Core Insights - The article discusses the "Magnificent Seven" stocks, highlighting that the attention on these companies is more about market hype than fundamental changes in their businesses [2] - It emphasizes the importance of thorough research and analysis to identify high-quality investment opportunities beyond surface-level metrics [3] Company Analysis - Globe Life Inc. (GL) has shown consistent growth, with revenue and net operating profit after tax (NOPAT) increasing by 4% and 7% compounded annually since 2014, respectively [6] - The NOPAT margin for Globe Life improved from 14% in 2014 to 19% in the trailing twelve months (TTM), while invested capital turns decreased from 1.0 to 0.9 [6] - The return on invested capital (ROIC) for Globe Life rose from 13% in 2014 to 16% in the TTM, driven by rising NOPAT margins [6] Valuation Insights - At a current price of $120 per share, Globe Life has a price-to-economic book value (PEBV) ratio of 0.6, indicating that the market expects a 40% permanent decline in NOPAT from TTM levels, which appears overly pessimistic given the company's historical growth [8] - Even under conservative projections, where NOPAT margin falls to 12% and revenue grows by only 3% annually through 2034, the stock could be valued at $156 per share, representing a 30% upside [9] - If Globe Life's profits grow in line with historical levels, the potential upside for the stock increases further [9] Financial Adjustments - The company's financial filings underwent significant adjustments, with over $100 million in changes to the income statement, resulting in a net removal of over $15 million in non-operating expenses [10] - Nearly $4 billion in adjustments were made to the balance sheet to calculate invested capital, with a net increase of under $1 billion [11] - Valuation adjustments totaled just under $200 million, all of which decreased shareholder value, notably due to outstanding employee stock options [11]

Core Insights - Globe Life Inc. (GL) shares have increased by 44% over the past year, outperforming the Finance sector's growth of 19.9% and the Zacks S&P 500 composite's growth of 11.4% [1][2][7] - The company has a market capitalization of $10.13 billion and an average trading volume of 0.6 million shares over the last three months [1] Valuation and Performance - Globe Life shares are trading at a forward price-to-earnings multiple of 8.48X, which is lower than the industry average of 12.45X, the Finance sector's 16.29X, and the Zacks S&P 500 Composite's 21.82X, indicating they are affordable [3] - The Zacks average price target for Globe Life is $142.42 per share, suggesting a potential upside of 15.9% from the last closing price [11] Growth Projections - The Zacks Consensus Estimate for Globe Life's 2025 earnings per share indicates a year-over-year increase of 10%, with revenues projected to reach $6.05 billion, reflecting a 4.6% improvement [4] - Earnings have grown by 13.3% over the past five years, surpassing the industry average growth of 5.5% [8] Financial Strength - Globe Life's trailing 12-month return on equity is 21.4%, exceeding the industry average of 15.5%, indicating effective utilization of shareholder funds [16] - The return on invested capital (ROIC) for the trailing 12 months is 12.7%, better than the industry average of 7.6%, reflecting the company's efficiency in generating income [17] Revenue Drivers - The company is experiencing revenue growth driven by premium increases in its Life Insurance and Health Insurance segments, as well as net investment income [18] - Future growth is expected to be fueled by the strong performance of the American Income and Liberty National divisions, with net life and health sales projected to grow in the mid-teens for Liberty National [19][20] Capital Position and Shareholder Value - Globe Life maintains a strong liquidity position and has targeted a consolidated Company Action Level RBC ratio of 300% to 320% for 2025 [21] - The company has consistently increased its dividend over the past eight years, with a compound annual growth rate (CAGR) of 7% [22] Conclusion - Globe Life's combination of higher sales, improved asset management, strong liquidity, and effective capital deployment positions it as an attractive investment opportunity [23] - The stock's favorable growth estimates and attractive valuations are expected to benefit the company in the long term [24]

