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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ________
Commission File Number: 001-08052
GLOBE LIFE INC.
(Exact name of registrant as specified in its charter) | | | | | | | | |
Delaware | | 63-0780404 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
3700 South Stonebridge Drive, McKinney, Texas 75070
(Address of principal executive offices) (Zip Code)
(972) 569-4000
(Registrant’s telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $1.00 par value per share | GL | New York Stock Exchange |
4.250% Junior Subordinated Debentures | GL PRD | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | |
Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |
Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| | | | | | | | |
Class | | Outstanding at October 31, 2024 |
Common Stock, $1.00 Par Value | | 83,945,064 |
Globe Life Inc.
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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.
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Globe Life Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollar amounts in thousands, except per share data)
| | | | | | | | | | | |
| |
| September 30, 2024 | | December 31, 2023 |
Assets: | | | |
Investments: | | | |
Fixed maturities—available for sale, at fair value (amortized cost: 2024—$19,084,454; 2023—$18,924,914, allowance for credit losses: 2024— $7,132; 2023— $7,115) | $ | 18,334,570 | | | $ | 17,870,206 | |
Mortgage loans | 381,315 | | | 279,199 | |
Policy loans | 691,072 | | | 657,020 | |
Other long-term investments (includes: 2024—$979,397; 2023—$795,583 under the fair value option) | 1,221,888 | | | 835,878 | |
Short-term investments | 100,501 | | | 81,740 | |
Total investments | 20,729,346 | | | 19,724,043 | |
Cash | 134,549 | | | 103,156 | |
Accrued investment income | 284,952 | | | 270,396 | |
Other receivables | 651,871 | | | 630,223 | |
Deferred acquisition costs | 6,386,682 | | | 6,009,477 | |
Goodwill | 490,446 | | | 481,791 | |
Other assets | 878,974 | | | 832,413 | |
Total assets | $ | 29,556,820 | | | $ | 28,051,499 | |
Liabilities: | | | |
Future policy benefits at current discount rates: (at original discount rates: 2024—$17,402,917; 2023—$16,984,615) | $ | 19,814,913 | | | $ | 19,460,353 | |
Unearned and advance premium | 264,644 | | | 254,567 | |
Policy claims and other benefits payable | 530,399 | | | 514,875 | |
Other policyholders' funds | 469,288 | | | 236,958 | |
Total policy liabilities | 21,079,244 | | | 20,466,753 | |
Current and deferred income taxes | 619,970 | | | 494,639 | |
Short-term debt | 437,418 | | | 486,113 | |
Long-term debt (estimated fair value: 2024—$2,202,644; 2023—$1,491,229) | 2,323,676 | | | 1,629,559 | |
Other liabilities | 457,887 | | | 487,632 | |
Total liabilities | 24,918,195 | | | 23,564,696 | |
Commitments and Contingencies (Note 5) | | | |
Shareholders' equity: | | | |
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2024 and 2023 | — | | | — | |
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2024—102,218,183 issued; 2023—102,218,183 issued) | 102,218 | | | 102,218 | |
Additional paid-in-capital | 543,255 | | | 532,474 | |
Accumulated other comprehensive income (loss) | (2,484,743) | | | (2,772,419) | |
Retained earnings | 8,225,030 | | | 7,478,813 | |
Treasury stock, at cost: (2024—17,942,902 shares; 2023—8,426,854 shares) | (1,747,135) | | | (854,283) | |
Total shareholders' equity | 4,638,625 | | | 4,486,803 | |
Total liabilities and shareholders' equity | $ | 29,556,820 | | | $ | 28,051,499 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollar amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
Revenue: | | | | | | | |
Life premium | $ | 818,638 | | | $ | 788,099 | | | $ | 2,438,385 | | | $ | 2,342,429 | |
Health premium | 353,955 | | | 331,236 | | | 1,046,617 | | | 982,916 | |
Other premium | — | | | — | | | — | | | — | |
Total premium | 1,172,593 | | | 1,119,335 | | | 3,485,002 | | | 3,325,345 | |
Net investment income | 284,964 | | | 266,926 | | | 853,178 | | | 785,275 | |
Realized gains (losses) | (2,192) | | | (2,193) | | | (26,580) | | | (78,963) | |
| | | | | | | |
Other income | 42 | | | 50 | | | 192 | | | 185 | |
Total revenue | 1,455,407 | | | 1,384,118 | | | 4,311,792 | | | 4,031,842 | |
| | | | | | | |
Benefits and expenses: | | | | | | | |
Life policyholder benefits(1) | 454,502 | | | 515,676 | | | 1,493,165 | | | 1,536,317 | |
