(Mark one) | |
ý | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2017 | |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from _________to_________ |
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) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | 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. | ¨ |
CLASS | OUTSTANDING AT October 31, 2017 | |||
Common Stock, $1.00 Par Value | 115,446,832 |
Page | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 6. |
Item 1. | Condensed Consolidated Financial Statements |
September 30, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Investments: | |||||||
Fixed maturities—available for sale, at fair value (amortized cost: 2017—$14,914,580; 2016—$14,188,050) | $ | 16,652,913 | $ | 15,245,861 | |||
Policy loans | 523,318 | 507,975 | |||||
Other long-term investments | 70,096 | 53,852 | |||||
Short-term investments | 65,482 | 72,040 | |||||
Total investments | 17,311,809 | 15,879,728 | |||||
Cash | 88,462 | 76,163 | |||||
Accrued investment income | 238,278 | 223,148 | |||||
Other receivables | 389,084 | 384,454 | |||||
Deferred acquisition costs | 3,911,800 | 3,783,158 | |||||
Goodwill | 441,591 | 441,591 | |||||
Other assets | 544,011 | 520,313 | |||||
Assets related to discontinued operations | 68,572 | 127,532 | |||||
Total assets | $ | 22,993,607 | $ | 21,436,087 | |||
Liabilities: | |||||||
Future policy benefits | $ | 13,298,069 | $ | 12,825,837 | |||
Unearned and advance premiums | 61,536 | 64,017 | |||||
Policy claims and other benefits payable | 318,832 | 299,565 | |||||
Other policyholders' funds | 97,016 | 96,993 | |||||
Total policy liabilities | 13,775,453 | 13,286,412 | |||||
Current and deferred income taxes payable | 2,069,158 | 1,743,990 | |||||
Other liabilities | 492,175 | 413,760 | |||||
Short-term debt | 309,002 | 264,475 | |||||
Long-term debt (estimated fair value: 2017—$1,243,232; 2016—$1,233,019) | 1,130,806 | 1,133,165 | |||||
Liabilities related to discontinued operations | 49,328 | 27,424 | |||||
Total liabilities | 17,825,922 | 16,869,226 | |||||
Commitments and Contingencies (Note 6) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, par value $1 per share—Authorized 5,000,000 shares; outstanding: -0- in 2017 and 2016 | — | — | |||||
Common stock, par value $1 per share—Authorized 320,000,000 shares; outstanding: (2017—127,218,183 issued, less 11,859,162 held in treasury and 2016—127,218,183 issued, less 9,187,075 held in treasury) | 127,218 | 127,218 | |||||
Additional paid-in capital | 508,386 | 490,421 | |||||
Accumulated other comprehensive income | 1,039,302 | 577,574 | |||||
Retained earnings | 4,239,582 | 3,890,798 | |||||
Treasury stock, at cost | (746,803 | ) | (519,150 | ) | |||
Total shareholders’ equity | 5,167,685 | 4,566,861 | |||||
Total liabilities and shareholders’ equity | $ | 22,993,607 | $ | 21,436,087 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue: | |||||||||||||||
Life premium | $ | 576,223 | $ | 546,415 | $ | 1,725,896 | $ | 1,639,156 | |||||||
Health premium | 242,991 | 236,987 | 730,557 | 709,936 | |||||||||||
Other premium | 3 | 9 | 9 | 34 | |||||||||||
Total premium | 819,217 | 783,411 | 2,456,462 | 2,349,126 | |||||||||||
Net investment income | 213,872 | 202,720 | 634,930 | 601,415 | |||||||||||
Realized investment gains (losses) | 12,595 | 3,482 | 6,142 | 7,780 | |||||||||||
Other income | 331 | 160 | 1,140 | 963 | |||||||||||
Total revenue | 1,046,015 | 989,773 | 3,098,674 | 2,959,284 | |||||||||||
Benefits and expenses: | |||||||||||||||
Life policyholder benefits | 386,445 | 369,546 | 1,168,383 | 1,101,748 | |||||||||||
Health policyholder benefits | 155,774 | 153,351 | 470,104 | 459,387 | |||||||||||
Other policyholder benefits | 9,000 | 9,255 | 26,923 | 27,475 | |||||||||||
Total policyholder benefits | 551,219 | 532,152 | 1,665,410 | 1,588,610 | |||||||||||
Amortization of deferred acquisition costs | 122,334 | 116,821 | 370,363 | 352,872 | |||||||||||
Commissions, premium taxes, and non-deferred acquisition costs | 67,863 | 61,153 | 198,011 | 185,609 | |||||||||||
Other operating expense | 63,019 | 57,805 | 187,788 | 173,080 | |||||||||||
Interest expense | 20,970 | 20,381 | 62,825 | 62,860 | |||||||||||
Total benefits and expenses | 825,405 | 788,312 | 2,484,397 | 2,363,031 | |||||||||||
Income before income taxes | 220,610 | 201,461 | 614,277 | 596,253 | |||||||||||
Income taxes | (67,264 | ) | (59,551 | ) | (183,390 | ) | (181,475 | ) | |||||||
Income from continuing operations | 153,346 | 141,910 | 430,887 | 414,778 | |||||||||||
Income (loss) from discontinued operations, net of tax | (12 | ) | 9,959 | (3,739 | ) | (447 | ) | ||||||||
Net income | $ | 153,334 | $ | 151,869 | $ | 427,148 | $ | 414,331 | |||||||
Basic net income (loss) per common share: | |||||||||||||||
