment of the plan obligations. At September 30, 2017, the combined value of the insurance policies and investments in the Rabbi Trust to support plan liabilities were $94 million, compared with $86 million at December 31, 2016. Since this plan is nonqualified and therefore is treated as unfunded, the values of the insurance policies and investments are recorded as Other assets in the Condensed Consolidated Balance Sheets and are not included in the chart of plan assets above.Net Periodic Benefit Cost
Three Months Ended
March 31,
 20232022
Service cost$5,392 $8,655 
Interest cost7,834 6,123 
Expected return on assets(9,656)(8,885)
Amortization:
Prior service cost269 158 
Actuarial (gain) loss(52)3,209 
Net periodic benefit cost
$3,787 $9,260 


Note 9—10—Earnings Per Share

Earnings per Share: A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:
Three Months Ended
March 31,
20232022
Basic weighted average shares outstanding96,388,211 99,273,616 
Weighted average dilutive options outstanding1,522,889 976,758 
Diluted weighted average shares outstanding97,911,100 100,250,374 
Antidilutive shares209,870 563,991 

Antidilutive shares are excluded from the calculation of diluted earnings per share. 
42
        GL Q1 2023 FORM 10-Q
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Basic weighted average shares outstanding115,921,134
 119,480,642
 116,772,652
 120,476,813
Weighted average dilutive options outstanding2,521,815
 2,430,121
 2,540,955
 2,209,739
Diluted weighted average shares outstanding118,442,949
 121,910,763
 119,313,607
 122,686,552
Antidilutive shares—
 —
 1,174,469
 —

Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 10—11—Debt

The following table presents information about the terms and outstanding balances of Globe Life's debt.
Selected Information about Debt Issues
As of
March 31,
2023		December 31,
2022
InstrumentIssue DateMaturity DateCoupon RatePar
Value		Unamortized Discount & Issuance CostsBook
Value		Fair
Value		Book
Value
Senior notes5/27/19935/15/20237.875%$165,612 $(38)$165,574 $164,746 $165,500 
Senior notes9/27/20189/15/20284.550%550,000 (4,229)545,771 546,348 545,601 
Senior notes8/21/20208/15/20302.150%400,000 (3,668)396,332 323,984 396,219 
Senior notes(1)
5/19/20226/15/20324.800%250,000 (4,412)245,588 241,275 245,493 
Junior subordinated debentures11/17/201711/17/20575.275%125,000 (1,585)123,415 124,265 123,410 
Junior subordinated debentures6/14/20216/15/20614.250%325,000 (7,752)317,248 248,300 317,229 
1,815,612 (21,684)1,793,928 1,648,918 1,793,452 
Less current maturity of long-term debt165,612 (38)165,574 164,746 165,500 
Total long-term debt
1,650,000 (21,646)1,628,354 1,484,172 1,627,952 
Current maturity of long-term debt165,612 (38)165,574 164,746 165,500 
FHLB borrowings45,000 — 45,000 45,000 — 
Commercial paper305,000 (1,327)303,673 303,673 283,603 
Total short-term debt
515,612 (1,365)514,247 513,419 449,103 
Total debt
$2,165,612 $(23,011)$2,142,601 $1,997,591 $2,077,055 
(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.

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

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

Globe Life owns $16.0 million in FHLB common stock as of March 31, 2023 and $14.3 million as of December 31, 2022. The FHLB stock is restricted for the duration of the membership and recorded at cost (par) as required by applicable guidance. The FHLB stock is included in "Other long-term investments" in theConsolidated Balance Sheets.

Borrowings with the FHLB are subject to the availability of pledged assets at Globe Life. As of March 31, 2023, Globe Life's maximum borrowing capacity under the FHLB facility was approximately $633 million, based on
43
        GL Q1 2023 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
pledged assets with a fair value of $850 million. As of March 31, 2023, $43 million in funding agreements were outstanding with the FHLB, compared to $23 million as of December 31, 2022. This amount is included in "Other policyholders' funds" on the Consolidated Balance Sheets.In addition, the Company had $45 million in short-term borrowings from the FHLB as of March 31, 2023, compared to $0 as of December 31, 2022, and this amount is recorded in "Short-term debt" on the Consolidated Balance Sheets.


Note 12—Business Segments
Torchmark's
Globe Life is organized into four segments: life insurance, supplemental health insurance, annuities, and investments. In addition, other expenses not included in these segments are reported in "Corporate & Other."

Globe Life's reportable insurance segments are based on the insurance product lines it markets and administers: life insurance, supplemental health insurance, and annuities. These major product lines are set out as reportable segments because of the common characteristics of products within these categories, comparability of margins, and the similarity in regulatory environment and management techniques. Torchmark'sThere is also an investment segment that manages the investment portfolio and cash flow for the insurance segments and the corporate function, which has been retrospectively adjusted to exclude the interest on deferred acquisition costs due to the adoption of ASU 2018-12 and the interest on debt. The Company's chief operating decision makers evaluate the overall performance of the operations of the Company in accordance with these segments.
Management’s measure of profitability for each insurance segment is insurance underwriting margin, which is underwriting income before other income and insurance administrative expenses. It represents the profit margin on
Life insurance products before administrative expenses,marketed by Globe Life include traditional whole life and is calculatedterm life insurance. An immaterial amount of annuities sold as companion products are included in the life segment. Health insurance products are generally guaranteed renewable and include Medicare Supplement, critical illness, accident, and limited-benefit supplemental hospital and surgical coverage. Annuities include fixed-benefit contracts.

The following tables present segment premium revenue by deducting net policy obligations (claims incurred and change in reserves), commissions and other acquisition expenses from premium revenue. Torchmark further views the profitabilityeach of each insurance product segmentGlobe Life's distribution channels.

Premium Income by the marketing groups that distribute the products of that segment: direct response, independent agencies, or captive agencies.Distribution Channel

Three Months Ended March 31, 2023
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$387,512 50 $29,594 9 $— — $417,106 38 
Direct to Consumer247,667 32 17,248 5 — — 264,915 24 
Liberty National85,203 11 46,972 15 — — 132,175 12 
United American1,882 — 132,607 41 — — 134,489 12 
Family Heritage1,480 — 96,072 30 — — 97,552 9 
Other48,853 7 — — — — 48,853 5 
$772,597 100 $322,493 100 $— — $1,095,090 100 
20
44
        GL Q1 2023 FORM 10-Q
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 10—Business Segments (continued)


 Three Months Ended March 31, 2022
 LifeHealthAnnuityTotal
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American Income$370,106 49 $28,766 9 $— — $398,872 37 
Direct to Consumer245,732 33 17,928 6 — — 263,660 25 
Liberty National80,560 11 47,760 15 — — 128,320 12 
United American2,074 — 131,690 42 — — 133,764 13 
Family Heritage1,359 — 89,540 28 — — 90,899 8 
Other49,297 7 — — — — 49,297 5 
$749,128 100 $315,684 100 $— — $1,064,812 100 
Torchmark’s management prefers
Due to evaluate the performancenature of itsthe 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 investment activities separately, ratheradministrative expenses, in accordance with the manner in which the segments are managed. It essentially represents gross profit margin on insurance products before insurance administrative expenses and consists primarily of premium less net policy benefits, acquisition expenses, and commissions. Required interest on policy liabilities is reflected as a component of the Investment segment (rather than allocatingas a component of underwriting margin in the insurance and annuity segments) in order to match this cost with the investment income toearned on the underwriting results. As such,assets supporting the investment function is presented as a stand-alone segment. policy liabilities.
The investment segment includes the management of the investment portfolio, debt, and cash flow. Management’s measure of profitability for thisthe Investment segment is excess investment income, which isrepresenting the income earned on the investment portfolio lessin excess of policy requirements. During the required interest on net policy liabilitiesimplementation of ASU 2018-12, the Company reviewed its segment disclosures and financing costs. Financing costs includemodified the measure of profitability of our Investment Segment due to the adoption impact of the standard and to align more appropriately with how we view and measure this segment. As of January 1, 2023, this measure was retrospectively adjusted to exclude the interest on Torchmark’sdeferred acquisition costs due to the adoption of ASU 2018-12 and the interest expense on debt. Other incomethan 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 classified in a separate Other segment.
The majority of the Company’s requiredand interest on net policy liabilities (benefit reserves less the deferred acquisition cost asset) is not credited to policyholder accounts. Instead, it is an actuarial assumption for discounting cash flowsdebt, are also included in the computation of“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, reservesacquisition, administrative and the amortization of the deferred acquisition cost asset. Investment income required to fund the required interest on net policy liabilities is removed from the investment segment and applied to the insurance segments to eliminate the effect of the required interest from the insurance segments. As a result, the investment segment measures nettax expenses. This yield or investment income against the required interest on net policy liabilities and financing costs, while the insurance segments simply measure premiums against net policy benefits and expenses. Management believes this presentation facilitates a more meaningful analysis of the Company’s underwriting and investment performance as the underwriting results are based on premiums, claims, and expenses and are not affected by unanticipated fluctuations in investment yields.
As noted, Torchmark’s “core operations” are insurance and investment management. The insurance segments issue policies for which premiums are collected for the eventual payment of policy benefits. In addition to policy benefits, operating expenses are incurred including acquisition costs, administrative expenses, and taxes. Because life and health contracts can be long term, premium receipts in excess of current expenses are invested. Investment activities, conducted by the investment segment, focus on seeking quality investments with a yield and term appropriate to support the insurance product obligations. These investments generally consist of fixed maturities, and, over the long term, the expected yields areis taken into account when setting insuranceestablishing premium rates and product profitability expectations. As a result, fixed maturities are generally heldexpectations for long periods to support the liabilities, and Torchmark generally expects to hold investments until maturity. However, dispositions of investments occur fromits insurance products. From time to time, investments are sold or called, or experience a credit loss event, each of which is reflected by the Company as realized gain (loss)—investments. These gains or losses generally for reasons suchoccur as credit concerns,a result of disposition due to issuer calls, by issuers,compliance with Company investment policies, or other factors.

Since Torchmark does not actively trade investments,reasons often beyond management’s control. Unlike investment income, realized gains and losses from the disposition and write down of investments are generally incidental to insurance operations, and only overall yields are not considered a material factor inwhen setting premium rates or insurance pricing or product profitability.profitability expectations. While from time to time these realized gains and losses could be significantare not relevant to net income in the period in whichsegment profitability or core operating results, they occur, they generallycan have a limited effectmaterial positive or negative result on the yield of the total investment portfolio. Further, because the proceeds of the disposals are reinvested in the portfolio, the disposals have little effect on the size of the portfolio and the income from the reinvestments is included in net investment income. Therefore,For these reasons, management removes realized investment gains and losses from results of core operationswhen it views its segment operations.

Management removes items that are related to prior periods when evaluating the performanceoperating results of current periods. Management also removes non-operating items unrelated to the Company. For this reason,Company's core insurance activities when evaluating those results. Therefore, these gains and lossesitems are excluded from Torchmark’s operating segments.
Torchmark accounts forin its stock options and restricted stock under currentpresentation of segment results because accounting guidance requiring stock options and stock grants torequires that operating segment results be expensed based on fair value at the time of grant. Management considers stock compensation expense to be an expense of the Parent Company. Therefore, stock compensation expense is treatedpresented as a corporate expense in Torchmark’s segment analysis.
As discussed in Note 6—Commitments and Contingencies, the Company received an assessment from various state guaranty fund associations for the liquidation of Penn Treaty andmanagement views its affiliate. The total estimated assessment for Torchmark's subsidiaries is approximately$10 million of which$1.4 million is estimated to be unrecoverable. We are anticipating the remaining amount of the assessments to be recovered through premium tax credits. The assessment expenses were considered a non-operational event and therefore were excluded from the core underwriting operations of the Company.

business. With
21
45
        GL Q1 2023 FORM 10-Q
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 10—Business Segments (continued)
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 Torchmark’sGlobe 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 and each significant line item in its Condensed Consolidated Statements of Operations.income.
Reconciliation of Segment Operating Information to the Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2023
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$772,597 $322,493 $— $— $— $— $1,095,090 
Net investment income— — — 257,105 — — 257,105 
Other income— — — — 50 — 50 
Total revenue772,597 322,493 — 257,105 50 — 1,352,245 
Expenses:
Policy benefits507,977 190,962 7,541 1,447 — — 707,927 
Required interest on reserves(189,821)(26,323)(10,259)226,403 — — — 
Amortization of acquisition costs79,589 12,308 425 — — — 92,322 
Commissions, premium taxes, and non-deferred acquisition costs83,578 54,214 5 — — — 137,797 
Insurance administrative expense(1)
— — — — 73,907 73,907 
Parent expense— — — — 2,585 — 2,585 
Stock-based compensation expense— — — — 7,679 — 7,679 
Interest expense— — — — 24,867 — 24,867 
Total expenses481,323 231,161 (2,288)227,850 109,038 — 1,047,084 
Subtotal291,274 91,332 2,288 29,255 (108,988)— 305,161 
Non-operating items— — — — — — 
Measure of segment profitability (pretax)
$291,274 $91,332 $2,288 $29,255 $(108,988)$— 305,161 
Realized gain (loss)—investments(30,927)
$274,234 
 Three Months Ended September 30, 2017
 Life Health Annuity Investment Other &
Corporate		 Adjustments  Consolidated
Revenue:              
Premium$576,223
 $242,991
 $3
        $819,217
Net investment income      $213,872
      213,872
Other income        $361
 $(30) (2)331
    Total revenue576,223
 242,991
 3
 213,872
 361
 (30)  1,033,420
Expenses:              
Policy benefits386,445
 155,774
 9,000
     

 
551,219
Required interest on reserves(152,862) (19,617) (12,433) 184,912
      —
Required interest on DAC46,893
 5,881
 172
 (52,946)      —
Amortization of acquisition costs98,268
 23,458
 608
        122,334
Commissions, premium taxes, and non-deferred acquisition costs44,748
 21,746
 7
     1,362
 (2,3)67,863
Insurance administrative expense(1)
        52,426
 

 
52,426
Parent expense        2,330
    2,330
Stock compensation expense        8,263
    8,263
Interest expense      20,970
      20,970
Total expenses423,492
 187,242
 (2,646) 152,936
 63,019
 1,362
  825,405
Subtotal152,731
 55,749
 2,649
 60,936
 (62,658) (1,392)  208,015
Non-operating items          1,392
 (3)1,392
Measure of segment profitability (pretax)$152,731
 $55,749
 $2,649
 $60,936
 $(62,658) $—
  209,407
Deduct applicable income taxes  (63,342)
Segment profits after tax  146,065
Add back income taxes applicable to segment profitability  63,342
Add (deduct) realized investment gains (losses) 
   
12,595
Add (deduct) guaranty fund assessments(3)
  (1,392)
Pretax income from continuing operations per Condensed Consolidated Statements of Operations 
   
$220,610

(1)Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.
(3) Guaranty fund assessments.





22
46
        GL Q1 2023 FORM 10-Q
TORCHMARK CORPORATIONGlobe Life Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)

Note 10—Business Segments (continued)
Three Months Ended March 31, 2022
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$749,128 $315,684 $— $— $— $— $1,064,812 
Net investment income— — — 244,894 — — 244,894 
Other income— — — — 164 — 164 
Total revenue749,128 315,684 — 244,894 164 — 1,309,870 
Expenses:
Policy obligations495,429 189,018 8,642 1,060 — — 694,149 
Required interest on reserves(181,372)(25,270)(11,367)218,009 — — — 
Amortization of acquisition costs71,929 12,114 453 — — — 84,496 
Commissions, premium taxes, and non-deferred acquisition costs73,548 51,952 9 — — — 125,509 
Insurance administrative expense(1)
— — — — 72,565 112 (2)72,677 
Parent expense— — — — 2,640 2,640 
Stock-based compensation expense— — — — 9,035 — 9,035 
Interest expense— — — — 19,944 — 19,944 
Total expenses459,534 227,814 (2,263)219,069 104,184 112 1,008,450 
Subtotal289,594 87,870 2,263 25,825 (104,020)(112)301,420 
Non-operating items— — — — — 112 (2)112 
Measure of segment profitability (pretax)
$289,594 $87,870 $2,263 $25,825 $(104,020)$— 301,532 
Realized gain (loss)—investments(7,244)
Non-operating expenses(112)
$294,176 

 Three Months Ended September 30, 2016
 Life Health Annuity Investment Other &
Corporate		 Adjustments  Consolidated
Revenue:              
Premium$546,415
 $236,987
 $9
 ��      $783,411
Net investment income      $202,720
      202,720
Other income        $199
 $(39) (2)160
Total revenue546,415
 236,987
 9

202,720
 199
 (39)  986,291
Expenses:              
Policy benefits369,546
 153,351
 9,255
        532,152
Required interest on reserves(145,295) (18,476) (12,761) 176,532
      —
Required interest on DAC44,950
 5,789
 192
 (50,931)      —
Amortization of acquisition costs93,496
 22,643
 682
        116,821
Commissions, premium taxes, and non-deferred acquisition costs40,577
 20,604
 11
     (39) (2)61,153
Insurance administrative expense(1)
        49,248
 257
  49,505
Parent expense        1,955
    1,955
Stock compensation expense        6,345
    6,345
Interest expense      20,381
      20,381
Total expenses403,274
 183,911
 (2,621) 145,982
 57,548
 218
  788,312
Subtotal143,141
 53,076
 2,630
 56,738
 (57,349) (257)  197,979
Non-operating items          257
  257
Measure of segment profitability (pretax)$143,141
 $53,076
 $2,630
 $56,738
 $(57,349) $—
  198,236
Deduct applicable income taxes  (58,422)
Segment profits after tax  139,814
Add back income taxes applicable to segment profitability  58,422
Add (deduct) realized investment gains (losses) 
   
3,482
Add (deduct) non-operating fees  (257)
Pretax income from continuing operations per Condensed Consolidated Statements of Operations 
   
$201,461

(1)Administrative expense is not allocated to insurance segments.
(2) EliminationNon-operating expenses.