Health policyholder benefits(2) | 221,926 | | | 193,790 | | | 629,676 | | | 580,676 | |
Other policyholder benefits | 11,756 | | | 9,578 | | | 32,830 | | | 27,488 | |
Total policyholder benefits | 688,184 | | | 719,044 | | | 2,155,671 | | | 2,144,481 | |
| | | | | | | |
Amortization of deferred acquisition costs | 104,310 | | | 95,757 | | | 305,703 | | | 282,159 | |
Commissions, premium taxes, and non-deferred acquisition costs | 149,693 | | | 138,677 | | | 447,605 | | | 414,933 | |
Other operating expense | 104,874 | | | 85,870 | | | 297,196 | | | 256,074 | |
Interest expense | 31,388 | | | 25,955 | | | 91,413 | | | 76,640 | |
Total benefits and expenses | 1,078,449 | | | 1,065,303 | | | 3,297,588 | | | 3,174,287 | |
| | | | | | | |
Income before income taxes | 376,958 | | | 318,815 | | | 1,014,204 | | | 857,555 | |
Income tax benefit (expense) | (73,964) | | | (61,732) | | | (198,638) | | | (161,602) | |
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Net income | $ | 302,994 | | | $ | 257,083 | | | $ | 815,566 | | | $ | 695,953 | |
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Basic net income per common share | $ | 3.45 | | | $ | 2.72 | | | $ | 8.96 | | | $ | 7.29 | |
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Diluted net income per common share | $ | 3.44 | | | $ | 2.68 | | | $ | 8.93 | | | $ | 7.20 | |
(1) Net of total remeasurement including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a gain of $70.6 million for the three months ended September 30, 2024, and a total remeasurement gain of $11.3 million for the same period in 2023. Net of a total remeasurement gain of $87.8 million for the nine months ended September 30, 2024, and a total remeasurement gain of $16.5 million for the same period in 2023.
(2) Net of total remeasurement including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a loss of $9.6 million for the three months ended September 30, 2024 and a total remeasurement gain of $7.8 million for the same period in 2023. Net of a total remeasurement loss of $3.1 million for the nine months ended September 30, 2024, and a total remeasurement gain of $8.3 million for the same period in 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(Dollar amounts in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
Net income | $ | 302,994 | | | $ | 257,083 | | | $ | 815,566 | | | $ | 695,953 | |
| | | | | | | |
Other comprehensive income (loss): | | | | | | | |
| | | | | | | |
Investments: | | | | | | | |
Unrealized gains (losses) on fixed maturities: | | | | | | | |
Unrealized holding gains (losses) arising during period | 869,743 | | | (1,068,091) | | | 301,715 | | | (932,301) | |
| | | | | | | |
Other reclassification adjustments included in net income | (2,408) | | | 851 | | | 2,580 | | | 82,866 | |
Foreign exchange adjustment on fixed maturities recorded at fair value | (954) | | | 1,603 | | | 546 | | | 603 | |
| | | | | | | |
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Total unrealized investment gains (losses) | 866,381 | | | (1,065,637) | | | 304,841 | | | (848,832) | |
Less applicable tax (expense) benefit | (181,941) | | | 223,782 | | | (64,018) | | | 178,250 | |
Unrealized gains (losses) on investments, net of tax | 684,440 | | | (841,855) | | | 240,823 | | | (670,582) | |
| | | | | | | |
Future Policy Benefits: | | | | | | | |
Change in discount rate on future policy benefits | (1,247,366) | | | 1,687,310 | | | 63,614 | | | 1,272,631 | |
Less applicable tax (expense) benefit | 261,946 | | | (354,334) | | | (13,360) | | | (267,252) | |
Future policy benefit adjustments, net of tax | (985,420) | | | 1,332,976 | | | 50,254 | | | 1,005,379 | |
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Foreign exchange translation: | | | | | | | |
Foreign exchange translation adjustments, other than securities | 7,296 | | | (7,881) | | | (4,660) | | | (4,039) | |
Less applicable tax (expense) benefit | (1,532) | | | 1,655 | | | 979 | | | 847 | |
Foreign exchange translation adjustments, other than securities, net of tax | 5,764 | | | (6,226) | | | (3,681) | | | (3,192) | |
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Pension: | | | | | | | |
| | | | | | | |
| | | | | | | |
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Pension adjustments | 118 | | | 35 | | | 354 | | | (336) | |
Less applicable tax (expense) benefit | (25) | | | (7) | | | (74) | | | 70 | |
Pension adjustments, net of tax | 93 | | | 28 | | | 280 | | | (266) | |
| | | | | | | |