Financial Performance - Net income for the three months ended March 31, 2025, was $255 million, a slight increase from $254 million in the same period in 2024[230]. - Total premium income rose 5% to $1.2 billion for the three months ended March 31, 2025, compared to the prior year[243]. - Net operating income decreased 2% to $259 million, impacted by an 18% decline in excess investment income[231]. - Total net sales increased 6% to $216 million, with an average producing agent count rising 5% over the prior year[228]. - For the three months ended March 31, 2025, total premium and policy charges increased by 3% to $829.9 million compared to $804.3 million in the same period of 2024[255]. - Total health net sales for the three months ended March 31, 2025, were $67.237 million, a 24% increase from $54.400 million in the same period in 2024[300]. Premium Income - Life insurance premium income increased 3% to $830 million, while life underwriting margin increased to $337 million, up 9% from $309 million in 2024[244]. - Health insurance premium income increased 8% to $370 million, but health underwriting margin declined to $85 million, down 10% from $94 million in 2024[245]. - Health premium accounted for 31% of total premium in 2025, while the health underwriting margin declined to $85 million from $94 million in the prior year[284]. - The life insurance segment contributed 69% of total premium and 80% of total underwriting margin in 2025[253]. Investment Income - Excess investment income declined 18% to $35.9 million, reflecting lower earned yields on investments[246]. - Net investment income for the three months ended March 31, 2025, was $281 million, a 1% decrease from the previous year, while mean invested assets increased by 1%[322]. - The earned yield on commercial mortgage loans decreased to 6.53% from 8.70% in the prior year, attributed to lower floating rates and loans in non-accrual status[322]. - Excess investment income for Q1 2025 was $35.870 million, down 18% from $43.785 million in Q1 2024[318]. Shareholder Returns - The company repurchased 1.5 million shares at a total cost of $177 million, averaging $121.70 per share[247]. - Share repurchases in Q1 2025 totaled $263,170 thousand, significantly higher than $23,529 thousand in Q1 2024, driven by favorable market conditions and higher excess cash flow[386]. - The company has utilized $10.5 billion for share repurchases since the program's inception in 1986, indicating a long-term commitment to returning value to shareholders[383]. Operating Expenses - Total operating expenses increased by $15,532 thousand, or 17%, compared to the same period in 2024, primarily due to higher insurance administrative expenses[380]. - Insurance administrative expenses as a percentage of premium increased to 7.3% for the three months ended March 31, 2025, compared to 7.0% for the same period in 2024[380]. Cash Flow and Liquidity - Consolidated net cash inflows from operations were $432 million in Q1 2025, compared to $351 million in Q1 2024, reflecting a year-over-year increase of approximately 23%[404]. - Cash and short-term investments increased to $366 million at March 31, 2025, up from $250 million at December 31, 2024[405]. - The company expects to maintain target capital ratios through liquid assets, internally-generated cash flow, and the credit facility[403]. - The company has $17.5 billion in fixed income securities available for sale, providing a buffer for unexpected liquidity needs[405]. Investment Strategy - Globe Life's investment strategy focuses on high-quality fixed maturities, with a significant portion of the portfolio consisting of investment-grade securities[339]. - The company plans to continue executing its investment strategy by seeking assets that meet quality objectives while maximizing risk-adjusted returns[345]. - The total fixed maturity portfolio had a fair value of $17.5 billion, an increase from $17.2 billion at December 31, 2024[366]. Debt and Financing - The total long-term debt remained stable at $2.3 billion as of March 31, 2025, consistent with the previous reporting period[406]. - The annualized interest rate on commercial paper was 5.13% as of March 31, 2025, slightly down from 5.22% at December 31, 2024[400]. - The Parent Company had $476 million of additional borrowing capacity under its credit facility as of March 31, 2025, down from $561 million a year earlier[400].

