Business Segments (Tables)

6 Months Ended

Jun. 30, 2019

The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items:



	Three Months Ended June 30, 2019
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments					Consolidated
Revenue:
Premium	$	631,201		$	266,282		$	1		$	—		$	—		$	—				$	897,484
Net investment income	—			—			—			227,425			—			—					227,425
Other income	—			—			—			—			398			—					398
Total revenue	631,201			266,282			1			227,425			398			—					1,125,307
Expenses:
Policy benefits	410,961			170,511			7,890			—			—			—					589,362
Required interest on reserves	(165,513		)	(21,680		)	(10,888		)	198,081			—			—					—
Required interest on DAC	50,298			6,341			127			(56,766		)	—			—					—
Amortization of acquisition costs	110,319			27,343			503			—			—			—					138,165
Commissions, premium taxes, and non-deferred acquisition costs	50,086			23,608			4			—			—			—					73,698
Insurance administrative expense⁽¹⁾	—			—			—			—			59,416			5,500			(2	)	64,916
Parent expense	—			—			—			—			2,872			—					2,872
Stock-based compensation expense	—			—			—			—			11,256			—					11,256
Interest expense	—			—			—			21,432			—			—					21,432
Total expenses	456,151			206,123			(2,364		)	162,747			73,544			5,500					901,701
Subtotal	175,050			60,159			2,365			64,678			(73,146		)	(5,500		)			223,606
Non-operating items	—			—			—			—			—			5,500			(2	)	5,500
Measure of segment profitability (pretax)	$	175,050		$	60,159		$	2,365		$	64,678		$	(73,146	)	$	—				229,106

Realized gain (loss)—investments																					5,154
Legal proceedings																					(5,500		)
Income before income taxes per Condensed Consolidated Statements of Operations																					$	228,760


(1)	Administrative expense is not allocated to insurance segments.


(2)	Legal proceedings—See Note 5 for further discussion.



	Three Months Ended June 30, 2018
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	602,534		$	251,440		$	5		$	—		$	—		$	—			$	853,979
Net investment income	—			—			—			218,568			—			—				218,568
Other income	—			—			—			—			441			(25		)	(2)	416
Total revenue	602,534			251,440			5			218,568			441			(25		)		1,072,963
Expenses:
Policy benefits	399,334			160,461			8,582			—			—			—				568,377
Required interest on reserves	(158,101		)	(20,726		)	(11,885		)	190,712			—			—				—
Required interest on DAC	48,275			6,079			150			(54,504		)	—			—				—
Amortization of acquisition costs	104,599			23,892			586			—			—			—				129,077
Commissions, premium taxes, and non-deferred acquisition costs	47,250			22,196			6			—			—			(25		)	(2)	69,427
Insurance administrative expense⁽¹⁾	—			—			—			—			55,276			—				55,276
Parent expense	—			—			—			—			2,847			—				2,847
Stock-based compensation expense	—			—			—			—			10,497			—				10,497
Interest expense	—			—			—			22,411			—			—				22,411
Total expenses	441,357			191,902			(2,561		)	158,619			68,620			(25		)		857,912
Subtotal	161,177			59,538			2,566			59,949			(68,179		)	—				215,051
Non-operating items	—			—			—			—			—			—				—
Measure of segment profitability (pretax)	$	161,177		$	59,538		$	2,566		$	59,949		$	(68,179	)	$	—			215,051

Realized gain (loss)—investments																				11,813
Income before income taxes per Condensed Consolidated Statements of Operations																				$	226,864


(1)	Administrative expense is not allocated to insurance segments.

(2)

Elimination of intersegment commission.



	Six Months Ended June 30, 2019
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	1,255,490		$	532,966		$	1		$	—		$	—		$	—			$	1,788,457
Net investment income	—			—			—			454,098			—			—				454,098
Other income	—			—			—			—			639			—				639
Total revenue	1,255,490			532,966			1			454,098			639			—				2,243,194
Expenses:
Policy benefits	820,653			340,528			15,938			—			—			—				1,177,119
Required interest on reserves	(329,175		)	(43,176		)	(22,008		)	394,359			—			—				—
Required interest on DAC	100,322			12,624			258			(113,204		)	—			—				—
Amortization of acquisition costs	218,609			54,357			1,021			—			—			—				273,987
Commissions, premium taxes, and non-deferred acquisition costs	100,192			46,960			11			—			—			—				147,163
Insurance administrative expense⁽¹⁾	—			—			—			—			118,607			5,900			(2,3)	124,507
Parent expense	—			—			—			—			5,515			—				5,515
Stock-based compensation expense	—			—			—			—			21,815			—				21,815
Interest expense	—			—			—			42,710			—			—				42,710
Total expenses	910,601			411,293			(4,780		)	323,865			145,937			5,900				1,792,816
Subtotal	344,889			121,673			4,781			130,233			(145,298		)	(5,900		)		450,378
Non-operating items	—			—			—			—			—			5,900			(2,3)	5,900
Measure of segment profitability (pretax)	$	344,889		$	121,673		$	4,781		$	130,233		$	(145,298	)	$	—			456,278

Realized gain (loss)—investments																				6,483
Administrative settlements																				(400		)
Legal proceedings																				(5,500		)
Income before income taxes per Condensed Consolidated Statements of Operations																				$	456,861


(1)	Administrative expense is not allocated to insurance segments.


(2)	During the first quarter of 2019, Globe Life recorded $400 thousand in administrative settlements related to state regulatory examinations.


(3)	Legal proceedings—See Note 5 for further discussion.



	Six Months Ended June 30, 2018
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	1,200,837		$	503,238		$	10		$	—		$	—		$	—			$	1,704,085
Net investment income	—			—			—			436,652			—			—				436,652
Other income	—			—			—			—			764			(53		)	(2)	711
Total revenue	1,200,837			503,238			10			436,652			764			(53		)		2,141,448
Expenses:
Policy benefits	799,915			321,080			17,271			—			—			—				1,138,266
Required interest on reserves	(314,315		)	(41,130		)	(23,902		)	379,347			—			—				—
Required interest on DAC	96,219			12,092			303			(108,614		)	—			—				—
Amortization of acquisition costs	208,376			49,149			1,172			—			—			—				258,697
Commissions, premium taxes, and non-deferred acquisition costs	94,644			44,461			14			—			—			(53		)	(2)	139,066
Insurance administrative expense⁽¹⁾	—			—			—			—			110,748			—				110,748
Parent expense	—			—			—			—			5,139			—				5,139
Stock-based compensation expense	—			—			—			—			19,557			—				19,557
Interest expense	—			—			—			44,033			—			—				44,033
Total expenses	884,839			385,652			(5,142		)	314,766			135,444			(53		)		1,715,506
Subtotal	315,998			117,586			5,152			121,886			(134,680		)	—				425,942
Non-operating items	—			—			—			—			—			—				—
Measure of segment profitability (pretax)	$	315,998		$	117,586		$	5,152		$	121,886		$	(134,680	)	$	—			425,942

Realized gain (loss)—investments																				13,764
Income before income taxes per Condensed Consolidated Statements of Operations																				$	439,706


(1)	Administrative expense is not allocated to insurance segments.

(2)

Elimination of intersegment commission.