Note 13—Subsequent Events

Subsequent to the balance sheet date, the Company closed on a $170 million delayed draw term loan in April 2023 with an 18-month term and a variable interest rate. The proceeds from the term loan will be used to retire the 7.875% Senior Notes maturing on May 15, 2023.

During the quarter, we reviewed available information to evaluate whether an expected credit loss allowance should be established related to our holdings of intersegment commission.First Republic Bank. Based on our review, which included analyst reports, public company information, and investment and business news relative to current events, we determined no allowance was needed. Subsequent to March 31, 2023, it was announced First Republic Bank had entered receivership effective April 30, 2023. The Company had $38.6 million outstanding, at amortized cost, with First Republic Bank as of March 31, 2023 with no associated allowance for credit losses. As of May 9, 2023, the fair value of the investment in First Republic Bank was $0.4 million.






23
47
        GL Q1 2023 FORM 10-Q
TORCHMARK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIALCAUTIONARY STATEMENTS
(UNAUDITED)
(DollarWe 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 pandemic and associated direct and indirect effects on our business operations, financial results, and financial condition. If these estimates or assumptions prove to be incorrect, the actual results of Globe Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance industry generally, or applicable to the Company specifically. Such events or developments could include, but are not necessarily limited to:
1.Economic and other conditions, including the impact of inflation, geopolitical events, and the COVID-19 pandemic on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions;
2.Regulatory developments, including changes in accounting standards or governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);
3.Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;
4.Interest rate changes that affect product sales, financing costs, and/or investment portfolio yield;
5.General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from geopolitical events and 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 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 thousands, except per share data)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;
Note 10—Business Segments (continued)13.The severity, magnitude, and impact of natural or man-made catastrophic events, including but not limited to pandemics, tornadoes, hurricanes, earthquakes, war and terrorism, on our operations and personnel, commercial activity and demand for our products; and
14.Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period.

Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission.
48
        GL Q1 2023 FORM 10-Q

 Nine Months Ended September 30, 2017
 Life Health Annuity Investment Other &
Corporate		 Adjustments 
  
Consolidated
Revenue:              
Premium$1,725,896
 $730,557
 $9
 
 
 

 
$2,456,462
Net investment income
 
 
 $634,930
 
 

 
634,930
Other income
 
 
 
 $1,239
 $(99) (2)1,140
    Total revenue1,725,896
 730,557
 9
 634,930
 1,239
 (99) 
3,092,532
Expenses:              
Policy benefits1,166,289
 470,104
 26,923
 
 
 2,094
 (3)1,665,410
Required interest on reserves(452,339) (57,859) (37,245) 547,443
 
 
 
—
Required interest on DAC139,042
 17,530
 524
 (157,096) 
 
 
—
Amortization of acquisition costs296,646
 71,801
 1,916
 
 
 
 
370,363
Commissions, premium taxes, and non-deferred acquisition costs132,094
 64,599
 25
 

 

 1,293
 (2,4)198,011
Insurance administrative expense(1)


 

 

 

 155,751
 

 
155,751
Parent expense

 

 

 

 7,228
 

 
7,228
Stock compensation expense

 

 

 

 24,809
 

 
24,809
Interest expense

 

 

 62,825
 

 

 
62,825
Total expenses1,281,732
 566,175
 (7,857) 453,172
 187,788
 3,387
  2,484,397
Subtotal444,164
 164,382
 7,866
 181,758
 (186,549) (3,486)  608,135
Non-operating items          3,486
 (3,4)3,486
Measure of segment profitability (pretax)$444,164
 $164,382
 $7,866
 $181,758
 $(186,549) $—
  611,621
Deduct applicable income taxes  (184,703)
Segment profits after tax  426,918
Add back income taxes applicable to segment profitability  184,703
Add (deduct) realized investment gains (losses) 
   
6,142
Add (deduct) administrative settlements(3)
  (2,094)
Add (deduct) guaranty fund assessments (4)
  (1,392)
Pretax income from continuing operations per Condensed Consolidated Statements of Operations 
   
$614,277

(1) Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.
(3) Administrative settlements.
(4) Guaranty fund assessments.




24
TORCHMARK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollar amounts in thousands, except per share data)

Note 10—Business Segments (continued)

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

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

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

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


Results of Operations

icons2.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.
icons.jpg
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

icons3.jpg
Investment Segment.The investment segment involves the management of our capital resources, including investments and the management of liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below:
 Net investment income
(Required interest on policy liabilities)
Excess investment income


49
        GL Q1 2023 FORM 10-Q
 Nine Months Ended September 30, 2016
 Life Health Annuity Investment Other &
Corporate		 Adjustments  Consolidated
Revenue:              
Premium$1,639,156
 $709,936
 $34
       
$2,349,126
Net investment income

 

 

 $601,415
     
601,415
Other income

 

 

 

 $1,086
 $(123) (2)963
Total revenue1,639,156
 709,936
 34
 601,415
 1,086
 (123)  2,951,504
Expenses:              
Policy benefits1,101,748
 459,387
 27,475
 

 

 

 
1,588,610
Required interest on reserves(430,931) (54,803) (38,359) 524,093
 

 

 
—
Required interest on DAC133,628
 17,297
 621
 (151,546) 

 

 
—
Amortization of acquisition costs281,698
 67,110
 4,064
 

 

 

 
352,872
Commissions, premium taxes, and non-deferred acquisition costs121,968
 63,733
 31
 

 

 (123) (2)185,609
Insurance administrative expense (1)


 

 

 

 146,129
 257
 
146,386
Parent expense

 

 

 

 6,360
 

 
6,360
Stock compensation expense

 

 

 

 20,334
 

 
20,334
Interest expense

 

 

 62,860
 

 

 
62,860
Total expenses1,208,111
 552,724
 (6,168)
435,407
 172,823
 134
  2,363,031
Subtotal431,045
 157,212
 6,202
 166,008
 (171,737) (257)  588,473
Non-operating items          257
  257
Measure of segment profitability (pretax)$431,045
 $157,212
 $6,202
 $166,008
 $(171,737) $—
  588,730
Deduct applicable income taxes  (178,842)
Segment profits after tax  409,888
Add back income taxes applicable to segment profitability  178,842
Add (deduct) realized investment gains (losses)   7,780
Add (deduct) non-operating fees  (257)
Pretax income from continuing operations per Condensed Consolidated Statements of Operations   $596,253

(1) Administrative expense is not allocated to insurance segments.
(2) Elimination of intersegment commission.





25
TORCHMARK CORPORATIONGLOBE LIFE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSManagement's Discussion & Analysis
(UNAUDITED)Current Highlights, comparing year-to-date 2023 with 2022.
(Dollar amounts•Net income as a return on equity (ROE) for the three months ended March 31, 2023 was 22.9% and net operating income as an ROE, excluding accumulated other comprehensive income(1) was 14.6%.
•Total premium increased 3% over the same period in thousands, exceptthe prior year. Life premium increased 3% for the period from $749 million in 2022 to $773 million in 2023.
•Net investment income increased 5% over the same period in the prior year.
•Total net sales increased 5% over the same period in the prior year from $182 million in 2022 to $190 million in 2023. The average producing agent count across all of the exclusive agencies increased 7% over the prior year.
•Book value per share data)increased 56% over the same period in the prior year from $25.52 to $39.74. Book value per share, excluding accumulated other comprehensive income(1), increased 10% over the prior year from $63.91 in 2022 to $70.34 in 2023.

Note 10—Business Segments (continued)

•For the three months ended March 31, 2023, the Company repurchased 1.2 million shares of Globe Life Inc. common stock at a total cost of $135 million for an average share price of $115.04.
The following table summarizesgraphs represent net income and net operating income for the measuresthree month periods ended March 31, 2023 and 2022.
11401142
(1)As shown in the charts above, net operating income is the consolidated total of segment profitabilityprofits after tax and as such is considered a non-GAAP measure. It has been used consistently by Globe Life's management for comparison.many years to evaluate the operating performance of the Company. It differs from net income primarily because it excludes certain non-operating items such as realized gains and losses and certain significant and unusual items included in net income. Net income is the most directly comparable GAAP measure.
Net operating income as an ROE, excluding accumulated other comprehensive income (AOCI), is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI, net of tax, is $(3.0) billion and $(3.8) billion for the three months ended March 31, 2023 and 2022, respectively.
Book value per share, excluding AOCI, is also reconcilesconsidered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI is $(30.60) and $(38.39) for the three months ended March 31, 2023 and 2022, respectively.
Refer to Analysis of Profitability by Segment for non-GAAP reconciliation to GAAP.

50
        GL Q1 2023 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis
Summary of Operations. Net income declined 6% to $224 million during the three months ended March 31, 2023, compared with $237 million in the same period in 2022. This decrease was attributed to $24 million of after-tax realized losses on investments in the current period, as compared to $6 million of after tax realized losses on investments in the year-ago period. See further discussion under the caption Investments. On a diluted per common share basis, net income per common share for the three months ended March 31, 2023 declined 4% from $2.37 to $2.28.

Net operating income increased 2% to $248 million for the three months ended March 31, 2023, compared with $243 million for the same period in 2022, primarily due to a 5% increase in net investment income, offset by a 4% increase in required interest on policy liabilities, and a 1% increase in total underwriting margin. On a diluted per common share basis, net operating income per common share for the three months ended March 31, 2023 increased from $2.43 to $2.53, a 4% increase. Net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized gains and losses to be a component of our core insurance operations or operating segments. Additionally, net income in 2022 was affected by certain significant and unusual non-operating items. We do not view these items as components of core operating results because they are not indicative of past performance or future prospects of the insurance operations. We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods.

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

51
        GL Q1 2023 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis
Globe Life's operations on a segment-by-segment basis are discussed in depth below. Net operating income has been used consistently by management for many years to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from GAAP net income primarily because it excludes certain non-operating items such as realized gains and losses and other significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP measure.

Analysis of Profitability by Segment
(Dollar amounts in thousands)
Three Months Ended March 31,
20232022Change%
Life insurance underwriting margin$291,274 $289,594 $1,680 1 
Health insurance underwriting margin91,332 87,870 3,462 4 
Annuity underwriting margin2,288 2,263 25 1 
Excess investment income29,255 25,825 3,430 13 
Other insurance:
Other income50 164 (114)(70)
Administrative expense(73,907)(72,565)(1,342)2 
Corporate and other(35,131)(31,619)(3,512)11 
Pre-tax total305,161 301,532 3,629 1 
Applicable taxes(57,119)(58,237)1,118 (2)
Net operating income
248,042 243,295 4,747 2 
Reconciling items, net of tax:
Realized gain (loss)—investments(24,432)(5,723)(18,709)
Non-operating expenses— (88)88 
Net income
$223,610 $237,484 $(13,874)(6)

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 $2 million compared with the prior year three-month period due to growth in premiums and lower net life claims as a percentage of premiums. The health segment contributed to the growth in income as well, contributing $91 million of underwriting margin in the first three months of 2023 compared with $88 million in the first three months of 2022.
52
        GL Q1 2023 FORM 10-Q
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Life insurance underwriting margin$152,731
 $143,141
 $444,164
 $431,045
Health insurance underwriting margin55,749
 53,076
 164,382
 157,212
Annuity underwriting margin2,649
 2,630
 7,866
 6,202
Excess investment income60,936
 56,738
 181,758
 166,008
Other insurance:       
Other income361
 199
 1,239
 1,086
Administrative expense(52,426) (49,248) (155,751) (146,129)
Corporate and adjustments(10,593) (8,300) (32,037) (26,694)
Segment profits before tax209,407
 198,236
 611,621
 588,730
Applicable taxes(63,342) (58,422) (184,703) (178,842)
Segment profits after tax146,065
 139,814
 426,918
 409,888
Discontinued operations (after tax)(12) 9,959
 (3,739) (447)
After-tax total, after discontinued operations146,053
 149,773
 423,179
 409,441

       
Realized gains (losses)—investments (after tax)8,186
 2,263
 6,235
 5,057
Administrative settlements (after tax)—
 —
 (1,361) —
Guaranty fund assessments (after tax)(905) —
 (905) —
Non-operating fees (after tax)—
 (167) —
 (167)
Net income$153,334
 $151,869
 $427,148
 $414,331


26
Table of Contents

GLOBE LIFE INC.


Management's Discussion & Analysis

In 2023, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was the American Income Life Division. The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the three months ended March 31, 2023.
Item 2. Management’s307308

Total premium income rose 3% for the three months ended March 31, 2023 to $1.1 billion. Total net sales increased 5% to $190 million, when compared with 2022. Total first-year collected premium (defined in the following section) was $146 million for 2023 and 2022.

Life insurance premium income increased 3% to $773 million over the prior-year total of $749 million. Life net sales rose 1% to $140 million for the first three months of 2023. First-year collected life premium declined 3% to $103 million. Life underwriting margins, as a percent of premium, declined to 38% in 2023 from 39%. Underwriting margin increased to $291 million in 2023, an increase of 1% over the same period in 2022, largely a result of an increase in premium growth.

Health insurance premium income increased 2% to $322 million over the prior-year total of $316 million. Health net sales rose 17% to $50 million for the first three months of 2023. First-year collected health premium rose 9% to $43 million. Health underwriting margins, as a percent of premium, were 28% in 2023 and 2022. Health underwriting margin increased to $91 million for the first three months of 2023, 4% over the same period in 2022.

Excess investment income, the measure of profitability of our investment segment, increased during the first three months of 2023 to $29.3 million from $25.8 million in the same period in 2022. Excess investment income per common share, reflecting the impact of our share repurchase program, increased 15% to $0.30 from $0.26 when compared with the same period in 2022.

Insurance administrative expenses increased 2% in 2023 when compared with the prior-year period. These expenses were 6.7% as a percent of premium during 2023 compared with 6.8% a year earlier.

For the three months ended March 31, 2023, the Company repurchased 1.2 million Globe Life Inc. shares at a total cost of $135 million for an average share price of $115.04.

53
        GL Q1 2023 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion and& Analysis
The discussions of Financial Condition and Results of Operations
Results of Operations
Summary of Operations. Torchmark’s operationsour segments are segmented into its insurance underwriting and investmentpresented in the manner we view our operations, as described in Note 10—12—Business Segmentsin the Notes to the Condensed Consolidated Financial Statements. The measures of profitability are useful in evaluating the performance of the segments and the marketing groups within each insurance segment because each of our distribution channels operates in a niche market. Insurance underwriting margin consists of premium less policy obligations, commissions and other acquisition expenses. These measures enable management to view period-to-period trends, and to make informed decisions regarding future courses of action.
The tables in Note 10 demonstrate how the measures of profitability are determined. Those tables also reconcile our revenues and expenses by segment to major income statement line items for the three month and nine month periods ended September 30, 2017 and 2016. Additionally, a table in that note, Analysis of Profitability by Segment, provides a summary of profitability measures that demonstrates year-to-year comparability and reconciles those measures to our net income. That summary represents our overall operations in the manner that management views the business, and is a basis of the following highlights discussion.
We use three statistical measures as indicators of future premium growth:growth and sales over the near term: “annualized premium in force", "net sales",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 monthtwelve-month period. Annualized premium in force is an indicator of potential growth in premium revenue.
•Net sales, a statistical performance measure, is definedcalculated as annualized premium issued,(1), net of cancellations in the first thirty days after issue, except for Globe Lifein the case of Direct Response,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. Although lapses and terminations will occur, we believe thatManagement considers net sales isto be a usefulbetter indicator of the rate of acceleration of premium growth. 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 policy 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.
A
See further discussion of operations by each segment follows later in this report. These discussions compare the first nine months of 2017 with the same period of 2016, unless otherwise noteddistribution channels below for Life and Health. The following discussions are presented in the manner we view our operations, as described in Note 10.