Core Insights - Globe Life Inc. reported a first-quarter 2025 net operating income of $3.07 per share, which missed the Zacks Consensus Estimate by 5.2%, but improved 10% year over year due to higher insurance underwriting income [1] - The company experienced a 5% year-over-year increase in total premium revenues, reaching $1.2 billion, primarily driven by higher premiums from Life and Health insurance [2] - Net investment income decreased by 1% year over year to $280.6 million, while operating revenues rose 3.7% to $1.5 billion, attributed to growth in Life and Health insurance premiums [2] Financial Performance - Excess investment income, a profitability measure, fell 18% year over year to $35.8 million, while total insurance underwriting income increased by 4% to $336.3 million, mainly due to higher Life underwriting income [3] - Total benefits and expenses rose 5.7% year over year to $1.1 billion, driven by increased policyholder benefits and various operational costs [4] - Administrative expenses increased by 8.8% year over year to $87.5 million [3] Segmental Results - Life insurance premium revenues grew by 3% year over year to $829.8 million, supported by higher premiums from distribution channels like American Income and Liberty National, both of which grew by 6% [5] - Health insurance premium revenues increased by 8% year over year to $369.7 million, with net health sales rising 24% to $67.2 million, although underwriting margins decreased by 10% [6] Shareholder Information - As of March 31, 2025, shareholders' equity, excluding accumulated other comprehensive income (AOCI), decreased by 1.5% year over year to $7.4 billion, while book value per share, excluding AOCI, increased by 11.2% to $87.92 [7] - The operating return on equity, excluding AOCI, was 14.3%, contracting by 30 basis points year over year [7] Share Repurchase - Globe Life repurchased 1.5 million shares worth $177 million during the reported quarter [9] Future Outlook - The company projects net operating income between $13.45 and $14.05 per diluted common share for the year ending December 31, 2025, reaffirming earlier guidance [10]

Financial Data and Key Metrics Changes - In Q1 2025, net income was $255 million or $3.01 per share, compared to $254 million or $2.67 per share a year ago, indicating a year-over-year increase in earnings per share [6] - Net operating income for the quarter was $259 million or $3.07 per share, a 10% increase from the previous year [6] - Return on equity as of March 31 was 19%, with book value per share at $64.5, while excluding accumulated other comprehensive income (AOCI), return on equity was 14.1% and book value per share was $87.92, up 11% from a year ago [6] Business Line Data and Key Metrics Changes - Life insurance operations saw premium revenue increase by 3% to $830 million, with life underwriting margin rising 9% to $337 million due to premium growth and lower policy obligations [6][7] - Health insurance premium revenue grew 8% to $370 million, but health underwriting margin decreased by 10% to $85 million due to higher claim costs [7] - American Income Life reported a 6% increase in life premiums to $438 million, with a life underwriting margin up 5% to $196 million [9] - Liberty National's life premiums grew 6% to $96 million, while Family Heritage's health premiums increased 9% to $112 million [11][12] Market Data and Key Metrics Changes - The average producing agent count for American Income Life was 11,510, up 3% from a year ago, while Liberty National's agent count increased by 8% to 3,688 [9][11] - Direct to consumer life premiums decreased by 1% to $246 million, with net life sales down 12% to $25 million due to reduced marketing spend [12] - United American General Agency's health premiums increased by 13% to $160 million, but health underwriting margin fell to $2 million due to higher claim costs [13] Company Strategy and Development Direction - The company expects life premium revenue to grow around 4% for the year, with health premium revenue anticipated to grow between 7.5% and 8.5% [7] - The company plans to maintain a conservative investment philosophy, focusing on long-dated assets to withstand economic downturns [24] - The company is evaluating capital management opportunities under an economic framework available in Bermuda, with updates expected in 2025 [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the midpoint of EPS guidance for 2025, citing favorable mortality trends and expected remeasurement gains [44] - The company anticipates a favorable margin impact in the third quarter due to life assumption updates, with expected remeasurement gains between $60 million and $100 million [33] - Management acknowledged challenges in health margins due to increased claims but remains optimistic about managing these through rate increases [52] Other Important Information - The company repurchased approximately 1.5 million shares for $177 million in Q1 2025, returning a total of $197 million to shareholders [26] - The company has a consolidated risk-based capital (RBC) ratio of 316%, providing excess capital to meet minimum target levels [29] - Legal proceedings included an estimate for settlements related to outstanding litigation, not directly tied to ongoing regulatory matters [78] Q&A Session Summary Question: What is the outlook for health margins? - Management indicated that most rate increases will be effective at the beginning of Q2, expecting margins for United American General Agency to be in the 5% to 7% range for the year [37][38] Question: How confident is the company in achieving EPS guidance? - Management expressed confidence in the guidance range, citing favorable mortality trends and expected remeasurement gains [44][46] Question: What is driving the increase in health usage? - The increase in health usage is primarily frequency-driven, with some claims related to specialty bandages contributing to higher costs [97]

Financial Data and Key Metrics Changes - In Q1 2025, net income was $255 million or $3.01 per share, compared to $254 million or $2.67 per share a year ago, indicating a slight increase in profitability [5] - Net operating income for the quarter was $259 million or $3.07 per share, a 10% increase from the previous year, slightly exceeding internal projections [5] - Return on equity as of March 31 was 19%, with book value per share at $64.5, while excluding accumulated other comprehensive income (AOCI), return on equity was 14.1% and book value per share was $87.92, up 11% from a year ago [5] Business Line Data and Key Metrics Changes - Life insurance premium revenue increased by 3% year-over-year to $830 million, with life underwriting margin rising 9% to $337 million due to premium growth and lower policy obligations [5][6] - Health insurance premium revenue grew by 8% to $370 million, but health underwriting margin decreased by 10% to $85 million due to higher claim costs [6] - American Income Life saw life premiums rise 6% to $438 million, with a life underwriting margin up 5% to $196 million [8] - Liberty National's life premiums grew 6% to $96 million, while health sales decreased by 5% to $7 million [10] - Family Heritage's health premiums increased by 9% to $112 million, with health underwriting margin up 10% to $39 million [11] Market Data and Key Metrics Changes - United American General Agency's health premiums increased by 13% to $160 million, but health underwriting margin fell to $2 million due to higher claim costs [13] - The average producing agent count across various divisions showed growth, with American Income up 3% and Liberty National up 8% year-over-year [9][10] Company Strategy and Development Direction - The company anticipates life premium revenue growth of around 4% for the year, with health premium revenue expected to grow between 7.5% and 8.5% [6] - The focus remains on managing rising advertising and distribution costs while maximizing underwriting margin dollars on new sales [12] - The company plans to maintain a consolidated risk-based capital (RBC) ratio within the targeted range of 300% to 320% [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the midpoint of EPS guidance for 2025, citing favorable mortality trends and expected remeasurement gains [42][44] - The company is well-positioned to manage through economic uncertainties, with a strong capital position and a conservative investment philosophy [24][29] - There is an expectation of elevated health obligations due to recent claim trends, but management believes they can manage these through rate increases [33] Other Important Information - The company repurchased approximately 1.5 million shares for $177 million in Q1 2025, returning a total of $197 million to