Business Segments (Tables)

9 Months Ended

Sep. 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 September 30, 2019
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments		Consolidated
Revenue:
Premium	$	630,824		$	269,166		$	3		$	—		$	—		$	—	$	899,993
Net investment income	—			—			—			228,905			—			—		228,905
Other income	—			—			—			—			438			—		438
Total revenue	630,824			269,166			3			228,905			438			—		1,129,336
Expenses:
Policy benefits	406,963			170,875			7,854			—			—			—		585,692
Required interest on reserves	(167,719		)	(21,955		)	(10,832		)	200,506			—			—		—
Required interest on DAC	50,948			6,395			125			(57,468		)	—			—		—
Amortization of acquisition costs	108,798			29,151			500			—			—			—		138,449
Commissions, premium taxes, and non-deferred acquisition costs	50,375			23,759			5			—			—			—		74,139
Insurance administrative expense⁽¹⁾	—			—			—			—			60,570			—		60,570
Parent expense	—			—			—			—			2,472			—		2,472
Stock-based compensation expense	—			—			—			—			11,533			—		11,533
Interest expense	—			—			—			21,094			—			—		21,094
Total expenses	449,365			208,225			(2,348		)	164,132			74,575			—		893,949
Subtotal	181,459			60,941			2,351			64,773			(74,137		)	—		235,387
Non-operating items	—			—			—			—			—			—		—
Measure of segment profitability (pretax)	$	181,459		$	60,941		$	2,351		$	64,773		$	(74,137	)	$	—	235,387

Realized gain (loss)—investments																		11,943
Income before income taxes per Condensed Consolidated Statements of Operations																		$	247,330


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



	Three Months Ended September 30, 2018
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	605,547		$	255,201		$	2		$	—		$	—		$	—			$	860,750
Net investment income	—			—			—			221,627			—			—				221,627
Other income	—			—			—			—			416			(23		)	(2)	393
Total revenue	605,547			255,201			2			221,627			416			(23		)		1,082,770
Expenses:
Policy benefits	396,701			162,574			8,581			—			—			—				567,856
Required interest on reserves	(160,058		)	(20,965		)	(11,831		)	192,854			—			—				—
Required interest on DAC	48,907			6,136			145			(55,188		)	—			—				—
Amortization of acquisition costs	103,792			25,162			538			—			—			—				129,492
Commissions, premium taxes, and non-deferred acquisition costs	47,609			22,041			5			—			—			(23		)	(2)	69,632
Insurance administrative expense⁽¹⁾	—			—			—			—			55,812			3,590			(3)	59,402
Parent expense	—			—			—			—			2,667			1,578			(4)	4,245
Stock-based compensation expense	—			—			—			—			10,412			—				10,412
Interest expense	—			—			—			22,433			—			—				22,433
Total expenses	436,951			194,948			(2,562		)	160,099			68,891			5,145				863,472
Subtotal	168,596			60,253			2,564			61,528			(68,475		)	(5,168		)		219,298
Non-operating items	—			—			—			—			—			5,168			(3,4)	5,168
Measure of segment profitability (pretax)	$	168,596		$	60,253		$	2,564		$	61,528		$	(68,475	)	$	—			224,466

Realized gain (loss)—investments																				1,032
Administrative settlements																				(3,590		)
Non-operating fees																				(1,578		)
Income before income taxes per Condensed Consolidated Statements of Operations																				$	220,330


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


(2)	Elimination of intersegment commission.


(3)	In 2018, the Company recorded $3.6 million in administrative settlements related to state regulatory examinations. These administrative settlements were included in "Policyholder benefits" in the Consolidated Statements of Operations.

(4)

Non-operating fees.



	Nine Months Ended September 30, 2019
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	1,886,314		$	802,132		$	4		$	—		$	—		$	—			$	2,688,450
Net investment income	—			—			—			683,003			—			—				683,003
Other income	—			—			—			—			1,077			—				1,077
Total revenue	1,886,314			802,132			4			683,003			1,077			—				3,372,530
Expenses:
Policy benefits	1,227,616			511,403			23,792			—			—			—				1,762,811
Required interest on reserves	(496,894		)	(65,131		)	(32,840		)	594,865			—			—				—
Required interest on DAC	151,270			19,019			383			(170,672		)	—			—				—
Amortization of acquisition costs	327,407			83,508			1,521			—			—			—				412,436
Commissions, premium taxes, and non-deferred acquisition costs	150,567			70,719			16			—			—			—				221,302
Insurance administrative expense⁽¹⁾	—			—			—			—			179,177			5,900			(2,3)	185,077
Parent expense	—			—			—			—			7,987			—				7,987
Stock-based compensation expense	—			—			—			—			33,348			—				33,348
Interest expense	—			—			—			63,804			—			—				63,804
Total expenses	1,359,966			619,518			(7,128		)	487,997			220,512			5,900				2,686,765
Subtotal	526,348			182,614			7,132			195,006			(219,435		)	(5,900		)		685,765
Non-operating items	—			—			—			—			—			5,900			(2,3)	5,900
Measure of segment profitability (pretax)	$	526,348		$	182,614		$	7,132		$	195,006		$	(219,435	)	$	—			691,665

Realized gain (loss)—investments																				18,426
Administrative settlements																				(400		)
Legal proceedings																				(5,500		)
Income before income taxes per Condensed Consolidated Statements of Operations																				$	704,191


(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.



	Nine Months Ended September 30, 2018
	Life			Health			Annuity			Investment			Corporate & Other			Adjustments				Consolidated
Revenue:
Premium	$	1,806,384		$	758,439		$	12		$	—		$	—		$	—			$	2,564,835
Net investment income	—			—			—			658,279			—			—				658,279
Other income	—			—			—			—			1,180			(76		)	(2)	1,104
Total revenue	1,806,384			758,439			12			658,279			1,180			(76		)		3,224,218
Expenses:
Policy benefits	1,196,616			483,654			25,852			—			—			—				1,706,122
Required interest on reserves	(474,373		)	(62,095		)	(35,733		)	572,201			—			—				—
Required interest on DAC	145,126			18,228			448			(163,802		)	—			—				—
Amortization of acquisition costs	312,168			74,311			1,710			—			—			—				388,189
Commissions, premium taxes, and non-deferred acquisition costs	142,253			66,502			19			—			—			(76		)	(2)	208,698
Insurance administrative expense⁽¹⁾	—			—			—			—			166,560			3,590			(3)	170,150
Parent expense	—			—			—			—			7,806			1,578			(4)	9,384
Stock-based compensation expense	—			—			—			—			29,969			—				29,969
Interest expense	—			—			—			66,466			—			—				66,466
Total expenses	1,321,790			580,600			(7,704		)	474,865			204,335			5,092				2,578,978
Subtotal	484,594			177,839			7,716			183,414			(203,155		)	(5,168		)		645,240
Non-operating items	—			—			—			—			—			5,168			(3,4)	5,168
Measure of segment profitability (pretax)	$	484,594		$	177,839		$	7,716		$	183,414		$	(203,155	)	$	—			650,408

Realized gain (loss)—investments																				14,796
Administrative settlements																				(3,590		)
Non-operating fees																				(1,578		)
Income before income taxes per Condensed Consolidated Statements of Operations																				$	660,036


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


(2)	Elimination of intersegment commission.


(3)	In 2018, the Company recorded $3.6 million in administrative settlements related to state regulatory examinations. These administrative settlements were included in "Policyholder benefits" in the Consolidated Statements of Operations.

(4)

Non-operating fees.