(1) Annualized premium issued is the gross premium that would be received during the policies’ first year in force, assuming that none of the policies lapsed or terminated.


27
54
        GL Q1 2023 FORM 10-Q

GLOBE LIFE INC.


Management's Discussion & Analysis

LIFE INSURANCE
Highlights, comparing the first nine months of 2017 with the first nine months of 2016.
Net income per diluted common share increased6% to $3.58 from $3.38. Included in net income were after-tax realized gains of $6.2 million in 2017compared with gains of $5.1 million for the same period in2016. Realized gains and losses are presented more fully under the caption Realized Gains and Losses in this report. Net operating income from continuing operations is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. Net operating income from continuing operations increased 4% or $17 million to $427 million for the nine months ended September 30, 2017 compared with $410 million for the same 2016 period.
Total premium income rose 5% in 2017 to $2.5 billion. Total net sales increased 2% to $420 million, when compared with the same period in 2016. First-year collected premium was $339 million for the 2017 period, compared with $340 million for the 2016 period.
Life insurance premium income grew 5% to $1.7 billion. Life net sales increased 1% when compared withis the same period in 2016. First-year collectedCompany's predominant segment. During 2023, life premium grew 1% during the first nine monthsrepresented 71% of 2017 to $239 million over the same period in 2016. Lifetotal premium and life underwriting margin as a percentage of premium was flat at 26%. Underwriting income increased 3% to $444 million when compared with the same period in 2016.
Health insurance premium income increased 3% to $731 million over the prior year total of $710 million. Health net sales rose 6% to $104 million for the nine month period. First-year collected health premium fell 4% to $100 million. Health margins increased to 23% from 22% a year earlier. Underwriting income increased 5% to $164 million for the first nine months of 2017.
Insurance administrative expenses were up 6.6% in 2017 when compared with the prior year period. These expenses were 6.3% as a percentage of premium during the first nine months of 2017 compared with 6.2% a year earlier. The increase in administrative expenses was primarily due to an increase in other employee costs and investments in information technology.
Excess investment income is defined as net investment income less the required interest on net policy liabilities and the interest cost associated with capital funding or “financing costs”. Excess investment income per diluted common share is an important measure to management. Refer to the Excess Investment Income section of this report for further details. Excess investment income per common share increased 13% in 2017 to $1.52 from $1.35 in the same period last year, while the dollar amount of excess investment income increased 9% to $182 million. Net investment income rose $34 million or 6% to $635 million in 2017, below the 7% growth in our average investment portfolio at amortized cost. The average effective yield earned on the fixed maturity portfolio, which represented 96% of our investments at amortized cost, decreased to 5.68% in the 2017 period from 5.80% in the prior period. Required interest rose 5% or $18 million to $390 million, in line with the growth in average net policy liabilities. Financing costs were flat at$63 million. Please refer to the discussion under Capital Resources for more information on debt and interest expense.
In the first nine months of 2017, we invested new money in fixed maturity securities at an effective annual yield of 4.74%, compared with 4.73% in the same period of 2016. These new investments had an average rating of BBB+ and an average life to maturity of twenty-four years. Approximately 96%76% of the fixed-maturity portfolio at amortized cost was investment grade at September 30, 2017. Cash and short-term investments were $154 million at that date, compared with $148 million at December 31, 2016.
The net unrealized gain position in our fixed maturity portfolio grew from $1.1 billion at December 31, 2016 to $1.7 billion at September 30, 2017 due primarily to changes in market interest rates.

28
Table of Contents




Share Repurchases. We have an on-going share repurchase program which began in 1986 that is reviewed quarterly and is reaffirmed by the Board of Directors on an annual basis. The program was reaffirmed on August 7, 2017. With no specified authorization amount, we determine the amount of repurchases based on the amount of our excess cash flow, general market conditions, and other alternative uses. These purchases are made at the Parent Company with excess cash flow. Excess cash flow is primarily made up of cash received from the insurance subsidiaries less dividends paid to shareholders and interest paid on our debt. See further discussion in the Capital Resources section below. Share purchases are also made with the proceeds from option exercises by current and former employees in order to reduce dilution. The following chart summarizes share purchases for the nine month periods ended September 30, 2017 and 2016.

Analysis of Share Purchases
(Amounts in thousands, except per share data) 

 Nine Months Ended September 30,
 2017 2016
 Shares Amount Average
Price		 Shares Amount Average
Price
Purchases with:
 
 
 
 
 
Excess cash flow at the Parent Company3,176
 $242,841
 $76.46
 4,170
 $240,108
 $57.58
Option exercise proceeds760
 58,607
 77.16
 1,180
 71,248
 60.38
Total3,936
 $301,448
 $76.59
 5,350
 $311,356
 $58.20
Throughout the remainder of this discussion, share purchases will only refer to those made from excess cash flow.
A detailed discussion of our operations by component segment follows.
Life insurance, comparing the first nine months of 2017 with the first nine months of 2016. Life insurance is our predominant segment, representing 70% of premium income and 72% of insurancetotal underwriting margin in the first nine months of 2017. In addition,margin. Additionally, investments supporting the reserves for life business generateproducts produce the majority of excess investment income attributable to the investment segment.
The following table presents the summary of results forof life insurance.Further discussion of the results by distribution channel is included below.

Life Insurance
Summary of Results
(Dollar amounts in thousands)
 
 Nine Months Ended September 30, Increase
 2017 2016 (Decrease)
 Amount % of
Premium		 Amount % of
Premium		 Amount %
Premium and policy charges$1,725,896
 100 $1,639,156
 100 $86,740
 5
Net policy obligations713,950
 41 670,817
 41 43,133
 6
Commissions and acquisition expense567,782
 33 537,294
 33 30,488
 6
Insurance underwriting income before other income and administrative expense$444,164
 26 $431,045
 26 $13,119
 3
Life Insurance

Summary of Results

(Dollar amounts in thousands)
Three Months Ended March 31,Change
20232022
Amount% of PremiumAmount% of PremiumAmount%
Premium and policy charges$772,597 100 $749,128 100 $23,469 3 
Policy obligations507,977 66 495,429 66 12,548 3 
Required interest on reserves(189,821)(25)(181,372)(24)(8,449)5 
Net policy obligations318,156 41 314,057 42 4,099 1 
Commissions, premium taxes, and non-deferred acquisition expenses83,578 11 73,548 10 10,030 14 
Amortization of acquisition costs79,589 10 71,929 9 7,660 11 
Total expense481,323 62 459,534 61 21,789 5 
Insurance underwriting margin
$291,274 38 $289,594 39 $1,680 1 

29
TableNet policy obligations amounted to 41% of Contentspremiums for the three months ended March 31, 2023, compared to 42% in the year-ago period.





The following table presents Torchmark’sGlobe Life's life insurance premium by distribution channel.

Life Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
Three Months Ended March 31,Change
20232022
Amount% of TotalAmount% of TotalAmount%
American Income$387,512 50 $370,106 49 $17,406 5 
Direct to Consumer247,667 32 245,732 33 1,935 1 
Liberty National85,203 11 80,560 11 4,643 6 
Other52,215 7 52,730 7 (515)(1)
Total
$772,597 100 $749,128 100 $23,469 3 

Annualized life premium in force was $3.11 billion at March 31, 2023, an increase of 4% over $2.99 billion a year earlier.

55
        GL Q1 2023 FORM 10-Q
 Nine Months Ended September 30, Increase
 2017 2016 (Decrease)
 Amount % of
Total		 Amount % of
Total		 Amount
%
American Income Exclusive Agency$741,392
 43 $677,702
 41 $63,690
 9
Globe Life Direct Response613,568
 35 591,084
 36 22,484
 4
Liberty National Exclusive Agency205,775
 12 203,040
 13 2,735
 1
Other Agencies165,161
 10 167,330
 10 (2,169) (1)
Total$1,725,896
 100 $1,639,156
 100 $86,740
 5
Table of Contents
NetGlobe Life Inc.
Management's Discussion & Analysis

An analysis of life net sales, an indicator of new business production, increased 1% to $316 million when compared with the same period in 2016. An analysis of life net sales by distribution channel is presented below.

Life Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
Three Months Ended March 31,Change
20232022
Amount% of TotalAmount% of TotalAmount%
American Income$83,329 59 $85,350 61 $(2,021)(2)
Direct to Consumer32,467 23 33,913 24 (1,446)(4)
Liberty National21,979 16 17,365 13 4,614 27 
Other2,594 2 2,375 2 219 9 
Total
$140,369 100 $139,003 100 $1,366 1 

Life Insurance
Net Sales
(Dollar amounts in thousands)
 Nine Months Ended September 30,
Increase
 2017 2016 (Decrease)
 Amount % of
Total		 Amount % of
Total		 Amount %
American Income Exclusive Agency$167,478
 53 $157,949
 50 $9,529
 6
Globe Life Direct Response106,652
 34 116,224
 37 (9,572) (8)
Liberty National Exclusive Agency34,609
 11 29,856
 10 4,753
 16
Other Agencies7,501
 2 9,063
 3 (1,562) (17)
Total$316,240
 100 $313,092
 100 $3,148
 1
First-year collected life premium, defined earlier in this report, was $239 million in the 2017 period, rising 1% over the same period in 2016. 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)
Three Months Ended March 31,Change
20232022
Amount% of TotalAmount% of TotalAmount%
American Income$63,758 62 $65,294 62 $(1,536)(2)
Direct to Consumer20,795 20 24,212 23 (3,417)(14)
Liberty National15,795 16 13,748 13 2,047 15 
Other2,263 2 2,397 2 (134)(6)
Total
$102,611 100 $105,651 100 $(3,040)(3)

A discussion of life operations by distribution channel follows.
Life Insurance
First-Year Collected Premium
(Dollar amounts in thousands)
 Nine Months Ended September 30,
Increase
 2017
2016
(Decrease)
 Amount
% of
Total
Amount
% of
Total
Amount
%
American Income Exclusive Agency$135,935
 57 $129,878
 55 $6,057
 5
Globe Life Direct Response70,989
 30 75,784
 32 (4,795) (6)
Liberty National Exclusive Agency24,587
 10 21,707
 9 2,880
 13
Other Agencies7,325
 3 8,801
 4 (1,476) (17)
Total$238,836
 100 $236,170
 100 $2,666
 1


30
Table of Contents




The American Income Exclusive Agency has historically marketed primarilyLife Division markets to members of labor unions. While labor unions are still the core market for this agency, American Income has diversified in recent yearsand continues to diversify its lead sources by focusing heavily on referrals andbuilding relationships with other affinity groups, utilizing third-party internet vendor leads, and obtaining referrals to help ensurefacilitate sustainable growth. This agencydivision is theGlobe Life's largest contributor to life premium and underwriting margin of any distribution channel. This group produced premium incomechannel at 50% of $741 million, an increase of 9%. First-year collected premium was $136 million, an increase of 5%.the Company's March 31, 2023 total life premium. Net sales rose 6%declined 2% to $167 million. Sales growth in our exclusive agencies is generally dependent on growth in$83 million during the sizefirst three months of the agency force. The American Income Exclusive Agency's average agent count increased 5% to 6,962 for the nine months ended September 30, 2017,2023, compared with 6,603 for$85 million during the same period in 2016. As2022. While first quarter sales declined slightly from a year ago, they grew 19% from the fourth quarter of last year. The underwriting margin, as a percent of premium, was 45% for the three months ended March 31, 2023, down from 47% in the year-ago period due to higher acquisition costs.

Below is the case with all Torchmark agencies,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 period.year. The average producing agent count increased 4% over the year-ago quarter and 3% over the fourth quarter of 2022. The increase in average producing agent count was driven by an increase in new agent recruiting. Sales growth in this division, as well as within our other exclusive agencies, is generally dependent on growth in the size of the agency force.

At March 31,Change
20232022Amount%
American Income9,714 9,385 329 4 
56
        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Management's Discussion & Analysis


American Income Exclusive Agency has been focusingLife continues to focus on growing and strengthening middle management to support sustainable growth of the agency force. To accomplish this,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 placed an increased emphasis on training and financial incentives that appropriately reward agents at all levels for helping develop and train its agents. These programs are designed to provide each agent, from new recruits to top level managers, coaching and instruction specifically designed for their level of experience and responsibility. We are also makingmade considerable investments in information technology, including a customer relationship management (CRM) tool for the agency force. This tool is designed to drive productivity in supportlead distribution, conservation of business, manager dashboards and new agent recruiting. Additionally, this division has invested in and successfully implemented technology that allows the agency.agency force to engage in virtual recruiting, training and sales activity. The agents have shifted to primarily a virtual experience with the customers and have generated a vast majority of sales through virtual presentations. We find this flexibility to be enticing for new recruits as well as a driver of sustainability for our agency force.

The Globe Life Direct Response Unitto Consumer Division (DTC) offers adult and juvenile life insurance through a variety of direct-to-consumer marketing approaches, which includeincluding direct mailings, insert media, and electronic media. TheseIn recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown faster than direct mail response as customer preferences increased marketing activity to internet and mobile technology. The proportion of sales from the internet and inbound phone calls continue to outpace the activity from the direct mailings, but all three channels continue to work in an OmniChannel approach. The different approachesmedia channels support and complement one another in the unit’sdivision's efforts to reach the consumer. The Globe Life Direct Response channel’sDTC's long-term growth over the years has been fueled by constant innovation. In recent years, electronic media production has grown rapidly as management has increased marketing activities related to internetinnovation and mobile technology, and has focused on driving traffic to an inbound call center.name recognition. We continually introduce new initiatives in this unitdivision 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 Globe Life Direct ResponseDTC solicitation for life coverage on themselves than isin comparison to the general adult population. Also, bothfuture offerings to juvenile policyholders and their parents are sources of low acquisition-cost targets forlife insurance sales of additional coverage over time.in the future.
Globe Life Direct Response’s life premium income rose
DTC net sales declined 4% to $614$32 million representing 35% of Torchmark’s total life premiumfor the three months ended March 31, 2023 compared with $34 million for the same period in the first nineprior year. This decrease is primarily a result of the higher life net sales in the prior year ago period, which we are seeing return to pre-pandemic levels. The decline is also due in part to the impact of recent record inflation on the cost of our direct mailings and on our customers, who generally have less discretionary income to purchase and retain life insurance. DTC’s underwriting margin, as a percent of premium, was 23% for the three months of 2017. Netended March 31, 2023 compared with 24% for the same period in 2022. The decrease is primarily attributable to higher acquisition costs.

The Liberty National Division markets individual life insurance to middle-income household and worksite customers. Recent investments in new sales of $107 million fortechnologies as well as recent growth in middle management within the agency are expected to help continue this group decreased 8%. First-year collected premium decreased 6% to $71 million.growth. The underwriting margin as a percent of premium was 15.6%, up32% for the three months ended March 31, 2023, down from 15.2%33% during the same period a year ago. The decrease is primarily attributable to higher acquisition costs in relation to premium during the three months ended March 31, 2023 compared with the same period a year ago.

Net sales rose 27% in the year-ago quarter. While higher claims will cause the underwriting margin to be lower for the full year 2017 as compared with 2016, the increase in the quarter was fully in line with our expectations. The sales and first-year collected premium declines were expected as we continue to refine our marketing efforts in a manner intended to optimize underwriting profits.
The Liberty National Exclusive Agency markets individual and group life insurance to middle-income customers. Life premium income for this agency was $206 million in the first ninethree months of 2017 compared with $203 million forended March 31, 2023 over the same period in 2016. First-year collected premium increased 13%2022. With the division's ability to $25 million. Netreturn to face-to-face customer interaction and the option of virtual sales, the Company continues to project total life net sales to increase for the remainder of 2023 as compared to the prior year.