shareholders [26] - Legal proceedings included an estimate for settlements related to outstanding litigation, but these are not indicative of future performance [78] Q&A Session Summary Question: Outlook for Health margins and timing of rate actions - Management indicated that most rate increases will be effective at the beginning of Q2, expecting margins for UAGA to be in the 5% to 7% range for the year [36] Question: Confidence in EPS guidance amid tough comps - Management reaffirmed confidence in the EPS guidance range, citing favorable mortality trends and expected remeasurement gains [42][44] Question: Increase in health usage and claims - Management noted that utilization is the primary driver of increased claims, with actions being taken to mitigate costs related to specific procedures [96][100] Question: Capital return strategy and commercial paper reduction - The company plans to maintain a normal capital return strategy but may front-load buybacks depending on market conditions [57] Question: Legal proceedings and regulatory matters - The increase in legal expenses is not indicative of future performance and is common in the insurance industry [78]

Core Viewpoint - Globe Life reported quarterly earnings of $3.07 per share, missing the Zacks Consensus Estimate of $3.24 per share, but showing an increase from $2.78 per share a year ago, indicating a -5.25% earnings surprise [1][2] Financial Performance - The company posted revenues of $1.48 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.52%, compared to $1.4 billion in revenues a year ago [2] - Over the last four quarters, Globe Life has surpassed consensus EPS estimates three times, but has not beaten consensus revenue estimates [2] Stock Performance - Globe Life shares have increased approximately 11.2% since the beginning of the year, contrasting with the S&P 500's decline of -5.5% [3] - The current consensus EPS estimate for the upcoming quarter is $3.39 on revenues of $1.51 billion, and for the current fiscal year, it is $13.67 on revenues of $6.06 billion [7] Industry Outlook - The Insurance - Accident and Health industry is currently in the top 36% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

[First Quarter 2025 Financial Performance Overview](index=1&type=section&id=First%20Quarter%202025%20Results) [Results of Operations](index=2&type=section&id=RESULTS%20OF%20OPERATIONS) In the first quarter of 2025, Globe Life reported a net income of $3.01 per diluted common share, a 13% increase year-over-year. Net operating income, a key management metric, rose by 10% to $3.07 per diluted common share, exceeding management's expectations. This growth was primarily driven by a 17% increase in insurance underwriting income per share, although partially offset by lower excess investment income and higher interest on debt Q1 2025 Key Per Share Financial Metrics | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income per Diluted Share | $3.01 | $2.67 | 13% | | Net Operating Income per Diluted Share | $3.07 | $2.78 | 10% | | Insurance Underwriting Income per Share | $3.98 | $3.41 | 17% | | Excess Investment Income per Share | $0.42 | $0.46 | (9)% | Q1 2025 Operating Summary (in thousands) | Operating Summary | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Insurance underwriting income | $336,315 | $324,361 | 4% | | Excess investment income | $35,870 | $43,785 | (18)% | | Net operating income | $259,337 | $264,099 | (2)% | | Net income | $254,563 | $254,217 | 0% | - The company incurred costs of **$4.8 million** related to the settlement of certain litigation claims, which impacted net income[7](index=7&type=chunk)[8](index=8&type=chunk) [Reconciliation of GAAP and Non-GAAP Measures](index=3&type=section&id=MANAGEMENT%20VS.