GLOBE LIFE INC.GL

GLOBE LIFE INC. Income Taxes Disclosure

10-KFiled Feb 25, 20265 min read
Note 9—Income Taxes
The following table discloses significant components of income taxes for each year presented:
Year Ended December 31,
202520242023
Income tax expense (benefit) from operations:
Current income tax expense (benefit)—federal
$196,988 $217,929 $145,700 
Current income tax expense (benefit)—state
219 206 180 
Deferred income tax expense (benefit)—federal
77,530 37,740 77,631 
Provision for income tax expense (benefit)274,737 255,875 223,511 
Shareholders’ equity:
Other comprehensive income (loss)68,656 197,427 4,762 
$343,393 $453,302 $228,273 

In each of the years 2023 through 2025, deferred income tax expense (benefit) was incurred because of certain differences between net income before income tax expense (benefit) as reported on the Consolidated Statements of Operations and taxable income as reported on Globe Life's income tax returns. As explained in Note 1—Significant Accounting Policies, these differences caused the consolidated financial statement book values of some assets and liabilities to be different from their respective tax bases.
The effective income tax rate differed from the expected U.S. federal statutory rate of 21.0% as shown below:
Year Ended December 31,
2025%2024%2023%
U.S. federal statutory tax rate
$301,555 21.0 $278,594 21.0 $250,796 21.0 
State and local income taxes, net of federal income tax effect(1)
173 — 163 — 142 — 
Tax credits:
LIH credits
(11,906)(0.8)(9,700)(0.7)(14,291)(1.2)
Purchased solar credits
(4,988)(0.3)(3,000)(0.2)— — 
Increasing research activities credit
(1,400)(0.1)(2,000)(0.2)— — 
Nontaxable or nondeductible items:
Share-based awards
377 — 1,341 0.1 (4,724)(0.4)
Tax exempt investment income
(9,522)(0.7)(9,644)(0.7)(9,644)(0.8)
Other adjustments
448 — 121 — 1,232 0.1 
Effective tax rate
$274,737 19.1 $255,875 19.3 $223,511 18.7 
(1)State taxes in Texas and California made up the majority (greater than 50 percent) of the tax effect in this category.
The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes:

Year Ended December 31,
202520242023
Federal$140,527 $128,005 $120,658 
State
173 189 144 
Foreign
226 201 232 
Total income taxes paid (received)
$140,926 $128,395 $121,034 

The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdiction in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received):

Year Ended December 31,
2025
%
2024
%
2023
%
Federal$140,527 99.7 $128,005 99.7 $120,658 99.7 
Other399 0.3 390 0.3 376 0.3 
Total
$140,926 100.0 $128,395 100.0 $121,034 100.0 

Domestic income from continuing operations before income tax expense was $1.4 billion, $1.3 billion, and $1.2 billion for the year ended December 31, 2025, 2024, and 2023, respectively. The Company had no income from foreign operations.

Year Ended December 31,
202520242023
Income tax expense (or benefit) from continuing operations:
Federal$274,518 $255,669 $223,331 
State219 206 180 
Total
$274,737 $255,875 $223,511 
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
December 31,
20252024
Deferred tax assets:
Unrealized losses$460,158 $532,756 
Carryover of tax losses15,052 10,342 
Total gross deferred tax assets475,210 543,098 
Less valuation allowance(2,632)(3,383)
Net deferred tax assets472,578 539,715 
Deferred tax liabilities:
Employee and agent compensation115,604 104,385 
Deferred acquisition costs961,915 961,406 
Future policy benefits, unearned and advance premiums, and policy claims254,277 228,117 
Other liabilities75,843 24,432 
Total gross deferred tax liabilities1,407,639 1,318,340 
Net deferred tax liability
$935,061 $778,625 
Bermuda Corporate Income Tax Act: The Bermuda Corporate Income Tax Act (the "Act") was enacted on December 27, 2023, and included a new corporate income tax ("CIT"). The CIT is in effect for years beginning after January 1, 2025. The CIT is applicable to the Company; however, due to having a small international footprint, the Company is out of scope for 2025 and will be subject to the CIT beginning in 2030. Additionally, the Company does not expect the Act to have a material impact on the consolidated financials.
Income Tax Return: Globe Life Inc. and its subsidiaries file a life-nonlife consolidated federal income tax return. The statutes of limitations for the Internal Revenue Service's examination and assessment of additional tax are closed for all tax years prior to 2017 with respect to Globe Life's consolidated federal income tax returns. Management concludes that adequate provision has been made in the consolidated financial statements for any potential assessments that may result from current or future tax examinations and other tax-related matters for all open years. The Company's Bermuda subsidiaries have made, or intend to make, the election under Internal Revenue Code Section 953(d) to be taxed as a U.S. Corporation effective with their date of incorporation.
Valuations: Globe Life has a $71.7 million net operating loss ("NOL") carryforward at December 31, 2025, of which $7.2 million was created prior to 2018 and will begin to expire in 2035 if not otherwise used to offset future taxable income. The remaining NOL carryforward of $64.5 million may be carried forward indefinitely. A valuation allowance is to be recorded when it is more likely than not that deferred tax assets will not be realized by the Company. A valuation allowance has been established in the amount of $2.6 million related to pre-acquisition and post-acquisition NOL carryforward deferred tax assets from an acquisition in 2024 as management has determined that the acquired companies will more than likely not have sufficient taxable income in future periods to realize the deferred tax assets.

Globe Life's tax liability is adjusted to include a provision for uncertain tax positions taken or expected to be taken in a tax return. However, during the years 2023 through 2025, Globe Life did not have any uncertain tax positions which resulted in unrecognized tax benefits.
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About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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