Below is the average producing agent count at the end of the period for the Liberty National Agency increased 16% to $35 million. The increases in first-year collected premium and net sales are the largest percentage increases of any of Torchmark's life distribution channels.Division.
At March 31,Change
20232022Amount%
Liberty National3,011 2,656 355 13 

The Liberty National Division average producing agent count increased 17% to 1,985 for the nine months ended September 30, 2017significantly compared with 1,693 for the same period in 2016.prior-year comparable period. We continue to execute our long termlong-term plan to grow this agency through expansion from small townsmall-town markets in the southeastSoutheast to more densely populated areas with larger pools of potential agent recruits and customers. ExpansionIn addition to the aforementioned geographic expansion, we have also started a campaign of this agency’smarket expansion to increase our agency presence into more heavily populated, less-penetrated areasin cities that we currently have offices, but not significant enough to
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Globe Life Inc.
Management's Discussion & Analysis

properly serve the community, region, area and city. These tend to be larger geographic cities which will help create long termlong-term sustainable agency growth. Additionally, our prospecting training program has helpedthe 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 CRM platform and enhanced analytical capabilities, help the agents develop additional worksite marketing opportunities as well as improve the productivity of agents selling in the individual life market. As the division continues to gain momentum in its sales and recruiting initiatives and advances its technology and CRM platform, the agency anticipates an increase in recruiting of new agents and an increase in the average producing agent count.

The Other Agenciesother distribution channels primarily include non-exclusive independent agencies selling predominantlyprimarily life insurance. The Other Agenciesother distribution channels contributed $165$52 million of life premium income, or 10%7% of Torchmark’sGlobe Life's total premium income in the first ninethree months of 2017, butended March 31, 2023, and contributed only 2% of net sales for the period.


31

HEALTH INSURANCE
Health insurance, comparing the first nine months of 2017 with the first nine months of 2016.
Health insurance sold by Torchmarkthe Company primarily includes primarily Medicare Supplement insurance, critical illness coverage, accident coverage, and other limited-benefit supplemental health products. In this analysis, all health coverage plans other than Medicare Supplement are classified as limited-benefit plans.products including cancer, critical illness, heart, and intensive care coverage.

Health premium accounted for 30%29% of our total premium in 2023, while the 2017 period. Healthhealth underwriting margin accounted for 27%24% of total underwriting margin, reflective of the lowermargin. Health underwriting margin as a percentage ofincreased 4% to $91 million primarily due to higher premium for health compared with life insurance. As noted under the caption Life Insurance, we have emphasizedgrowth. The Company continues to emphasize life insurance sales relative to health due to life’s superior long-term profitability and its greater contribution to excess investment income.


The following table presents underwriting margin data for health insurance.

Health Insurance
Summary of Results
(Dollar amounts in thousands)
 Three Months Ended March 31,Change
 20232022
 Amount% of
Premium		Amount% of
Premium		Amount%
Premium$322,493 100 $315,684 100 $6,809 2 
Policy obligations190,962 59 189,018 60 1,944 1 
Required interest on reserves(26,323)(8)(25,270)(8)(1,053)4 
Net policy obligations164,639 51 163,748 52 891 1 
Commissions, premium taxes, and non-deferred acquisition expenses54,214 17 51,952 16 2,262 4 
Amortization of acquisition costs12,308 4 12,114 4 194 2 
Total expense231,161 72 227,814 72 3,347 1 
Insurance underwriting margin
$91,332 28 $87,870 28 $3,462 4 

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 Nine Months Ended September 30, Increase
 2017 2016 (Decrease)
 Amount % of
Premium		 Amount % of
Premium		 Amount %
Premium and policy charges$730,557
 100 $709,936
 100 $20,621
 3
Net policy obligations412,245
 56 404,584
 57 7,661
 2
Commissions and acquisition expense153,930
 21 148,140
 21 5,790
 4
Insurance underwriting income before other income and administrative expense$164,382
 23 $157,212
 22 $7,170
 5


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Globe Life Inc.

Management's Discussion & Analysis




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


Health Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
 Three Months Ended March 31,Increase
(Decrease)
 20232022
Amount% of TotalAmount% of TotalAmount%
United American$132,607 41 $131,690 42 $917 1 
Family Heritage96,072 30 89,540 28 6,532 7 
Liberty National46,972 15 47,760 15 (788)(2)
American Income29,594 9 28,766 9 828 3 
Direct to Consumer17,248 5 17,928 6 (680)(4)
Total
$322,493 100 $315,684 100 $6,809 2 
 Nine Months Ended September 30,
Increase
 2017
2016
(Decrease)
 Amount
% of
Total
Amount
% of
Total
Amount
%
United American Independent Agency           
Limited-benefit plans$8,686
   $9,737
   $(1,051) (11)
Medicare Supplement263,904
   256,572
   7,332
 3
 272,590
 37 266,309
 38 6,281
 2
Family Heritage Agency           
Limited-benefit plans188,350
   175,538
   12,812
 7
Medicare Supplement—
   —
   —
 —
 188,350
 26 175,538
 25 12,812
 7
Liberty National Exclusive Agency           
Limited-benefit plans108,085
   106,343
   1,742
 2
Medicare Supplement39,988
   46,080
   (6,092) (13)
 148,073
 20 152,423
 21 (4,350) (3)
American Income Exclusive Agency           
Limited-benefit plans66,077
   62,477
   3,600
 6
Medicare Supplement198
   241
   (43) (18)
 66,275
 9 62,718
 9 3,557
 6
Direct Response           
Limited-benefit plans425
   407
   18
 4
Medicare Supplement54,844
   52,541
   2,303
 4
 55,269
 8 52,948
 7 2,321
 4
Total Health Premium           
Limited-benefit plans371,623
 51 354,502
 50 17,121
 5
Medicare Supplement358,934
 49 355,434
 50 3,500
 1
Total$730,557
 100 $709,936
 100 $20,621
 3


Premium related to limited-benefit plans comprise $180 million, or 56%, of the total health premiums for 2023 compared with $173 million, or 55%, in the same period in the prior year. Premium from Medicare Supplement products comprises the remaining $142 million, or 44%, for 2023 compared with $143 million, or 45%, in the same period in the prior year.
33

TableAnnualized health premium in force was $1.33 billion at March 31, 2023, an increase of Contents3% over $1.29 billion a year earlier.





Presented below is a table of health net sales by distribution channel.
Health Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
 Three Months Ended March 31,Increase
(Decrease)
 20232022
Amount% of TotalAmount% of TotalAmount%
United American$15,380 31 $12,970 30 $2,410 19 
Family Heritage22,543 45 18,602 43 3,941 21 
Liberty National7,096 14 6,214 15 882 14 
American Income4,504 9 4,621 11 (117)(3)
Direct to Consumer550 1 421 1 129 31 
Total
$50,073 100 $42,828 100 $7,245 17 

Health net sales related to limited-benefit plans comprise $38.4 million, or 77%, of the total health net sales for 2023 compared with $30.8 million, or 72%, in the same period in the prior year. Medicare Supplement sales make up the remaining $11.7 million, or 23%, for 2023 compared with $12.0 million, or 28%, in the same period in the prior year.

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 Nine Months Ended September 30,
Increase
 2017
2016
(Decrease)
 Amount
% of
Total
Amount
% of
Total
Amount
%
United American Independent Agency           
Limited-benefit plans$388
   $428
   $(40) (9)
Medicare Supplement33,052
   31,799
   1,253
 4
 33,440
 32 32,227
 33 1,213
 4
Family Heritage Agency           
Limited-benefit plans41,755
   38,144
   3,611
 9
Medicare Supplement—
   —
   —
 —
 41,755
 40 38,144
 39 3,611
 9
Liberty National Exclusive Agency           
Limited-benefit plans14,558
   14,665
   (107) (1)
Medicare Supplement—
   8
   (8) (100)
 14,558
 14 14,673
 15 (115) (1)
American Income Exclusive Agency           
Limited-benefit plans10,369
   9,463
   906
 10
Medicare Supplement—
   —
   —
 —
 10,369
 10 9,463
 9 906
 10
Direct Response           
Limited-benefit plans—
   —
   —
 —
Medicare Supplement3,790
   3,607
   183
 5
 3,790
 4 3,607
 4 183
 5
Total Net Sales           
Limited-benefit plans67,070
 65 62,700
 64 4,370
 7
Medicare Supplement36,842
 35 35,414
 36 1,428
 4
Total$103,912
 100 $98,114
 100 $5,798
 6

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Globe Life Inc.

Management's Discussion & Analysis



The following table presents health insurance first-year collected premium by distribution channel. Health first-year collected premium fell 4% to $100 million as a result of lower group sales in 2016. Group sales can vary significantly from period to period.

Health Insurance
First-Year Collected Premium by Distribution Channel
(Dollar amounts in thousands)
 Three Months Ended March 31,Increase
(Decrease)
 20232022
Amount% of TotalAmount% of TotalAmount%
United American$15,096 35 $14,762 37 $334 2 
Family Heritage17,200 40 14,668 37 2,532 17 
Liberty National6,111 14 5,444 13 667 12 
American Income4,117 9 4,323 11 (206)(5)
Direct to Consumer814 2 691 2 123 18 
Total
$43,338 100 $39,888 100 $3,450 9 
 Nine Months Ended September 30, Increase
 2017
2016 (Decrease)
 Amount
% of
Total
Amount
% of
Total		 Amount
%
United American Independent Agency           
Limited-benefit plans$344
   $433
   $(89) (21)
Medicare Supplement39,306
   47,653
   (8,347) (18)
 39,650
 40
 48,086
 46
 (8,436) (18)
Family Heritage Agency           
Limited-benefit plans33,116
   30,311
   2,805
 9
Medicare Supplement—
   —
   —
 —
 33,116
 33
 30,311
 29
 2,805
 9
Liberty National Exclusive Agency           
Limited-benefit plans12,256
   11,946
   310
 3
Medicare Supplement2
   2
   —
 —
 12,258
 12
 11,948
 12
 310
 3
American Income Exclusive Agency           
Limited-benefit plans10,840
   10,188
   652
 6
Medicare Supplement—
   —
   —
 —
 10,840
 11
 10,188
 10
 652
 6
Direct Response           
Limited-benefit plans—
   —
   —
 —
Medicare Supplement4,108
   3,161
   947
 30
 4,108
 4
 3,161
 3
 947
 30
Total First-Year Collected Premium

          
Limited-benefit plans56,556
 57
 52,878
 51
 3,678
 7
Medicare Supplement43,416
 43
 50,816
 49
 (7,400) (15)
Total$99,972
 100
 $103,694
 100
 $(3,722) (4)

First-year collected premium related to limited-benefit plans comprise $30 million, or 70%, of total first-year collected premium for 2023 compared with $26 million, or 65%, in the same period in the prior year. First-year collected premium from Medicare Supplement policies makes up the remaining $13 million, or 30%, for 2023 compared with $14 million, or 35%, in the same period in the prior year.

A discussion of health operations by distribution channel follows:follows.
The UA Independent AgencyUnited American Division consists of non-exclusive independent agencies appointed with Torchmark who may also sell for other companies. The UA Independent AgencyUnited American Division was Torchmark’sGlobe Life's largest health agency in terms of health premium income. Premium income, was $273 million, representing 37% of Torchmark’s total health premium. Netwith sales were $33 million, or 32% of Torchmark’s health sales. up 19% from the same period in the prior year period.
This agencydivision includes three different units:

•UA General Agency, which primarily producessells individual Medicare Supplement insurance withthrough independent agents;
•Special Markets, which markets retiree health insurance to employer and union group through brokers; and
•Globe Life Benefits, which offers group worksite supplemental health insurance through brokers.

While the increase in sales for this division was driven primarily by sales growth at Globe Life Benefits, the majority of the premium revenue comes from Medicare Supplement premium income of $264 million. The UA Independent Agency represents approximately 74% of all Torchmark Medicare Supplement premium and 90% of Medicare Supplement net sales. Medicare Supplement premium in this agency rose 3%. Total health premium increased 2%. Net sales of the Medicare Supplement product increased 4% in 2017Retiree Health business. Underwriting margin as a resultpercent of an increase in group sales. First-year collected health premium fell 18% to $40 million, as a result of a high level of group sales infor the fourth quarter of 2015 that positively affecteddivision was flat at 10% for the 2016 first-year collected premium.three months ended March 31, 2023 and 2022.

The Family Heritage AgencyDivision primarily markets limited-benefit supplemental health insurance in non-urban areas. Most of theirits policies include a cash-back feature, such as a return of premium, wherebywhere any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Management expects to grow this agency by continuingUnderwriting margin as a percent of premium was 33% for the incorporation of Torchmark’s agent recruiting programs. The Family Heritage Agency contributed $42 million and $38 million in net salesthree months ended March 31, 2023, up from 31% in the nine months of 2017 and 2016, respectively.same period last year.


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Management's Discussion & Analysis



The division experienced a 21% increase in health net sales as compared with the three-month period a year ago, primarily due to an increase in recruiting, agent productivity and training. The division will continue to implement incentive programs to help drive an increase in productivity and the number of producing agents.
Health premium income was $188 million
Below is the average producing agent count at the end of the period for the nine month period of 2017, representing 26% of Torchmark’s health premium compared with $176 million or 25% of health premium in the prior year period.Family Heritage Division. The average producing agent count was 984 for the nine months ended September 30, 2017up 18% compared with 915 for the same period a year ago, driven by a significant increase in 2016, an increase of 8%.recruiting during 2022 and 2023.
At March 31,Change
20232022Amount%
Family Heritage Division1,298 1,100 198 18 
The Liberty National Exclusive AgencyDivision represented 20%15% of all TorchmarkGlobe Life health premium income at $148 million infor the nine months of 2017.three-month period ended March 31, 2023. The Liberty AgencyNational Division markets limited-benefit supplemental health supplemental products, consisting primarily of critical illness insurance. Much of Liberty’sLiberty National's health business is now generated through worksite marketing targeting small businesses of 10businesses. Health premium at Liberty National Division was $47 million for the three months ended March 31, 2023, and $48 million for the same period in 2022. Liberty National's first-year collected premium rose 12% to 25 employees. In 2017, health premium income$6.1 million in the three months ended March 31, 2023 compared with $5.4 million for the same period in 2022. Health net sales for the three months ended March 31, 2023 rose 14% from the comparable period in 2022. The drivers of Liberty Agency declined $4 millionNational's business discussed previously in the life insurance section also apply to $148 millionthe health business. Despite the increase in health sales from the prior year, premium. Liberty’s health premium decline is primarilypremiums were down slightly due to its declining Medicare Supplement block as wethe run off of two older blocks of business that are no longer selling these products from this agency.actively sold.
Other distribution. Certain of our
The Company's other distribution channels, while primarily focused on selling life insurance, also market health products, although their main emphasis is on life insurance. On a combined basis, they accounted for 17% of health premium in the 2017 period.products. The American Income Exclusive AgencyLife Division primarily markets accident plans. The Direct Response unitto Consumer Division primarily markets primarily Medicare Supplements to employer or union-sponsored groups. Direct Response added $4 millionOn a combined basis, these other channels accounted for 14% of Medicare Supplement net saleshealth premium for the three months ended March 31, 2023 compared with 15% for the same period in 2017.2022.
Annuities.
ANNUITIES

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

INVESTMENTS

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

Management also views excess investment income per diluted common share as an important and useful measure to evaluate the performance of the investment segment. It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company. Since implementing our share repurchase program in 1986, we have used $9.1 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 invested assets and insurance liabilities, we view excess investment income per diluted common share as a useful measure to evaluate the investment segment.

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Management's Discussion & Analysis

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

Analysis of Excess Investment Income
(Dollar amounts in thousands, except for per share data)
Three Months Ended
March 31,		Change
20232022Amount%
Net investment income$257,105 $244,894 $12,211 5 
Interest on policy liabilities(1)
(227,850)(219,069)(8,781)4 
Excess investment income
$29,255 $25,825 $3,430 13 
Excess investment income per diluted share
$0.30 $0.26 $0.04 15 
Mean invested assets (at amortized cost)$20,147,812 $19,457,487 $690,325 4 
Average insurance policy liabilities16,487,932 15,810,839 677,093 4 
(1)Interest on policy liabilities is a component of total policyholder benefits, a GAAP measure. The amounts presented for 2022 have been retrospectively adjusted to exclude the interest on deferred acquisition costs due to the LDTI standard and the interest on debt.

Excess investment income increased $3.4 million, or 13%, compared with the year-ago period. Excess investment income per diluted common share was $0.30 for the three months ended March 31, 2023, an increase of 15% 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 three months ended March 31, 2023 was $257 million or 5% greater than the year-ago period. Mean invested assets increased 4% during the first three months of 2023 over the same period last year. The effective annual yield rate earned on the fixed maturity portfolio was 5.18% in the first three months of 2023, compared with 5.15% a year earlier. Investment income grew at a faster rate than the assets due to new investment yields exceeding the yield on dispositions and the average portfolio yield. 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 impact on net investment income. In addition to fixed maturities, the Company has also invested in commercial mortgage loans and limited partnerships with debt like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the investment funds for the three months ended March 31, 2023 was 5.87%. See additional information in Note 4—Investments. For the full year 2023, we currently anticipate the average new money rate on our fixed maturity acquisitions to be approximately 40 basis points higher than the yield achieved on our 2022 acquisitions. This expected increase in yields should result in the investment income growth rate being similar to the growth of our invested assets.