Other comprehensive income (loss) | (295,123) | | | 484,923 | | | 287,676 | | | 331,339 | |
Comprehensive income (loss) | $ | 7,871 | | | $ | 742,006 | | | $ | 1,103,242 | | | $ | 1,027,292 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
(Dollar amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings | | Treasury Stock | | Total Shareholders' Equity |
Balance at December 31, 2023 | $ | — | | | $ | 102,218 | | | $ | 532,474 | | | $ | (2,772,419) | | | $ | 7,478,813 | | | $ | (854,283) | | | $ | 4,486,803 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Comprehensive income (loss) | — | | | — | | | — | | | 305,183 | | | 254,217 | | | — | | | 559,400 | |
Common dividends declared ($0.2400 per share) | — | | | — | | | — | | | — | | | (22,603) | | | — | | | (22,603) | |
Acquisition of treasury stock | — | | | — | | | — | | | — | | | — | | | (23,469) | | | (23,469) | |
Stock-based compensation | — | | | — | | | (5,612) | | | — | | | (438) | | | 15,317 | | | 9,267 | |
Exercise of stock options | — | | | — | | | — | | | — | | | (3,334) | | | 33,097 | | | 29,763 | |
| | | | | | | | | | | | | |
Balance at March 31, 2024 | — | | | 102,218 | | | 526,862 | | | (2,467,236) | | | 7,706,655 | | | (829,338) | | | 5,039,161 | |
| | | | | | | | | | | | | |
Comprehensive income (loss) | — | | | — | | | — | | | 277,616 | | | 258,355 | | | — | | | 535,971 | |
Common dividends declared ($0.2400 per share) | — | | | — | | | — | | | — | | | (21,595) | | | — | | | (21,595) | |
Acquisition of treasury stock | — | | | — | | | — | | | — | | | — | | | (335,873) | | | (335,873) | |
Stock-based compensation | — | | | — | | | 7,166 | | | — | | | — | | | 2,924 | | | 10,090 | |
Exercise of stock options | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | |
Balance at June 30, 2024 | — | | | 102,218 | | | 534,028 | | | (2,189,620) | | | 7,943,415 | | | (1,162,287) | | | 5,227,754 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
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Comprehensive income (loss) | — | | | — | | | — | | | (295,123) | | | 302,994 | | | — | | | 7,871 | |
Common dividends declared ($0.2400 per share) | — | | | — | | | — | | | — | | | (20,215) | | | — | | | (20,215) | |
Acquisition of treasury stock | — | | | — | | | — | | | — | | | — | | | (591,106) | | | (591,106) | |
Stock-based compensation | — | | | — | | | 9,227 | | | — | | | — | | | 6 | | | 9,233 | |
Exercise of stock options | — | | | — | | | — | | | — | | | (1,164) | | | 6,252 | | | 5,088 | |
| | | | | | | | | | | | | |
Balance at September 30, 2024 | $ | — | | | $ | 102,218 | | | $ | 543,255 | | | $ | (2,484,743) | | | $ | 8,225,030 | | | $ | (1,747,135) | | | $ | 4,638,625 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Condensed Consolidated Statements of Shareholders' Equity (Continued)
(Unaudited)
(Dollar amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Preferred Stock | | Common Stock | | Additional Paid-In Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings | | Treasury Stock | | Total Shareholders' Equity |
| | | | | | | | | | | | | |
Balance at December 31, 2022 | $ | — | | | $ | 105,218 | | | $ | 529,661 | | | $ | (2,790,313) | | | $ | 6,894,535 | | | $ | (789,524) | | | $ | 3,949,577 | |
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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 | |
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Balance at March 31, 2023 | — | | | 105,218 | | | 528,639 | | | (2,961,093) | | | 7,092,544 | | | (919,017) | | | 3,846,291 | |
| | | | | | | | | | | | | |
Comprehensive income (loss) | — | | | — | | | — | | | 17,196 | | | 215,260 | | | — | | | 232,456 | |
Common dividends declared ($0.2250 per share) | — | | | — | | | — | | | — | | | (21,330) | | | — | | | (21,330) | |
Acquisition of treasury stock | — | | | — | | | — | | | — | | | — | | | (89,755) | | | (89,755) | |
Stock-based compensation | — | | | — | | | 7,487 | | | — | | | — | | | — | | | 7,487 | |
Exercise of stock options | — | | | — | | | — | | | — | | | (665) | | | 5,822 | | | 5,157 | |
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Balance at June 30, 2023 | — | | | 105,218 | | | 536,126 | | | (2,943,897) | | | 7,285,809 | | | (1,002,950) | | | 3,980,306 | |
| | | | | | | | | | | | | |
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Comprehensive income (loss) | — | | | — | | | — | | | 484,923 | | | 257,083 | | | — | | | 742,006 | |
Common dividends declared ($0.2250 per share) | — | | | — | | | — | | | — | | | (21,181) | | | — | | | (21,181) | |