%20GAAP%20MEASURES) The company's net income as a return on equity (ROE) was 19.0% for Q1 2025, compared to 21.3% in the prior year. The non-GAAP measure of net operating income as an ROE (excluding AOCI) was 14.1%, slightly down from 14.3%. Book value per share increased significantly to $64.50 from $53.03 year-over-year, while book value per share excluding AOCI, a key management metric, grew to $87.92 from $79.00 Return on Equity (ROE) Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income as an ROE | 19.0% | 21.3% | | Net operating income as an ROE (excluding AOCI) | 14.1% | 14.3% | Book Value Per Share Comparison | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Book value per share | $64.50 | $53.03 | | Book value per share, excluding AOCI | $87.92 | $79.00 | - Management utilizes non-GAAP measures like shareholders' equity excluding AOCI to better identify trends by removing fluctuations from interest rate changes[12](index=12&type=chunk) [Insurance Operations Analysis](index=4&type=section&id=INSURANCE%20OPERATIONS:) [Overall Insurance Performance](index=4&type=section&id=INSURANCE%20UNDERWRITING%20INCOME) Total insurance premium revenue grew 5% year-over-year to $1.2 billion, with life insurance premiums up 3% and health insurance premiums up 8%. Life insurance constitutes 69% of total premium revenue and 80% of the underwriting margin. Overall insurance underwriting income increased by 4% to $336.3 million, while net health sales saw a strong 24% increase, contrasting with a 1% decline in net life sales Q1 Insurance Premium Revenue (in thousands) | Product Type | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Life insurance | $829,863 | $804,265 | 3% | | Health insurance | $369,791 | $341,019 | 8% | | **Total** | **$1,199,654** | **$1,145,284** | **5%** | Q1 Insurance Underwriting Income (in thousands) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Life Underwriting Margin | $337,264 | $309,011 | 9% | | Health Underwriting Margin | $84,721 | $93,770 | (10)% | | **Insurance Underwriting Income** | **$336,315** | **$324,361** | **4%** | - The ratio of administrative expenses to premium increased to **7.3%** in Q1 2025 from 7.0% in Q1 2024[20](index=20&type=chunk) [Life Insurance Segment](index=5&type=section&id=LIFE%20INSURANCE%20RESULTS%20BY%20DISTRIBUTION%20CHANNEL) Life insurance premiums increased by 3% to $830 million, driven by 6% growth in both the American Income and Liberty National divisions. However, total net life sales declined by 1%, with a notable 12% drop in the Direct to Consumer channel. Despite the mixed sales results, the total life underwriting margin improved by 9% to $337 million, with the margin percentage rising to 41% from 38% Q1 Life Premium by Distribution Channel (in thousands) | Channel | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | American Income | $437,866 | $414,044 | 6% | | Direct to Consumer | $245,600 | $248,040 | (1)% | | Liberty National | $96,182 | $90,777 | 6% | | **Total** | **$829,863** | **$804,265** | **3%** | Q1 Life Net Sales by Distribution Channel (in thousands) | Channel | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | American Income | $98,555 | $97,195 | 1% | | Direct to Consumer | $25,175 | $28,563 | (12)% | | Liberty National | $22,469 | $21,605 | 4% | | **Total** | **$148,351** | **$149,497** | **(1)%** | Q1 Life Underwriting Margin by Distribution Channel (in thousands) | Channel | Q1 2025 | % of Premium | Q1 2024 | % of Premium | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | American Income | $196,169 | 45% | $187,068 | 45% | 5% | | Direct to Consumer | $64,200 | 26% | $58,585 | 24% | 10% | | **Total** | **$337,264** | **41%** | **$309,011** | **38%** | **9%** | [Health Insurance Segment](index=6&type=section&id=HEALTH%20INSURANCE%20RESULTS%20BY%20DISTRIBUTION%20CHANNEL) Health insurance operations showed strong top-line growth, with premiums up 8% to $370 million and net sales surging 24% to $67 million. The growth was led by the United American division, which saw a 13% increase in premiums and a 69% jump in net sales. Despite this sales momentum, the total health underwriting margin declined by 10% to $84.7 million, with the margin percentage falling to 23% from 27%, primarily due to a significant drop in United American's margin Q1 Health Premium by Distribution Channel (in thousands) | Channel | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | United American | $159,848 | $141,635 | 13% | | Family Heritage | $112,354 | $103,391 | 9% | | **Total** | **$369,791** | **$341,019** | **8%** | Q1 Health Net Sales by Distribution Channel (in thousands) | Channel | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | United American | $27,708 | $16,423 | 69% | | Family Heritage | $26,816 | $24,966 | 7% | | **Total** | **$67,237** | **$54,400** | **24%** | Q1 Health Underwriting Margin by Distribution Channel (in thousands) | Channel | Q1 2025 | % of Premium | Q1 2024 | % of Premium | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | United American | $1,617 | 1% | $11,906 | 8% | (86)% | | Family Heritage | $39,249 | 35% | $35,838 | 35% | 10% | | **Total** | **$84,721** | **23%** | **$93,770** | **27%** | **(10)%** | [Agent Productivity](index=7&type=section&id=PRODUCING%20EXCLUSIVE%20AGENT%20COUNT%20RESULTS%20BY%20DISTRIBUTION%20CHANNEL) The company saw growth in its exclusive producing agent force compared to the prior year. The average producing agent count at American Income grew by 3% to 11,510. Liberty National and Family Heritage divisions experienced stronger growth, with agent counts increasing by 8% and 9% respectively Quarterly Average Producing Agent Count | Division | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | American Income | 11,510 | 11,139 | 3% | | Liberty National | 3,688 | 3,419 | 8% | | Family Heritage | 1,417 | 1,295 | 9% | [Investment Portfolio and Strategy](index=7&type=section&id=INVESTMENTS) [Investment Performance](index=7&type=section&id=Excess%20Investment%20Income) Excess investment income, a key measure of the investment segment's performance, decreased by 18% to $35.9 million in Q1 2025. On a per-share basis, it fell 9% to $0.42. This decline was driven by a 1% drop in net investment income coupled with a 2% increase in required interest on policy liabilities Q1 Excess Investment Income (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net investment income | $280,614 | $282,578 | (1)% | | Interest on policy liabilities | ($244,744) | ($238,793) | 2% | | **Excess investment income** | **$35,870** | **$43,785** | **(18)%** | | **Per share** | **$0.42** | **$0.46** | **(9)%** | - The fixed maturity portfolio earned an annual taxable equivalent effective yield of **5.25%** during Q1 2025, stable compared to 5.24% in the year-ago quarter[43](index=43&type=chunk) [Investment Portfolio Composition](index=8&type=section&id=Investment%20Portfolio) As of March 31, 2025, Globe Life's total investment portfolio stood at $20.0 billion. The portfolio is heavily weighted towards fixed maturities, which comprise 87% of the total at fair value. The quality of the fixed maturity portfolio remains high, with 97% of assets rated as 'investment grade' at both amortized cost and fair value Investment Portfolio Composition as of March 31, 2025 (in thousands) | Asset Class | Amount | % of Total | | :--- | :--- | :--- | | Fixed maturities at fair value | $17,504,967 | 87% | | Other long-term investments | $1,236,624 | 6% | | Policy loans | $708,175 | 4% | | Mortgage loans | $426,174 | 2% | | Short-term investments | $134,066 | 1% | | **Total** | **$20,010,006** | | - At amortized cost, **97%** of the **$19.0 billion** fixed maturity portfolio was rated investment grade. Corporate bonds make up the largest portion at **$15.1 billion**[42](index=42&type=chunk)[43](index=43&type=chunk) - The company is not a party to any credit default swaps and does not participate in securities lending[44](index=44&type=chunk) [Investment Acquisitions](index=9&type=section&id=Fixed%20Maturity%20Acquisitions) During the first quarter, the company acquired $244.8 million in fixed maturities, a decrease from $682.4 million in the prior-year quarter. These new investments have an average annual effective yield of 6.4% and an average rating of A-. The company also invested $52.0 million in other assets, primarily mortgage loans and limited partnerships Q1 Fixed Maturity Acquisitions | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Amount (in thousands) | $244,845 | $682,427 | | Average annual effective yield | 6.4% | 5.9% | | Average rating | A- | A | Q1 Other Investment Acquisitions (in thousands) | Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Limited partnerships | $15,831 | $67,498 | | Mortgage loans | $35,621 | $58,406 | | **Total** | **$51,954** | **$139,222** | [Capital Management and Outlook](index=9&type=section&id=SHARE%20REPURCHASE:) [Share Repurchase and Liquidity](index=9&type=section&id=LIQUIDITY/CAPITAL:) Globe Life continued its capital return program by repurchasing 1.5 million shares of its common stock for a total of $177 million during the quarter, at an average price of $121.70 per share. The company reports that its operations generate strong, stable cash flows, ensuring sufficient liquidity at the Parent Company level to meet the capital needs of its insurance subsidiaries - In Q1 2025, the company repurchased **1.5 million** common shares[50](index=50&type=chunk) - The total cost of the share repurchase was **$177 million**, at an average price of **$121.70 per share**[50](index=50&type=chunk) - The company's primary business of writing basic protection life and supplemental health insurance generates strong and stable cash flows, which are not impacted by volatile equity markets[51](index=51&type=chunk) [2025 Earnings Guidance](index=9&type=section&id=EARNINGS%20GUIDANCE%20FOR%20THE%20YEAR%20ENDING%20DECEMBER%2031,%202025:) Globe Life has reaffirmed its full-year 2025 earnings guidance. The company continues to project net operating income to be in the range of $13.45 to $14.05 per diluted common share - The company reaffirmed its previous guidance for the full year ending December 31, 2025[52](index=52&type=chunk) - Projected net operating income per diluted common share for 2025 is between **$13.45** and **$14.05**[52](index=52&type=chunk) [Appendix](index=12&type=section&id=APPENDIX) [GAAP Condensed Consolidated Statements of Operations](index=12&type=section&id=GLOBE%20LIFE%20INC.%20GAAP%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The GAAP condensed consolidated statement of operations shows total revenues of $1.48 billion for Q1 2025, an increase from $1.42 billion in Q1 2024. Net income remained flat at approximately $254 million for both periods. On a per-share basis, diluted net income was $3.01, up from $2.67 in the prior-year quarter Q1 GAAP Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total premium | $1,199,654 | $1,145,284 | | Total revenue | $1,480,422 | $1,416,139 | | Total benefits and expenses | $1,164,341 | $1,101,216 | | Income before income taxes | $316,081 | $314,923 | | **Net income** | **$254,563** | **$254,217** | | **Diluted net income per common share** | **$3.01** | **$2.67** |

Core Insights - Globe Life Inc. reported a net income of $3.01 per diluted common share for Q1 2025, an increase from $2.67 in the same quarter last year, while net operating income was $3.07 per diluted common share, exceeding management's expectations [1][6][11] Financial Performance - Net operating income increased by 10% year-over-year, from $2.78 to $3.07 per diluted common share [6][7] - Net income as a return on equity (ROE) was 19.0%, down from 21.3% in the previous year [6][11] - Total premium revenue for life insurance rose by 3% to $829.86 million, while health insurance premiums increased by 8% to $369.79 million, leading to a total premium revenue of $1.20 billion, a 5% increase from the previous year [13][43] Insurance Operations - Life insurance accounted for 80% of the insurance underwriting margin, while health insurance made up 20% [12] - Life underwriting margin increased by 9% year-over-year, while health underwriting margin decreased by 10% [15][19] - Net sales of life insurance declined by 1%, whereas net health sales increased by 24% [13][19] Investment Performance - Net investment income decreased by 1% to $280.61 million, while excess investment income fell by 18% to $35.87 million [25][26] - The investment portfolio totaled $20.01 billion, with fixed maturities making up 87% of the total [28][29] Shareholder Actions - The company repurchased 1.5 million shares of common stock at a total cost of $177 million, averaging $121.70 per share [34] - Shareholders' equity, excluding accumulated other comprehensive income (AOCI), was reported at $7.40 billion [11][12] Guidance - Globe Life projects net operating income between $13.45 to $14.05 per diluted common share for the year ending December 31, 2025, reaffirming previous guidance [36]

Company Overview - Globe Life Inc. is a holding company that specializes in life and supplemental health insurance targeting the middle-income market [2] - The company distributes its products through various channels, including direct-to-consumer sales and partnerships with exclusive and independent agencies [2] Annual Meeting Announcement - Globe Life Inc. will hold its 2025 Annual Meeting of Shareholders on April 24, 2025, at 10:00 AM Central [1] - The meeting will be accessible via a live audio webcast, and registration is required for both registered and beneficial shareholders as well as guests [1][3] - The meeting will adhere to the company's Shareholders' Rights Policy and Robert's Rules of Order [1]