Globe Life's net investment income benefits from higher interest rates on new investments. While increasing interest rates have resulted in a net unrealized loss included in accumulated other comprehensive income (loss) as of March 31, 2023, we are not concerned because we do not generally intend to sell, nor is it likely that we will be required to sell, the fixed maturities prior to their anticipated recovery.

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

The great majority of our life and health insurance policies are fixed interest rate protection policies, not investment products, and are notaccounted for under current GAAP accounting guidance for long-duration insurance products
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Management's Discussion & Analysis

which mandate that interest rate assumptions for a particular block of business be “locked in” for the life of that block of business. Each calendar year, we set the original discount rate to be used to calculate the benefit reserve liability for all insurance policies issued that year. The liability reported on the balance sheet is updated in subsequent periods using current discount rates as of the end of the relevant reporting period with a corresponding adjustment to Other Comprehensive Income. The rates are based on the methodology prescribed in ASU 2018-12. See Note 1—Significant Accounting Policies for additional information.

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

In comparison to the year-ago period, required interest on insurance policy liabilities increased $9 million, or 4%, to $228 million, compared with the 4% growth in average interest-bearing insurance policy liabilities.

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

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

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

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)
 Three Months Ended March 31,
 20232022
 AmountPer ShareAmountPer Share
Fixed maturities:
Sales$(283)$— $(2,295)$(0.02)
Matured or other redemptions(1)
1 — 5,889 0.06 
Provision for credit losses(25,884)(0.26)306 — 
Fair value option—change in fair value1,468 0.01 (4,217)(0.04)
Other(2)
266 — (5,406)(0.06)
Total realized gains (losses)
$(24,432)$(0.25)$(5,723)$(0.06)
(1)During the three months ended March 31, 2023 and 2022, the Company recorded $0 and $0 of exchanges of fixed maturity securities (noncash transactions) that resulted in $0 and $0, respectively, in realized gains, net of tax.
(2)Other realized gains (losses) are primarily a result of changes in the fair value of exchange traded funds.

Investment Acquisitions. Globe Life's investment policy calls for investing primarily in investment grade fixed maturities that meet our quality and yield objectives. We generally invest in securities with longer-term maturities because they more closely match the long-term nature of our policy liabilities. We believe this strategy going forward.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.


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Management's Discussion & Analysis

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)
Three Months Ended
March 31,
 20232022
Cost of acquisitions:
Investment-grade corporate securities$208,117 $187,324 
Investment-grade municipal securities102,387 163,891 
Other investment-grade securities— — 
Total fixed maturity acquisitions(1)
$310,504 $351,215 
Effective annual yield (one year compounded)(2)
5.84 %3.97 %
Average life (in years, to next call)19.7 15.8 
Average life (in years, to maturity)24.9 26.9 
Average ratingAA
(1)Fixed maturity acquisitions included unsettled trades of $25 million in 2023 and $12 million in 2022.
(2)Tax-equivalent basis, where the yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.

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

Acquisitions in both periods consisted primarily of corporate and municipal bonds with securities spanning a diversified range of issuers, industry sectors, and geographical regions. In the first three months of 2023, we invested primarily in the municipal, financial and industrial sectors. For the entire portfolio, the taxable equivalent effective yield earned was 5.18%, up approximately 3 basis points from the yield in the first three months of 2022. Further, as previously noted in the discussion of net investment income, the increase in taxable equivalent effective yield was primarily due to new purchase yields exceeding the yield on dispositions and the average portfolio yield. For the remainder of 2023, the Company will continue to execute on its existing strategy by seeking to invest in assets that satisfy our quality and other objectives, while maximizing the highest risk-adjusted, capital-adjusted return.

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Globe Life Inc.
Management's Discussion & Analysis

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

Selected information concerning the fixed maturity portfolio is as follows:

Fixed Maturity Portfolio Selected Information
At
March 31,
2023		December 31, 2022March 31,
2022
Average annual effective yield(1)
5.20%5.19%5.15%
Average life, in years, to:
Next call(2)
14.614.715.5
Maturity(2)
18.418.518.9
Effective duration to:
Next call(2,3)
8.98.810.0
Maturity(2,3)
10.510.411.5
(1)Tax-equivalent basis. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pre-tax yield on taxable securities.
(2)Globe Life calculates the average life and duration of the fixed maturity portfolio two ways:
(a) based on the next call date which is the next call date for callable bonds and the maturity date for noncallable bonds, and
(b) based on the maturity date of all bonds, whether callable or not.
(3)Effective duration is a measure of the price sensitivity of a fixed-income security to a 1% change in interest rates.

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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 March 31, 2023 and December 31, 2022.

Fixed Maturities by Sector
March 31, 2023
(Dollar amounts in thousands)
Below 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
Corporates:
Financial
Insurance - life, health, P&C$107,271 $— $(12,943)$94,328 $2,397,257 $58,903 $(181,555)$2,274,605 13 13 
Banks67,028 84 (17,173)49,939 1,345,741 18,143 (100,741)1,263,143 7 8 
Other financial74,964 — (22,346)52,618 1,204,407 7,750 (171,098)1,041,059 7 6 
Total financial249,263 84 (52,462)196,885 4,947,405 84,796 (453,394)4,578,807 27 27 
Industrial
Energy44,705 — (10,416)34,289 1,434,766 38,477 (80,338)1,392,905 8 8 
Basic materials— — — — 1,103,576 26,014 (74,413)1,055,177 6 6 
Consumer, non-cyclical— — — — 2,138,846 31,273 (166,382)2,003,737 12 12 
Other industrials57,979 3,053 (277)60,755 1,206,816 30,521 (87,184)1,150,153 6 6 
Communications28,447 — (2,610)25,837 885,502 13,522 (87,212)811,812 5 5 
Transportation— — — — 531,796 18,925 (25,039)525,682 3 3 
Consumer. cyclical130,547 — (19,805)110,742 575,225 6,327 (65,777)515,775 3 3 
Technology— — — — 248,981 386 (51,383)197,984 1 1 
Total industrial261,678 3,053 (33,108)231,623 8,125,508 165,445 (637,728)7,653,225 44 44 
Utilities35,493 456 (2,463)33,486 1,958,888 70,798 (94,579)1,935,107 10 11 
Total corporates
546,434 3,593 (88,033)461,994 15,031,801 321,039 (1,185,701)14,167,139 81 82 
States, municipalities, and political divisions:
General obligations— — — — 923,669 9,243 (140,500)792,412 5 5 
Revenues— — — — 1,970,492 32,164 (286,429)1,716,227 11 10 
Total states, municipalities, and political divisions— — — — 2,894,161 41,407 (426,929)2,508,639 16 15 
Other fixed maturities:
Government (U.S. and foreign)— — — — 443,230 127 (38,764)404,593 2 2 
Collateralized debt obligations36,778 8,724 — 45,502 36,778 8,724 — 45,502 — — 
Other asset-backed securities12,387 — (808)11,579 87,966 4 (6,958)81,012 1 1 
Total fixed maturities
$595,599 $12,317 $(88,841)$519,075 $18,493,936 $371,301 $(1,658,352)$17,206,885 100100



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Globe Life Inc.
Management's Discussion & Analysis

Fixed Maturities by Sector
December 31, 2022
(Dollar amounts in thousands)
Below 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 Cost, netAt Fair Value
Corporates:
Financial
Insurance - life, health, P&C$107,355 $22 $(13,966)$93,411 $2,375,633 $44,578 $(216,938)$2,203,273 13 13 
Banks26,944 84 (192)26,836 1,336,868 14,035 (100,038)1,250,865 7 8 
Other financial74,963 1 (22,026)52,938 1,195,293 4,513 (187,513)1,012,293 7 6 
Total financial209,262 107 (36,184)173,185 4,907,794 63,126 (504,489)4,466,431 27 27 
Industrial
Energy44,723 — (10,168)34,555 1,436,598 22,637 (101,923)1,357,312 8 8 
Basic materials— — — — 1,090,309 14,913 (95,958)1,009,264 6 6 
Consumer, non-cyclical— — — — 2,146,003 20,427 (232,196)1,934,234 12 12 
Other industrials25,461 — (522)24,939 1,212,674 19,107 (121,540)1,110,241 6 7 
Communications28,499 — (2,253)26,246 857,375 7,779 (110,132)755,022 5 5 
Transportation— — — — 520,029 11,684 (34,269)497,444 3 3 
Consumer. cyclical149,465 — (27,822)121,643 592,657 4,903 (85,005)512,555 3 3 
Technology— — — — 247,996 90 (59,672)188,414 1 1 
Total industrial248,148 — (40,765)207,383 8,103,641 101,540 (840,695)7,364,486 44 45 
Utilities35,496 433 (3,173)32,756 1,924,190 36,670 (125,713)1,835,147 11 11 
Total corporates492,906 540 (80,122)413,324 14,935,625 201,336 (1,470,897)13,666,064 82 83 
States, municipalities, and political divisions:
General obligations— — — — 915,725 5,041 (167,393)753,373 5 5 
Revenues— — — — 1,875,305 19,287 (338,054)1,556,538 10 9 
Total states, municipalities, and political divisions— — — — 2,791,030 24,328 (505,447)2,309,911 15 14 
Other fixed maturities:
Government (U.S., municipal, and foreign)— — — — 449,603 33 (51,674)397,962 2 2 
Collateralized debt obligations37,098 13,266 — 50,364 37,098 13,266 — 50,364 — — 
Other asset-backed securities12,493 — (1,618)10,875 88,336 4 (9,276)79,064 1 1 
Total fixed maturities$542,497 $13,806 $(81,740)$474,563 $18,301,692 $238,967 $(2,037,294)$16,503,365 100100



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Globe Life Inc.
Management's Discussion & Analysis

Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the March 31, 2023 fixed maturity portfolio, representing 81% of amortized cost, net and 82% 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 March 31, 2023, the total fixed maturity portfolio consisted of 987 issuers.

Fixed maturities had a fair value of $17.2 billion at March 31, 2023, compared with $16.5 billion at December 31, 2022. The net unrealized loss position in the fixed-maturity portfolio decreased from $1.8 billion at December 31, 2022 to $1.3 billion at March 31, 2023 due to an increase in market rates during the period.

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

An analysis of the fixed maturity portfolio by a composite quality rating at March 31, 2023 and December 31, 2022, is shown in the following tables. The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s 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 $455 million at amortized cost, net of allowance for credit losses ($420 million at fair value) for which the ratings were assigned by the third-party managers.

Fixed Maturities by Rating
At March 31, 2023
(Dollar amounts in thousands)
Amortized Cost, net% of TotalFair
Value		% of TotalAverage Composite Quality Rating on Amortized Cost, net
Investment grade:
AAA$835,032 4 $763,470 5 
AA2,884,448 16 2,462,806 14 
A4,818,028 26 4,638,755 27 
BBB+3,978,836 22 3,795,423 22 
BBB4,146,010 22 3,870,697 22 
BBB-1,235,983 7 1,156,659 7 
Total investment grade
17,898,337 97 16,687,810 97 A-
Below investment grade:
BB482,569 3 416,186 3 
B70,344 — 51,482 — 
Below B42,686 — 51,407 — 
Total below investment grade
595,599 3 519,075 3 BB-
$18,493,936 100 $17,206,885 100 
Weighted average composite quality rating
A-


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Globe Life Inc.
Management's Discussion & Analysis

Fixed Maturities by Rating
At December 31, 2022
(Dollar amounts in thousands)
Amortized
Cost
% of Total
Fair
Value
% of TotalAverage Composite Quality Rating on Amortized Cost
Investment grade:
AAA$828,315 5 $733,524 4 
AA2,779,587 15 2,260,257 14 
A4,752,633 26 4,438,913 27 
BBB+3,934,053 21 3,639,118 22 
BBB4,254,730 23 3,844,182 23 
BBB-1,209,877 7 1,112,808 7 
Total investment grade
17,759,195 97 16,028,802 97 A-
Below investment grade:
BB462,356 3 389,132 3 
B43,044 — 35,067 — 
Below B37,097 — 50,364 — 
Total below investment grade
542,497 3 474,563 3 BB-
$18,301,692 100 $16,503,365 100 
Weighted average composite quality rating
A-

The overall quality rating of the portfolio is A-, the same as year-end 2022. Fixed maturities rated BBB are 51% of the total portfolio at March 31, 2023, the same as year-end 2022. 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 March 31, 2023. Of our fixed maturity purchases, BBB securities generally provide the Company with the best risk-adjusted, capital-adjusted returns largely due to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets.

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

Below-Investment Grade Fixed Maturities
(Dollar amounts in thousands)
Three Months Ended
March 31,
20232022
Balance at beginning of period
$542,497 $701,546 
Downgrades by rating agencies98,658 — 
Upgrades by rating agencies— (96,080)
Dispositions(13,675)(23,041)
Provision for credit losses(32,767)(31)
Amortization and other886 875 
Balance at end of period
$595,599 $583,269 

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
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Globe Life Inc.
Management's Discussion & Analysis

losses, were 9% of our shareholders’ equity excluding accumulated other comprehensive income as of March 31, 2023. Globe Life invests long term and as such, one of our key criterion in our investment process is to select issuers that have the ability to weather multiple financial cycles.

OPERATING EXPENSES

Operating expenses comparingare included in the first nine months of 2017 with the first nine months of 2016. Operating expenses consist of"Corporate and Other" segment and are classified into two categories: insurance administrative expenses and expenses of the Parent Company expenses. Also included is stock compensation expense, which is viewed by us as Parent Company expense.Company. Insurance administrative expenses generally include expenses incurred after a policy has been issued. As these expenses relate to premium income for a given period; therefore, we measure thoseperiod, management measures the expenses as a percentage of premium income. Total expenses are measuredThe Company also views stock-based compensation expense as a percentageParent Company expense. Expenses associated with the issuance of total revenues. our insurance policies are reflected as acquisition expenses and included in the determination of underwriting margin.

An analysis of operating expenses is shown below.


Operating Expenses Selected Information
(Dollar amounts in thousands)
 Nine Months Ended September 30,
 2017 2016

Amount % of
Premium		 Amount % of
Premium
Insurance administrative expenses:       
Salaries$70,505
 2.9 $67,683
 2.9
Other employee costs25,320
 1.0 21,834
 0.9
Information technology costs19,325
 0.8 17,712
 0.7
Legal costs6,520
 0.2 6,352
 0.3
Other administrative costs34,081
 1.4 32,548
 1.4
Total insurance administrative expenses155,751
 6.3 146,129
 6.2
        
Parent company expense7,228
   6,360
  
Stock compensation expense24,809
   20,334
  
Non-operating fees—
   257
  
Total operating expenses, per Condensed Consolidated Statements of Operations
$187,788
   $173,080
  
        
Insurance administrative expenses:       
Increase (decrease) over prior year6.6%   5.4%  
Total operating expenses:       
Increase (decrease) over prior year8.5%   3.6%  
Insurance administrative expenses of $156 million were up 6.6% in 2017 when compared with the prior year period of $146 million. As a percentage of total premium, insurance administrative expenses were 6.3% in 2017 compared with 6.2% in 2016. The increase in other employee costs was due primarily to higher pension expense driven by lower interest rates. The increase in information technology costs was due to investments that will enhance our customer

36
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experience, improve our data analytics capabilities, improve our ability to react quickly to future changes and bolster our information security programs.
The increase in stock compensation expense was primarily due to higher expense associated with equity awards, reflecting Torchmark's higher share price as compared with the same period a year ago.
Investments (excess investment income), comparing the first nine months of 2017 with the first nine months of 2016. 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. It is the measure that we use to evaluate the performance of the investment segment as described in Note 10—Business Segments. It is defined as net investment income less the required interest on net policy liabilities and the interest cost associated with capital funding or “financing costs.”
We also view 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 $7.0 billion of cash flow to repurchase Torchmark shares (average split-adjusted price per diluted common share of $15.90) after determining that the repurchases provided a greater return than other investment alternatives. Share repurchases reduce excess investment income because of the foregone earnings on the cash that would otherwise have been invested in interest-bearing assets, but they also reduce the number of shares outstanding. In order to put all capital resource uses on a comparable basis, we believe that excess investment income per diluted share is an appropriate measure of the investment segment.
The following table summarizes Torchmark’s investment income, excess investment income, and excess investment income per diluted common share.
Excess Investment Income
(Dollar amounts in thousands)
 Three Months Ended March 31,Increase
 20232022(Decrease)
Amount% of
Premium		Amount% of
Premium		Amount%
Insurance administrative expenses:
Salaries$29,870 2.7 $30,283 2.8 $(413)(1)
Other employee costs9,413 0.9 11,276 1.1 (1,863)(17)
Information technology costs14,249 1.3 12,899 1.2 1,350 10 
Legal costs3,740 0.3 3,643 0.3 97 3 
Other administrative costs16,635 1.5 14,464 1.4 2,171 15 
Total insurance administrative expenses73,907 6.7 72,565 6.8 1,342 2 
Parent company expense2,585 2,640 (55)
Stock compensation expense7,679 9,035 (1,356)
Non-operating expenses— 112 (112)
$84,171 $84,352 $(181)— 

Total operating expenses for March 31, 2023 were flat compared with the prior year. Insurance administrative expenses increased $1.3 million primarily due to higher information technology costs, information security costs, and other administrative costs offset by a decline in pension-related employee benefit costs. Insurance administrative expenses as a percent of premium were 6.7%, compared to 6.8% for the same period in 2022.