Acquisition of treasury stock | — | | | — | | | — | | | — | | | — | | | (96,898) | | | (96,898) | |
Stock-based compensation | — | | | — | | | 7,567 | | | — | | | — | | | — | | | 7,567 | |
Exercise of stock options | — | | | — | | | — | | | — | | | (1,818) | | | 13,149 | | | 11,331 | |
| | | | | | | | | | | | | |
Balance at September 30, 2023 | $ | — | | | $ | 105,218 | | | $ | 543,693 | | | $ | (2,458,974) | | | $ | 7,519,893 | | | $ | (1,086,699) | | | $ | 4,623,131 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollar amounts in thousands) | | | | | | | | | | | |
| | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 |
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Cash provided from (used for) operating activities | $ | 1,065,513 | | | $ | 1,091,028 | |
| | | |
Cash provided from (used for) investing activities: | | | |
Investments sold or matured: | | | |
Fixed maturities available for sale—sold | 674,125 | | | 192,007 | |
Fixed maturities available for sale—matured or other redemptions | 161,275 | | | 212,936 | |
Mortgage loans | 29,433 | | | 32,164 | |
Other long-term investments | 29,995 | | | 100,999 | |
Total investments sold or matured | 894,828 | | | 538,106 | |
Acquisition of investments: | | | |
Fixed maturities—available for sale | (1,000,665) | | | (1,076,699) | |
Mortgage loans | (134,667) | | | (95,995) | |
Other long-term investments | (445,776) | | | (103,098) | |
Total investments acquired | (1,581,108) | | | (1,275,792) | |
Net (increase) decrease in policy loans | (34,052) | | | (29,687) | |
Net (increase) decrease in short-term investments | (18,761) | | | 30,187 | |
| | | |
| | | |
Additions to property and equipment | (56,047) | | | (36,449) | |
Other investing activities | 96 | | | — | |
Investments in low-income housing interests | (27,840) | | | (54,337) | |
Cash provided from (used for) investing activities | (822,884) | | | (827,972) | |
| | | |
Cash provided from (used for) financing activities: | | | |
Issuance of common stock | 34,851 | | | 61,079 | |
Cash dividends paid to shareholders | (65,292) | | | (62,945) | |
Repayment of debt | — | | | (165,612) | |
Proceeds from issuance of debt | 530,000 | | | 170,000 | |
Payment for debt issuance costs | (7,138) | | | (757) | |
Net borrowing from Federal Home Loan Bank (FHLB) | 17,000 | | | 198,000 | |
Net borrowing (repayment) of commercial paper | 31,443 | | | (34,066) | |
Proceeds from commercial paper with original maturities greater than 90 days | 387,247 | | | — | |
Repayment of commercial paper with original maturities greater than 90 days | (314,836) | | | — | |
Acquisition of treasury stock | (950,448) | | | (365,929) | |
Net receipts (payments) from deposit-type products | 122,291 | | | (69,526) | |
Cash provided from (used for) financing activities | (214,882) | | | (269,756) | |
| | | |
Effect of foreign exchange rate changes on cash | 3,646 | | | (313) | |
Net increase (decrease) in cash | 31,393 | | | (7,013) | |
Cash at beginning of year | 103,156 | | | 92,559 | |
Cash at end of period | $ | 134,549 | | | $ | 85,546 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 1—Significant Accounting Policies
Business: (Globe Life), (the Company), refers to Globe Life Inc., an insurance holding company incorporated in Delaware in 1979, and Globe Life Inc. subsidiaries and affiliates. Globe Life Inc.'s direct or indirect primary subsidiaries are Globe Life And Accident Insurance Company, American Income Life Insurance Company, Liberty National Life Insurance Company, Family Heritage Life Insurance Company of America, and United American Insurance Company. The underwriting companies are owned by their ultimate corporate parent, Globe Life Inc. (Parent Company).
Globe Life provides a variety of life and supplemental health insurance products and annuities to a broad base of customers. The Company is organized into four reportable segments: life insurance, supplemental health insurance, annuities, and investments.
Globe Life markets its insurance products through a number of distribution channels, each of which sells the products of one or more of Globe Life's insurance segments. Our distribution channels consist of the following exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National) and Family Heritage Division (Family Heritage); an independent agency, United American Division (United American); and our Direct to Consumer Division (DTC).