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 Nine Months Ended 
 September 30,		 Increase
(Decrease)
 2017 2016 Amount %
Net investment income$634,930
 $601,415
 $33,515
 6
Interest on net insurance policy liabilities:       
Interest on reserves(547,443) (524,093) (23,350) 4
Interest on deferred acquisition costs157,096
 151,546
 5,550
 4
Net required interest(390,347) (372,547) (17,800) 5
Financing costs(62,825) (62,860) 35
 —
Excess investment income$181,758
 $166,008
 $15,750
 9
        
Excess investment income per diluted share$1.52
 $1.35
 $0.17
 13
        
Average invested assets (at amortized cost)$15,275,412
 $14,339,950
 $935,462
 7
Average net insurance policy liabilities(1)
9,306,010
 8,896,284
 409,726
 5
Average debt and preferred securities (at amortized cost)1,471,616
 1,361,234
 110,382
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Table of Contents
Globe Life Inc.
Management's Discussion & Analysis

SHARE REPURCHASES

Globe Life has an ongoing share repurchase program that began in 1986, and is reviewed with the Board of Directors by management quarterly and annually reaffirmed by the Board of Directors. With no specified authorization amount, management determines the amount of repurchases based on the amount of the excess cash flows after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses. Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance subsidiaries less interest expense paid on its debt and other limited operating activities. The majority of our share repurchases are made from excess cash flow after the payment of shareholder dividends. Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises. On August 10, 2022, the Board of Directors reauthorized the Parent Company’s share repurchase program in amounts and with timing that management, in consultation with the Board, determines to be in the best interest of the Company and its shareholders.
The following chart summarizes share repurchases for the three month periods ended March 31, 2023 and 2022.

Analysis of Share Repurchases
(Amounts in thousands, except per share data)
 Three Months Ended March 31,
 20232022
 SharesAmountAverage
Price		SharesAmountAverage
Price
Purchases with:
Excess cash flow at the Parent Company(1)
1,176 $135,321 $115.04 880 $88,621 $100.70 
Option exercise proceeds368 42,754 116.27 299 30,861 103.07 
Total1,544 $178,075 $115.33 1,179 $119,482 $101.30 
(1) Interest bearingExcludes excise tax on the repurchase of treasury stock of $1.2 million for the three months ended March 31, 2023.
Throughout the remainder of this discussion, share repurchases will only refer to those made from excess cash flow at the Parent Company.

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

Insurance Subsidiary Liquidity. The operations of our insurance subsidiaries have historically generated substantial cash inflows in excess of immediate cash needs. Cash inflows for the insurance subsidiaries primarily include premium and investment income. In addition to investment income, maturities and scheduled repayments in the investment portfolio are cash inflows. Cash outflows from operations include policy liabilities,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 annually generate more operating cash inflows than cash outflows, the companies also have the entire available-for-sale fixed maturity investment portfolio available to create additional cash flows if required.

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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 11—Debt for further details.

Parent Company Liquidity. An important source of Parent Company liquidity is the dividends from its insurance subsidiaries. These dividends are received throughout the year and are used by the Parent Company to pay dividends on common and preferred stock, interest and principal repayment requirements on Parent Company debt, and operating expenses of the Parent Company.
Three Months Ended
March 31,		Twelve Months Ended December 31,
20232022Projected 20232022
Liquidity Sources:
Dividends from Subsidiaries$129,725 $107,083 $470,000 $407,042 
Excess Cash Flows(1)
104,440 69,270 345,000 278,434 
(1)Excess cash flows are reported net of deferred acquisition costsshareholder dividends. For the three months ended March 31, 2023 and excluding2022, shareholder dividends were $20 million. For the attributed unrealized gainstwelve months ended December 31, 2023, we project approximately $84 million in shareholder dividends, consistent with the $81 million paid in 2022.

Dividends from subsidiaries and losses thereon.

Excess investment income excess cash flows are projected to be higher in 2023 than in 2022 primarily due to lower life obligations and the growth in our underwriting margins, both of which resulted in higher statutory earnings generated by the affiliates. Additional sources of liquidity for the 2017 periodParent Company are cash, intercompany receivables, intercompany borrowings, public debt markets, term loans, and a revolving credit facility. At March 31, 2023, the Parent Company had access to $77 million of invested cash, net intercompany receivables and other liquid assets.

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

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

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

Credit Facility—Commercial Paper
(Dollar amounts in thousands)
At
March 31,
2023		December 31, 2022March 31,
2022
Balance of commercial paper at end of period (par value)$305,000 $285,000 $372,524 
Annualized interest rate5.28 %4.78 %0.69 %
Letters of credit outstanding$115,000 $125,000 $125,000 
Remaining amount available under credit line330,000 340,000 252,476 

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        GL Q1 2023 FORM 10-Q
Table of Contents
Globe Life Inc.
Management's Discussion & Analysis

Credit Facility—Commercial Paper Activity
(Dollar amounts in thousands)
 Three Months Ended March 31,
 20232022
Average balance of commercial paper outstanding during period (par value)$293,892 $426,243 
Daily-weighted average interest rate (annualized)4.95 %0.43 %
Maximum daily amount outstanding during period (par value)$477,700 $500,529 

The Company increased9%to$182 the commercial paper borrowings by $20 million whensince year-end. We had no difficulties in accessing the commercial paper market under this facility during the three months ended March 31, 2023 and 2022.

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

Consolidated Liquidity. Consolidated net cash inflows from operations were $477 million in the first three months of 2023, compared to $166with $397 million in the same period in 2016.of 2022. The increase in excess investment income is primarily attributedattributable to flat interest expense and an increase in net investment income due to the declinefluctuations in the negative impactsettlement of delayscertain amounts included in other liabilities. In addition to cash inflows from operations, our insurance companies received proceeds from dispositions of receiving Medicare Part D reimbursements. On a per diluted common share basis, excess investment income increased 13%, higher than the percentage increasefixed maturities available for sale in the dollar amount of excess investment$62 million during the 2023 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 $246 million at March 31, 2023, compared with $207 million at December 31, 2022. In addition to these liquid assets, $17.2 billion of fixed income as a resultsecurities are available for sale in the event of an unexpected need. Approximately $525 million, at fair value, are pledged for outstanding FHLB advances and reinsurance. Further, approximately 97% of our share repurchase program.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.
Net investment income increased $34 million or 6% in 2017, below the 7% increase in average invested assets (with fixed maturities at amortized cost) over the same period last year. Net investment income has been negatively impacted


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Table of Contents

Globe Life Inc.

Management's Discussion & Analysis



Capital Resources.The Parent Company's capital structure consists of short-term debt (the commercial paper facility and current maturities of long-term debt), long-term debt, and shareholders’ equity.
during recent years
Long-Term Borrowings. The outstanding long-term debt at book value was $1.6 billion at March 31, 2023 and $1.6 billion at December 31, 2022.

Selected Information about Debt Issues
As of March 31, 2023
(Dollar amounts in thousands)
InstrumentIssue DateMaturity DateCoupon Rate Interest Payment DatesPar
Value		Book
Value		Fair
Value
Senior notes05/27/199305/15/20237.875%semiannual$165,612 $165,574 $164,746 
Senior notes09/27/201809/15/20284.550%semiannual550,000 545,771 546,348 
Senior notes08/21/202008/15/20302.150%semiannual400,000 396,332 323,984 
Senior notes(1)
05/19/202206/15/20324.800%semiannual250,000 245,588 241,275 
Senior notes11/17/201711/17/20575.275% semiannual125,000 123,415 124,265 
Junior subordinated debentures06/14/202106/15/20614.250%quarterly325,000 317,248 248,300 
1,815,612 1,793,928 1,648,918 
Less current maturity of long-term debt165,612 165,574 164,746 
Total long-term debt
1,650,000 1,628,354 1,484,172 
Current maturity of long-term debt165,612 165,574 164,746 
FHLB borrowings45,000 45,000 45,000 
Commercial paper305,000 303,673 303,673 
Total short-term debt
515,612 514,247 513,419 
Total debt
$2,165,612 $2,142,601 $1,997,591 
(1)An additional $150 million par value and book value is held by low interest ratesinsurance subsidiaries that eliminates in consolidation.

In April 2023, we closed on new investments and the turnover of higher-yielding assets in the portfolio. As such, growth in net investment income has been slower than the growth in mean invested assets in recent years.a $170 million delayed draw variable rate term loan with an 18-month term. The effective annual yield earned on the fixed maturity portfolio was 5.68% in the first nine months of 2017, compared with 5.80% a year earlier. The decrease in the overall portfolio yield during recent periods is due primarily to investing at lower yield rates than the overall portfolio yield rates and reinvesting at yield rates lower than disposition yield rates. We currently expect that the average annual turnover of fixed maturity assets during the next five years will not exceed 1% to 2% of the portfolio and that this turnover will not have a material negative impact on investment income.
Should interest rates rise, especially long-term rates, Torchmark's net investment income would benefit due to higher interest rates on new purchases. 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 90 to 95 basis points before the net unrealized gains on our fixed maturity portfolio as of September 30, 2017 would be eliminated. Should interest rates increase further than that, we would not be concerned with potential interest rate driven unrealized losses in our fixed maturity portfolio because we have the intent and, more importantly, the ability, to hold our fixed maturities to maturity.
Required interest on net insurance policy liabilities reduces net investment income since it is the amount of net investment income considered by management necessary to “fund” net insurance policy liabilities, which is the net of the benefit reserve liability and deferred acquisition cost asset. As such, it is removedproceeds from the investment segment and applied to the insurance segments to offset the effect of the interest required by the insurance segments. As discussed in Note 10—Business Segments, management believes this provides a more meaningful analysis of the investment and insurance segments. Required interest is based on the actuarial interest assumptions used to discount the benefit reserve liability and to amortize the 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 accounting guidance for long-duration insurance products which mandates that interest rate assumptions for a particular block of business be “locked in” for the life of that block. Each calendar year, we set the discount rate toterm loan will be used to calculateretire the benefit reserve liability7.875% Senior Notes maturing on May 15, 2023. Refer to Note 11—Debt for a complete analysis and 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 policiesdescription 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 ratelong-term debt issues outstanding.

Financing costs for the entire in force block is a weighted averagecorporate and other segment consist primarily 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.
Required interest on net insurance policy liabilities increased $18 million or 5% to $390 million, in line withour various debt instruments. The table below presents the growth in average net interest-bearing insurance policy liabilities.components of financing costs and reconciles interest expense per the Condensed Consolidated Statements of Operations.
Financing costs on our debt were flat in the first nine months of 2017 at $63 million.
More information concerning debt can be found in the Capital Resources section of this report.
AnalysisSelected Information about Debt Issues
As of Financing CostsMarch 31, 2023
(Dollar amounts in thousands)
InstrumentIssue DateMaturity DateCoupon Rate Interest Payment DatesPar
Value		Book
Value		Fair
Value
Senior notes05/27/199305/15/20237.875%semiannual$165,612 $165,574 $164,746 
Senior notes09/27/201809/15/20284.550%semiannual550,000 545,771 546,348 
Senior notes08/21/202008/15/20302.150%semiannual400,000 396,332 323,984 
Senior notes(1)
05/19/202206/15/20324.800%semiannual250,000 245,588 241,275 
Senior notes11/17/201711/17/20575.275% semiannual125,000 123,415 124,265 
Junior subordinated debentures06/14/202106/15/20614.250%quarterly325,000 317,248 248,300 
1,815,612 1,793,928 1,648,918 
Less current maturity of long-term debt165,612 165,574 164,746 
Total long-term debt
1,650,000 1,628,354 1,484,172 
Current maturity of long-term debt165,612 165,574 164,746 
FHLB borrowings45,000 45,000 45,000 
Commercial paper305,000 303,673 303,673 
Total short-term debt
515,612 514,247 513,419 
Total debt
$2,165,612 $2,142,601 $1,997,591 
 Nine Months Ended 
 September 30,		 Increase
(Decrease)
 2017 2016 Amount %
Interest on funded debt$55,089
 $57,647
 $(2,558) (4)
Interest on term loan1,706
 536
 1,170
 *
Interest on short term debt6,026
 4,674
 1,352
 29
Other4
 3
 1
 33
Financing costs$62,825
 $62,860
 $(35) —
*Percent change is not meaningful.


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Investments (acquisitions), comparing the first nine months of 2017 with the first nine months of 2016. Torchmark’s investment policy calls for investing primarily in investment grade fixed maturities that meet our quality(1)An additional $150 million par value 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 because our cash flows from operations and invested assets are positive, stable and predictable. If longer-term securities that meet our quality and yield objectives are not available, we do not relax our quality objectives, but instead, consider investing in shorter or lower yielding securities, taking into consideration the slope of the yield curve and other factors.
The following table summarizes selected information for fixed maturity purchases. The effective annual yield shown is the yield calculated to the “worst call date.” For non-callable bonds, the worst-call date is always the maturity date. For callable bonds, the worst-call date is the call date that produces the lowest yield (or the maturity date, if the yield calculated to the maturity date is lower than the yield calculated to each call date).

Fixed Maturity Acquisitions Selected Information
(Dollar amounts in thousands)
 Nine Months Ended 
 September 30,
 2017 2016
Cost of acquisitions(1):

 
Corporate securities$1,046,773
 $910,085
Other5,932
 15,737
Total fixed maturity acquisitions$1,052,705
 $925,822
    
Effective annual yield(2)
4.74% 4.73%
Average life (in years, to next call)22.8
 24.1
Average life (in years, to maturity)23.7
 24.8
Average ratingBBB+
 BBB+

(1) Total fixed maturity acquisitions include unsettled trades of $10.0 million in 2017 and $15.7 million in 2016.
(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.
Acquisitions in both periods consisted primarily of corporate bonds, with securities spanning a diversified range of issuers, industry sectors, and geographical regions. All of the acquired securities were investment grade.
Investments (portfolio composition). The composition of the investment portfolio at book value is held by insurance subsidiaries that eliminates in consolidation.

In April 2023, we closed on September 30, 2017 was as follows:
Invested Assets at September 30, 2017
(Dollar amounts in thousands)

Amount
% of
Total
Fixed maturities (at amortized cost)$14,914,580
 96
Policy loans523,318
 3
Other long-term investments(1)
69,592
 1
Short-term investments65,482
 —
Total$15,572,972
 100
(1) Includes equities available for sale at amortized cost.
Approximately 96% of our investments at book value are in a diversified fixed-maturity portfolio, the same percentage as at year end. Policy loans, which are secured by policy cash values, make up approximately 3% of our investments. We also have insignificant investments in equity securities and other long-term investments. Because fixed maturities represent such a significant portion of our investment portfolio, the remainder of the discussion of portfolio composition will focus on fixed maturities.

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Fixed Maturities. The following table summarizes certain information about the major corporate sectors and security types held in our fixed maturity portfolio at September 30, 2017.

Fixed Maturities by Sector
At September 30, 2017
(Dollar amounts in thousands)
 
Below Investment Grade Total Fixed Maturities % of Total Fixed Maturities
  Cost or
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		 Cost or
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value		 At Amortized CostAt Fair Value
 
 Corporates:            
 Financial            
 Insurance - life, health, P&C$58,294
$2,842
$(3,381)$57,755
 $2,003,179
$319,173
$(4,544)$2,317,808
 1314
 Banks31,035
624
(3,030)28,629
 739,517
107,348
(3,191)843,674
 55
 Other financial74,955
—
(19,204)55,751
 793,595
59,983
(21,175)832,403
 55
 Total financial164,284
3,466
(25,615)142,135
 3,536,291
486,504
(28,910)3,993,885
 2324
 Utilities            
 Electric20,713
1,239
—
21,952
 1,469,534
275,245
(2,332)1,742,447
 1011
 Gas and water—
—
—
—
 507,550
51,148
(439)558,259
 33
 Total utilities20,713
1,239
—
21,952
 1,977,084
326,393
(2,771)2,300,706
 1314
 Industrial - Energy            
 Pipelines40,598
531
(2,250)38,879
 865,245
100,340
(5,289)960,296
 66
 Exploration and production28,918
777
—
29,695
 531,485
61,007
(4,023)588,469
 44
 Oil field services33,871
—
(4,568)29,303
 83,730
9,127
(4,568)88,289
 11
 Refiner—
—
—
—
 67,012
14,611
(5)81,618
 ——
 Driller54,582
211
(14,185)40,608
 54,582
211
(14,185)40,608
 ——
 Total energy157,969
1,519
(21,003)138,485
 1,602,054
185,296
(28,070)1,759,280
 1111
 Industrial - Basic materials            
 Chemicals—
—
—
—
 541,902
45,379
(497)586,784
 44
 Metals and mining68,073
7,831
—
75,904
 390,213
74,145
—
464,358
 33
 Forestry products and paper—
—
—
—
 112,311
15,338
—
127,649
 11
 Total basic materials68,073
7,831
—
75,904
 1,044,426
134,862
(497)1,178,791
 88
 Industrial - Consumer, non-cyclical—
—
—
—
 1,770,933
168,731
(7,462)1,932,202
 1111
 Other industrials47,204
2,792
(29)49,967
 1,357,486
164,785
(2,430)1,519,841
 99
 Industrial -
Transportation		26,572
387
(246)26,713
 551,533
77,257
(614)628,176
 44
 Other corporate sectors116,459
4,920
(5,094)116,285
 1,300,884
120,485
(11,667)1,409,702
 98
 Total corporates601,274
22,154
(51,987)571,441
 13,140,691
1,664,313
(82,421)14,722,583
 8889
 Other fixed maturities:            
 Government (U.S., municipal, and foreign)306
—
(36)270
 1,568,390
142,000
(1,205)1,709,185
 1110
 Collateralized debt obligations59,204
19,558
(8,994)69,768
 59,204
19,558
(8,994)69,768
 ——
 Other asset-backed securities—
—
—
—
 144,701
4,967
(17)149,651
 11
 
Mortgage-backed securities(1)
—
—
—
—
 1,594
133
(1)1,726
 ——
 Total fixed maturities$660,784
$41,712
$(61,017)$641,479
 $14,914,580
$1,830,971
$(92,638)$16,652,913
 100100
(1) Includes GNMA's.


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At September 30, 2017, fixed maturities had a fair value of $16.7 billion, compared with $15.2 billion at December 31, 2016. The net unrealized gain position in the fixed-maturity portfolio increased from $1.1 billion at December 31, 2016 to $1.7 billion at September 30, 2017. The September 30, 2017 net unrealized gain consisted of gross unrealized gains of $1.8 billion offset by $93$170 million of gross unrealized losses, compared with the December 31, 2016 net unrealized gain which consisted of a gross unrealized gain of $1.3 billion and a gross unrealized loss of $216 million.
Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the fixed maturity portfolio, representing 88% of amortized cost and 89% 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 agency mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers; the total fixed maturity portfolio consisted of 600 issuers. The net unrealized gain of the fixed maturity portfolio increased $681 million from December 31, 2016.
An analysis of the fixed maturity portfolio at September 30, 2017 by a composite quality rating is shown in the table below. The composite quality rating for each security 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 using a methodology developed by Torchmark Corporation using ratings from the various rating agencies noted above (It should be noted that the composite quality rating is not a Standard & Poor's credit rating. Standard and 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 chart below are private placement fixed maturity holdings of $593 million at amortized cost ($615 million at fair value). The ratings for these holdings were assigned by the third party managers of those securities.

Fixed Maturities by Rating
(Dollar amounts in thousands)
 September 30, 2017

Amortized
Cost		 % Fair
Value		 %
Investment grade:       
AAA$647,007
 4 $681,920
 4
AA1,261,049
 9 1,418,391
 9
A4,023,931
 27 4,727,798
 28
BBB+3,493,852
 23 3,886,434
 23
BBB3,201,975
 22 3,531,015
 21
BBB-1,625,982
 11 1,765,876
 11
Investment grade14,253,796
 96 16,011,434
 96
Below investment grade:       
BB362,855
 2 351,691
 2
B161,422
 1 140,346
 1
Below B136,507
 1 149,442
 1
Below investment grade660,784
 4 641,479
 4

$14,914,580
 100 $16,652,913
 100
Of the $14.9 billion of fixed maturities at amortized cost as of September 30, 2017, $14.3 billion or 96% were investment gradedelayed draw variable rate term loan with an average rating of A-. Below-investment-grade bonds were $661 million with an average rating of B+. Below-investment-grade bonds at amortized cost were 16% of our shareholders’ equity, excluding the effect of unrealized gains and losses on fixed maturities as of September 30, 2017. Overall, the total portfolio was rated BBB+ based on amortized cost, the same as at the end of 2016.

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An analysis of the changes in our portfolio of below-investment-grade bonds at amortized cost during the first nine months of 2017 is as follows:
Below-Investment-Grade Bonds
(Dollar amounts in thousands)
Balance as of December 31, 2016$751,144
Downgrades by rating agencies—
Upgrades by rating agencies(76,659)
Disposals(16,422)
Amortization and other2,721
Balance as of September 30, 2017$660,784

As noted earlier, 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. Our investment portfolio does not contain counterparty risks as we are not a party to any derivatives contracts. We also do not participate in securities lending and we have no off-balance sheet investments.
Additional information concerning the fixed-maturity portfolio is as follows:
Fixed Maturity Portfolio Selected Information

September 30,
2017		 December 31, 2016 September 30,
2016
Average annual effective yield(1)
5.63% 5.74% 5.76%
Average life, in years, to:     
Next call(2)
17.4 17.6 17.6
Maturity(2)
19.2 19.8 19.9
Effective duration to:     
Next call(2)(3)
10.7 10.4 10.8
Maturity(2)(3)
11.4 11.3 11.6

(1) Tax-equivalent basis.18-month term. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.
(2) Torchmark 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 particular change in interest rates.
Realized Gains and Losses, comparing the first nine months of 2017 with the first nine months of 2016. As discussed in Note 10—Business Segments, our core business of providing insurance coverage requires us to maintain a large and diverse investment portfolio to support our insurance liabilities. From time to time, investments are disposed of or written down prior to maturity, resulting in realized gains or losses. Because these dispositions and write-downs are outside the course of our normal operations, management removes the effects of such gains and losses when evaluating its overall core operating results.

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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 per share data)
 Nine Months Ended September 30,
 2017 2016
 Amount Per Share Amount Per Share
Fixed maturities:       
Investment sales$3,153
 $0.02
 $3,847
 $0.03
Investments called or tendered5,628
 0.05
 995
 0.01
Investment writedowns (1)
(159) —
 —
 —
Other investments(2,387) (0.02) 215
 —
Total$6,235
 $0.05
 $5,057
 $0.04

(1) Written down due to other-than-temporary impairment.
(1) Written down due to other-than-temporary impairment

Financial Condition
Liquidity. Liquidity provides Torchmark with the ability to meet on demand the cash commitments required to support our business operations and meet our financial obligations. Our liquidity is evidenced by consistent positive cash flow, a portfolio of marketable investments, and our line of credit facility.
Insurance subsidiary liquidity. The operations of our insurance subsidiaries have historically generated substantial cash inflows in excess of immediate cash needs. Sources of cash flows for the insurance subsidiaries include primarily premium and investment income. Cash outflowsproceeds from operations include policy benefit payments, commissions, administrative expenses and taxes. The funds to provide for policy benefits, the majority of which are paid in future periods, are invested primarily in long-term fixed maturities as they better match the long-term nature of these obligations. In addition to investment income, maturities and scheduled repayments in the investment portfolio are sources of cash. Excess cash available from the insurance subsidiaries’ operations is generally distributed as a dividend to the parent company, subject to regulatory restriction. 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, due to our high underwriting margins and effective expense control, a significant portion of the excess cash also comes from underwriting income.
Parent Company liquidity. An important source of Parent Company liquidity is the dividends from the insurance subsidiaries noted above. 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. In the first nine months of 2017, the Parent Company received $309 million of cash dividends from subsidiaries, compared with $273 million in 2016. The increase in cash dividends received from subsidiaries was primarily due to the timing of dividend payments. For the full year 2017, cash dividends from subsidiaries are expected to total approximately $452 million.
Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, and a credit facility. At September 30, 2017, the Parent Company had $55 million of invested cash and net intercompany receivables. The credit facility is discussed below.

Credit Facility. We have 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. We 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 credit line for a commercial paper program under which we may issue commercial paper at any time, with total commercial paper outstanding not to exceed the facility maximum, less any letters of credit issued. Interest on the commercial paper program is charged at variable rates. This facility was amended in May 2016 to extend the maturity date of the facility to May 2021. The amendment also allowed for an additional $100 million term loan to be issued under the facility rate structure. The term loan was issued during 2016 and will be repaid in quarterly escalating installments with a balloon payment of $75 million due in May 2021. Interest on the term loan is computedwill be used to retire the 7.875% Senior Notes maturing on May 15, 2023. Refer to Note 11—Debt for a complete analysis and paiddescription of long-term debt issues outstanding.


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monthly at 125 basis points plus 1 month LIBOR. In accordance with the agreement, we are subject to certain covenants regarding capitalization. As of September 30, 2017, we were in full compliance with those covenants.

Commercial paper outstanding and any amortization payments of the term loan due within one year are included in short-term debt. The remaining balance of the term loan is included in long-term debt.
The following table presents certain information about our commercial paper borrowings.
Credit Facility - Commercial Paper
(Dollar amounts in thousands)
  At
  September 30, 
 2017		 December 31, 2016 September 30, 
 2016
Balance of commercial paper at end of period (par value) $305,800
 $262,850
 $266,000
Annualized interest rate 1.44% 0.96% 0.85%
Letters of credit outstanding $177,000
 $177,000
 $177,000
Remaining amount available under credit line 267,200
 310,150
 307,000
  Nine Months Ended 
 September 30,
  2017 2016
Average balance of commercial paper outstanding during period (par value) $336,664
 $297,065
Daily-weighted average interest rate (annualized) 1.24% 0.81%
Maximum daily amount outstanding during period (par value) $455,912
 $412,676
Our balance of commercial paper outstanding at September 30, 2017 was $306 million compared with $263 million at the previous year end. We have had no difficulties in accessing the commercial paper market under this facility during the nine month periods ended September 30, 2017 and 2016.
In summary, Torchmark expects to have readily available fundsFinancing costs for the foreseeable future to conduct its operationscorporate and to maintain target capital ratios inother segment consist primarily of interest on our various debt instruments. The table below presents the insurance subsidiaries through internally generated cash flowcomponents of financing costs and reconciles interest expense per 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 issuanceCondensed Consolidated Statements of debt, an additional short-term credit facility, and intercompany borrowing.Operations.
Consolidated liquidity. Consolidated net cash inflows from continuing operations were $1 billion in the first nine months of 2017, compared with $889 million in the same period of 2016. The increase is primarily attributable to timing of cash disbursements and fluctuations in amounts recorded in other liabilities. In addition to cash inflows from operations, our companies received proceeds from maturities, calls, and repayments of fixed maturities available for sale in the amount of $306 million during the 2017 period. As previously noted under the caption Credit Facility, we have in place a line of credit facility. The insurance companies have no additional outstanding credit facilities.
Cash and short-term investments were $154 million at September 30, 2017, compared with $148 million at December 31, 2016. In addition to these liquid assets, the entire $16.7 billion (fair value at September 30, 2017) portfolio of fixed income securities is available for sale in the event of an unexpected need. Approximately 96% 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 intent to hold any securities which are temporarily impaired until they mature. Our strong cash flows from operations, on-going investment maturities, and credit line availability make any need to sell securities for liquidity highly unlikely.
Capital Resources. Management targets an aggregate capital ratio for its insurance subsidiaries of approximately 325% of Company action level regulatory capital under Risk-Based Capital (RBC), a formula designed by insurance regulatory authorities to monitor the adequacy of capital. The 325% target is considered sufficient for the subsidiaries because of their strong reliable cash flows, the relatively low risk of their product mix, and because that ratio is in line with rating agency expectations for Torchmark. At December 31, 2016, our insurance subsidiaries had an aggregate

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RBC ratio of approximately 324%. Should we experience impairments and/or ratings downgrades within our fixed maturity portfolio in the future, the ratio could fall below targeted levels. In such a case, management believes more than sufficient liquidity exists at the Parent Company to make additional contributions as necessary to maintain the targeted ratio.
On a consolidated basis, Torchmark’s capital structure consists of short-term debt (comprised of the commercial paper outstanding discussed above, current maturities of the term loan, and current maturities of funded debt), long-term debt (comprised of long-term maturities of funded debt and long term maturities of the term loan), and shareholders’ equity.
The outstanding long-term debt at book value was $1.1 billion at September 30, 2017 and December 31, 2016. An analysis of debt issues outstanding is as follows at September 30, 2017.
Selected Information about Debt Issues
atSeptember 30, 2017As of March 31, 2023
(Dollar amounts in thousands)
InstrumentIssue DateMaturity DateCoupon Rate Interest Payment DatesPar
Value		Book
Value		Fair
Value
Senior notes05/27/199305/15/20237.875%semiannual$165,612 $165,574 $164,746 
Senior notes09/27/201809/15/20284.550%semiannual550,000 545,771 546,348 
Senior notes08/21/202008/15/20302.150%semiannual400,000 396,332 323,984 
Senior notes(1)
05/19/202206/15/20324.800%semiannual250,000 245,588 241,275 
Senior notes11/17/201711/17/20575.275% semiannual125,000 123,415 124,265 
Junior subordinated debentures06/14/202106/15/20614.250%quarterly325,000 317,248 248,300 
1,815,612 1,793,928 1,648,918 
Less current maturity of long-term debt165,612 165,574 164,746 
Total long-term debt
1,650,000 1,628,354 1,484,172 
Current maturity of long-term debt165,612 165,574 164,746 
FHLB borrowings45,000 45,000 45,000 
Commercial paper305,000 303,673 303,673 
Total short-term debt
515,612 514,247 513,419 
Total debt
$2,165,612 $2,142,601 $1,997,591 
InstrumentYear
Due		 Interest
Rate		  Par
Value		 Book
Value		 Fair
Value
Notes2023 7.875%
 $165,612
 $164,236
 $198,786
Senior Notes2019 9.250%
 292,647
 291,767
 327,057
Senior Notes(1)
2022 3.800%
 150,000
 148,404
 154,449
Junior Subordinated Debentures2052 5.875%
 125,000
 120,954
 126,700
Junior Subordinated Debentures2036 4.620%
(2) 
 20,000
 20,000
 20,000
Junior Subordinated Debentures2056 6.125%
 300,000
 290,445
 321,240
Term loan(3)
2021 2.489%
(4) 
 98,750
 98,750
 98,750
      1,152,009
 1,134,556
 1,246,982
Less current maturity of term loan(3)
     3,750
 3,750
 3,750
Total long-term debt     1,148,259
 1,130,806
 1,243,232

          
Current maturity of term loan(3)
     3,750
 3,750
 3,750
Commercial paper     305,800
 305,252
 305,252
Total short term debt     309,550
 309,002
 309,002

          
Total debt     $1,457,809
 $1,439,808
 $1,552,234

(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.
(2) Interest paid at 3 month LIBOR plus 330 basis points, resets each quarter.
(3)In April 2023, we closed on a $170 million delayed draw variable rate term loan with an 18-month term. The current amount ofproceeds from the term loan will be used to retire the 7.875% Senior Notes maturing on May 15, 2023. Refer to Note 11—Debt for a complete analysis and description of long-term debt issues outstanding.

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

Analysis of Financing Costs
(Dollar amounts in thousands)
Three Months Ended
March 31,		Increase
(Decrease)
20232022Amount%
Interest on funded debt$20,244 $18,644 $1,600 9 
Interest on short-term debt4,623 1,300 3,323 256 
Financing costs
$24,867 $19,944 $4,923 25 

During the first three months of 2023, financing costs increased 25% compared with the prior year. The increase in financing costs is primarily due to higher short-term interest rates. More information on our debt transactions is disclosed in the Financial Condition section of $3.8 millionthis report.

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GLOBE LIFE INC.
Management's Discussion & Analysis

Subsidiary Capital: The National Association of Insurance Commissioners (NAIC) has established a risk-based factor approach for determining threshold risk-based capital levels for all insurance companies. This approach was designed to assist the regulatory bodies in identifying companies that may require regulatory attention. A Risk-Based Capital (RBC) ratio is classified as short term debt.
(4) Interest paid at 1 month LIBOR plus 125 basis points, resets each month.

On April 5, 2016, Torchmark completedtypically determined by dividing adjusted total statutory capital by the issuance and sale of $300 million aggregate principal amount of Torchmark’s 6.125% Junior Subordinated Debentures due 2056. The Debentures were sold pursuantrisk-based capital determined using the NAIC’s factors. If a company’s RBC ratio approaches two times the RBC amount, the company must file a plan with the NAIC for improving its capital levels (this level is commonly referred to Torchmark’s shelf registration statement on Form S-3, filed September 25, 2015. The net proceeds from the saleas “Company Action Level” RBC). Companies typically hold a multiple of the Debentures were $290Company Action Level RBC depending on their particular business needs and risk profile.

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

In August 2022, the NAIC fully adopted new and expanded C-2 life insurance mortality risk factors. The adoption of these factors resulted in higher amounts of required capital related to our life insurance liabilities. The Parent Company is committed to maintaining the targeted consolidated RBC ratio at its insurance subsidiaries and has sufficient liquidity available to provide additional capital if necessary.

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

Shareholders’ equity was $3.8 billion at March 31, 2023. This compares with $3.9 billion at December 31, 2022 and $2.5 billion at March 31, 2022, as adjusted. During the three months since December 31, 2022, shareholders’ equity decreased primarily due to a $171 million after giving effect todecline in AOCI as interest rates and discount rates have increased over the underwriting discount and estimated expensesperiod. In addition, shareholders' equity increased by net income of the offering of the Debentures. Torchmark used the net proceeds from the offering of the Debentures primarily to repay the $250$224 million outstanding principal amount plus accrued interest of $8 million on its 6.375% Senior Notes that were due June 15, 2016.
As previously noted under the caption Results of Operationsin this report, we acquired 3.2 million of our outstanding common shares under our share repurchase program during the first ninethree months of 2017. These shares were acquired at a cost2023, but was offset by share repurchases of $243$135 million (average of $76.46 per share), compared with purchases of 4.2and an additional $43 million shares at a cost of $240 million (average of $57.58 per share) in share repurchases to offset the first nine months of 2016.
dilution from stock option exercises. On August 28, 2017,February 23, 2023, the Parent Company announced that it had declared a quarterly dividend of 0.15$0.2250 per share. This dividend was paid on NovemberMay 1, 2017.2023.
Shareholders’ equity was $5.2 billion
We plan to use excess cash available at September 30, 2017. This compares with $4.6 billion at December 31, 2016 and $5.1 billion at September 30, 2016. During the nine months since December 31, 2016, shareholders’ equity was

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increased by $442 million of after-tax unrealized gainsParent Company as efficiently as possible in the fixed-maturity portfoliofuture. Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, shareholder dividend payments, investments in securities, or repayment of short-term debt. We will determine the best use of excess cash after ensuring that targeted capital levels are maintained in our insurance subsidiaries. If market conditions are favorable, we currently expect that share repurchases will continue to be a primary use of those funds..

As previously noted, the liability for future policy benefits under ASU 2018-12 is required to be computed using current discount rates with the impact of changes in discount rates included in accumulated other comprehensive income. Additionally, the guidance requires the liability for future policy benefits to be calculated using net premiums rather than gross premiums. Given that gross premiums are considerably higher than net premiums for our business, as interest rates have decreased overseen in Note 6—Policy Liabilities, the period. In addition,measurement of the liability is higher than what it would be had it been computed using gross premiums. This is an important consideration when analyzing shareholders' equity was increased by net income of $427 million. Share purchases of $243 million noted above during the period reduced shareholders’ equity.
We are
Globe Life is required byunder GAAP to revalue ourits 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 requires Fluctuations in interest rates cause undue volatility in the period-to-period presentation of our fixed maturity assetsshareholders’ equity, capital structure, and financial ratios. Due to be revalued, it does not permit interest-bearing insurance policy liabilities supported by those assets to be valued at fair value in a consistent manner, with changes in value applied directly to shareholders’ equity. However, due to the size of both the investment portfolio and our policy liabilities, this inconsistency in measurement can have a material impact on shareholders’ equity. Because of 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 Torchmark’sour balance sheet, capital structure, and financial ratiosratios.
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GLOBE LIFE INC.
Management's Discussion & Analysis

CRITICAL ACCOUNTING POLICIES

The following critical accounting policies were updated since the 2022 Form 10-K due to the adoption of ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12). Additional information on our accounting policies is disclosed in order to provide a more consistentNote 1—Significant Accounting Policies.

Future Policy Benefits. The liability for future policy benefits for traditional and meaningful portrayallimited-payment long duration life and health products comprises approximately 91% of the Company’s financial positiontotal liability for future policy benefits. The liability is determined each reporting period based on the net level premium method. This method requires the liability for future policy benefits to be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders. Net level premiums reflect a recomputed net premium ratio using actual experience since the issue date or the Transition Date, and expected future experience. The liability is accrued as premium revenue is recognized and adjusted for differences between actual and expected experience. Long-duration insurance contracts issued by the Company are grouped into cohorts based on the contract issue year, distribution channel, legal entity and product type.

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

The liability for future policy benefits is discounted using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. The discount rate assumption is updated each reporting period with the effect of the changes in the liability included in Other Comprehensive Income (OCI). The methodology for determining current discount rates consists of constructing a discount rate curve intended to period.be reflective of the currency and tenor of the insurance liability cash flows. The methodology is designed to prioritize observable inputs based on market data available in the local debt markets denominated in the same currency as the policies. For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company will use estimation techniques consistent with the fair value guidance in ASC 820. We further accrete interest as a component of policyholder benefits using the original discount rate that is locked-in during the year of contract issuance. The original discount rates (or the locked-in discount rates) are used for interest accretion purposes and for the determination of net premiums, whereas the current discount rates are used for purposes of valuing the liability.

The discount rate assumption is key in determining the change in the value of the liability for future benefits for long duration life and health contracts. Since the liability for future policy benefits for traditional and limited-payment long duration life and health products comprises approximately 91% of the total liability for future policy benefits, it is subject to interest rate risk. A decrease in discount rates will cause an increase in the obligation, and changes in assumptions may cause significant differences in results.


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GLOBE LIFE INC.
Management's Discussion & Analysis

The following table presents selected data related to capital resources. Additionally,illustrates the interest rate risk sensitivity of our liability for future policy benefits as of March 31, 2023 and 2022. This table presentsmeasures the effect of a parallel shift in discount rates on the GAAP requirement to revalue our fixed maturity assets on relevant items so that investorsliability. The data measures the change in reported value arising from an immediate change in rates in increments of 50 and other financial statement users may determine its impact on our capital structure.100 basis points, which would be recorded as a component of OCI.
Selected Financial Data
Value of Liability for Future Policy Benefits
(Dollar amounts in thousands, except per share data)thousands)

At
 September 30, 2017 December 31, 2016 September 30, 2016

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 maturities$16,652,913
 $1,738,333
 $15,245,861
 $1,057,811
 $15,837,700
 $1,893,233
Deferred acquisition costs(2)
3,911,800
 (11,273) 3,783,158
 (10,281) 3,739,526
 (12,698)
Total assets22,993,607
 1,727,060
 21,436,087
 1,047,530
 22,077,031
 1,880,535
Short-term debt309,002
 —
 264,475
 —
 266,892
 —
Long-term debt1,130,806
 —
 1,133,165
 —
 1,133,544
 —
Shareholders' equity5,167,685
 1,122,589
 4,566,861
 680,894
 5,086,383
 1,222,348
            
Book value per diluted share43.78
 9.51
 37.76
 5.63
 41.94
 10.08
Debt to capitalization(3)
21.8% (4.5)% 23.4% (3.1)% 21.6% (5.0)%
            
Diluted shares outstanding118,028
   120,958
   121,271
  
Actual shares outstanding115,359
   118,031
   118,895
  
At March 31,
Change in Discount Rates(1)
20232022
(200)$27,736,576 $32,550,308 
(100)22,630,750 26,314,589 
(50)20,624,391 23,859,913 
018,896,574 21,745,905 
5017,399,322 19,915,180 
10016,094,213 18,321,425 
20013,942,344 15,701,262 
(1) Amount addedIn basis points.

Deferred Acquisition Costs.Certain costs of acquiring new insurance business are deferred and recorded as an asset. These costs are capitalized on a grouped contract basis and amortized over the expected term of the related contracts, and are essential for the acquisition of new insurance business. Deferred acquisition costs (DAC) are directly related to (deducted from) comprehensive incomethe successful issuance of an insurance contract, and primarily include sales commissions, policy issue costs, Direct to produce the stated GAAP item, per accounting rule ASC 320-10-35-1.
(2) IncludesConsumer advertising costs, and underwriting costs. Additionally, DAC includes the value of business acquired (VOBA), which are the costs of acquiring blocks of insurance purchased.
(3) Torchmark’s debt covenants requirefrom other companies or through the acquisition of other companies. These costs represent the difference between the fair value of the contractual insurance assets acquired and liabilities assumed, compared against the assets and liabilities for insurance contracts that the Company issues or holds measured in accordance with GAAP.

DAC is amortized on a constant-level basis over the expected term of the grouped contracts, with the related expense included in amortization of deferred acquisition costs on the Condensed Consolidated Statements of Operations. The in-force metric used to compute the DAC amortization rate is annualized premium in force. The assumptions used to amortize acquisition costs include mortality, morbidity, and persistency. These assumptions will be reviewed at least annually and revised in conjunction with any change in the future policy benefit assumptions. The effect of this accounting rulechanges in the assumptions will be removedrecognized over the remaining expected contract term as a revision of future amortization amounts.

VOBA is amortized on a basis that is consistent with DAC, as described above, and is subject to periodic recoverability and loss recognition testing to determine this ratio. This ratioif there is computeda premium deficiency. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized VOBA asset. These cash flows consist primarily of premium income, less benefits and expenses. The present value of these cash flows, less the reserve liability, is then compared with the unamortized balance. In the event the estimated present value of net cash flows is less, the deficiency would be recognized by dividing total debt by the suma charge to earnings and either a reduction of total debt and shareholders’ equity.

Interest coverage was 10.8 timesunamortized acquisition costs or an increase in the first nine month of 2017, compared with 10.5 times in the 2016 period. Interest coverage is computed by dividing interest expense into the sum of pretax income and interest expense.

liability for future benefits.
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Cautionary Statements
We caution readers regarding certain forward-looking statements contained in the previous discussion and elsewhere in this document, and in any other statements made by, or on behalf of Torchmark 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 Torchmark 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. If these estimates or assumptions prove to be incorrect, the actual results of Torchmark 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 Torchmark specifically. Such events or developments could include, but are not necessarily limited to:
1)Economic and other conditions 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 Torchmark’s assumptions;
2)Regulatory developments, including changes in 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 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 pricing competition;
7)Litigation results;
8)Levels of administrative and operational efficiencies that differ from our assumptions;
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 financial statements which are based on management’s estimates and judgments which may differ from the actual amounts ultimately realized; and
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.


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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 ninethree months ended September 30, 2017.March 31, 2023.

Item 4. Controls and Procedures
Torchmark,
Evaluation of Disclosure Controls and Procedures: Globe Life Inc., under the direction of the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, has established disclosure controls and procedures that are designed to ensure that information required to be disclosed by TorchmarkGlobe 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 Torchmark’sGlobe Life's management, including the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
As of the end of the fiscal quarter completed September 30, 2017,March 31, 2023, an evaluation was performed under the supervision and with the participation of TorchmarkGlobe Life management, including the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer, of Torchmark’sthe disclosure controls and procedures (as those terms are defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon their evaluation, the Co-Chairmen and Chief Executive Officers and the Executive Vice President and Chief Financial Officer have concluded that Torchmark’s disclosure controls and procedures are effective as of the date of this Form 10-Q. In compliance with Section 302 of the Sarbanes-OxleySarbanes Oxley Act of 2002 (18 U.S.C. §1350)§ 1350), each of these officers executed a Certification included as an exhibit to this Form 10-Q.
For
Changes in Internal Control over Financial Reporting: During the quarterperiod ended September 30, 2017,March 31, 2023 and in connection with the adoption of ASU 2018-12, the Company implemented additional processes and controls related to the accounting and disclosure of contracts impacted by the new standard for long duration life and health products and the other insurance liabilities. See Note 2—New Accounting Standards, Note 6—Policy Liabilities, and Note 7—DACof the financial statements for additional information on the impacts of the adoption.

Otherwise, there have not been any changes in Torchmark’sto Globe Life Inc.'s internal control over financial reporting, or in other factors that could significantly affect thisthe internal control over financial reporting subsequent to the date of their evaluation, which have materially affected, or are reasonably likely to materially affect, Torchmark’s internal control over financial reporting. No material weaknesses in such internal controls were identified in the evaluation and as a consequence, no corrective action was required to be taken.

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Part II – II—Other Information

Item 1. Legal Proceedings


Torchmark and its subsidiaries, in common with the insurance industry in general, are subject to litigation, including claims involving tax matters, alleged breaches of contract, torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of agents of Torchmark’s 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 Torchmark and its subsidiaries, management does not believe that such litigation will have a material adverse effect on Torchmark’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. Torchmark’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 Torchmark and its subsidiaries have substantial business, creating the potential for unpredictable material adverse judgments in any given punitive damage suit.

See further discussion ofDiscussion regarding litigation and unclaimed property audits is provided in Note 6—5—Commitments and Contingencies.


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Item 1A. Risk Factors
Torchmark
The Company had no material changes to its risk factors.


Item 2. Changes inUnregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity Securities

(c)    Purchases of Certain Equity Securities by the Issuer and Others for the First Quarter of 2023
Period
(a) Total Number
of Shares
Purchased
(b) Average
Price Paid
Per Share
(c) Total Number of
Shares Purchased as 
Part of Publicly Announced
Plans or Programs
(d) Maximum Number
of Shares (or
Approximate Dollar
Amount) that May
Yet Be Purchased
Under the Plans or
Programs
January 1-31, 2023305,961 $119.84 305,961 
February 1-28, 2023329,554 120.94 329,554 
March 1-31, 2023908,522 111.78 908,522 

Period 
(a) Total Number
of Shares
Purchased
 
(b) Average
Price Paid
Per Share
 
(c) Total Number of
Shares Purchased as Part
of Publicly Announced
Plans or Programs
 
(d) Maximum Number
of Shares (or
Approximate Dollar
Amount) that May
Yet Be Purchased
Under the Plans or
Programs
July 1-31, 2017 148,621
 $78.04
 148,621
  
August 1-31, 2017 775,262
 77.79
 775,262
  
September 1-30, 2017 337,147
 76.48
 337,147
  
At its On August 7, 2017meeting,10, 2022, the Globe Life Board of Directors reaffirmed its continued authorization of the Company’s shareCompany's stock repurchase program in amounts and with timing that management, in consultation with the Board, determinesdetermined 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
(a)Exhibits
(31.1)Exhibit No.Description
3.1
10.1
10.2
31.1
(31.2)31.2
(31.3)
Rule 13a-14(a)/15d-14(a) Certification by Frank M. Svoboda
(32.1)31.3
32.1
(101)101.INSXBRL Instance Document- the instance document does not appear in the Interactive Data Files forfile because the Torchmark Corporation Form 10-Q forXBRL tags are embedded within the period ended September 30, 2017Inline 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).

*    Compensatory plan or arrangement.

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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.
TORCHMARK CORPORATION
Date: May 9, 2023/s/ J. Matthew Darden
Date: November 7, 2017/s/ Gary L. ColemanJ. Matthew Darden
Gary L. Coleman
Co-Chairman and Chief Executive Officer
Date: November 7, 2017May 9, 2023/s/ LarryFrank M. HutchisonSvoboda
LarryFrank M. HutchisonSvoboda
Co-Chairman and Chief Executive Officer
Date: November 7, 2017May 9, 2023/s/ Frank M. SvobodaThomas P. Kalmbach
Frank M. SvobodaThomas P. Kalmbach
Executive Vice President and Chief Financial Officer


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