Continuing operations | $ | 1.32 | $ | 1.19 | $ | 3.69 | $ | 3.44 | |||||||
Discontinued operations | — | 0.08 | (0.03 | ) | — | ||||||||||
Total basic net income per common share | $ | 1.32 | $ | 1.27 | $ | 3.66 | $ | 3.44 | |||||||
Diluted net income (loss) per common share: | |||||||||||||||
Continuing operations | $ | 1.29 | $ | 1.16 | $ | 3.61 | $ | 3.38 | |||||||
Discontinued operations | — | 0.09 | (0.03 | ) | — | ||||||||||
Total diluted net income per common share | $ | 1.29 | $ | 1.25 | $ | 3.58 | $ | 3.38 | |||||||
Dividends declared per common share | $ | 0.15 | $ | 0.14 | $ | 0.45 | $ | 0.42 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 153,334 | $ | 151,869 | $ | 427,148 | $ | 414,331 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Unrealized investment gains (losses): | |||||||||||||||
Unrealized gains (losses) on securities: | |||||||||||||||
Unrealized holding gains (losses) arising during period | 83,216 | 236,040 | 692,747 | 1,397,181 | |||||||||||
Reclassification adjustment for (gains) losses on securities included in net income | (12,910 | ) | (3,513 | ) | (13,264 | ) | (7,809 | ) | |||||||
Reclassification adjustment for amortization of (discount) and premium | 119 | (927 | ) | (379 | ) | (3,495 | ) | ||||||||
Foreign exchange adjustment on securities recorded at fair value | 1,173 | (199 | ) | 1,418 | 849 | ||||||||||
Unrealized gains (losses) on securities | 71,598 | 231,401 | 680,522 | 1,386,726 | |||||||||||
Unrealized gains (losses) on other investments | 473 | 1,685 | 3,544 | 3,568 | |||||||||||
Total unrealized investment gains (losses) | 72,071 | 233,086 | 684,066 | 1,390,294 | |||||||||||
Less applicable tax (expense) benefit | (25,225 | ) | (81,583 | ) | (239,479 | ) | (486,573 | ) | |||||||
Unrealized investment gains (losses), net of tax | 46,846 | 151,503 | 444,587 | 903,721 | |||||||||||
Unrealized gains (losses) attributable to deferred acquisition costs | 505 | 621 | (992 | ) | (4,829 | ) | |||||||||
Less applicable tax (expense) benefit | (177 | ) | (216 | ) | 347 | 1,691 | |||||||||
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax | 328 | 405 | (645 | ) | (3,138 | ) | |||||||||
Foreign exchange translation adjustments, other than securities | 8,533 | 120 | 16,049 | 7,262 | |||||||||||
Less applicable tax (expense) benefit | (2,986 | ) | (16 | ) | (4,567 | ) | (2,454 | ) | |||||||
Foreign exchange translation adjustments, other than securities, net of tax | 5,547 | 104 | 11,482 | 4,808 | |||||||||||
Pension adjustments: | |||||||||||||||
Amortization of pension costs | 3,108 | 2,551 | 9,326 | 7,654 | |||||||||||
Experience gain (loss) | — | — | 371 | 791 | |||||||||||
Pension adjustments | 3,108 | 2,551 | 9,697 | 8,445 | |||||||||||
Less applicable tax (expense) benefit | (1,087 | ) | (894 | ) | (3,393 | ) | (2,957 | ) | |||||||
Pension adjustments, net of tax | 2,021 | 1,657 | 6,304 | 5,488 | |||||||||||
Other comprehensive income (loss) | 54,742 | 153,669 | 461,728 | 910,879 | |||||||||||
Comprehensive income (loss) | $ | 208,076 | $ | 305,538 | $ | 888,876 | $ | 1,325,210 |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||
Balance at January 1, 2016 | $ | — | $ | 130,218 | $ | 482,284 | $ | 231,947 | $ | 3,614,369 | $ | (403,266 | ) | $ | 4,055,552 | |||||||||||||
Comprehensive income (loss) | 910,879 | 414,331 | 1,325,210 | |||||||||||||||||||||||||
Common dividends declared ($0.42 per share) | (50,410 | ) | (50,410 | ) | ||||||||||||||||||||||||
Acquisition of treasury stock | (311,356 | ) | (311,356 | ) | ||||||||||||||||||||||||
Stock-based compensation | 13,787 | (2,224 | ) | 8,771 | 20,334 | |||||||||||||||||||||||
Exercise of stock options | (42,040 | ) | 89,093 | 47,053 | ||||||||||||||||||||||||
Balance at September 30, 2016 | $ | — | $ | 130,218 | $ | 496,071 | $ | 1,142,826 | $ | 3,934,026 | $ | (616,758 | ) | $ | 5,086,383 | |||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | ||||||||||||||||||||||
Balance at January 1, 2017 | $ | — | $ | 127,218 | $ | 490,421 | $ | 577,574 | $ | 3,890,798 | $ | (519,150 | ) | $ | 4,566,861 | |||||||||||||
Comprehensive income (loss) | 461,728 | 427,148 | 888,876 | |||||||||||||||||||||||||
Common dividends declared ($0.45 per share) | (52,304 | ) | (52,304 | ) | ||||||||||||||||||||||||
Acquisition of treasury stock | (301,448 | ) | (301,448 | ) | ||||||||||||||||||||||||
Stock-based compensation | 17,965 | (606 | ) | 7,450 | 24,809 | |||||||||||||||||||||||
Exercise of stock options | (25,454 | ) | 66,345 | 40,891 | ||||||||||||||||||||||||
Balance at September 30, 2017 | $ | — | $ | 127,218 | $ | 508,386 | $ | 1,039,302 | $ | 4,239,582 | $ | (746,803 | ) | $ | 5,167,685 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash provided from operating activities | $ | 1,085,842 | $ | 971,926 | |||
Cash provided from (used for) investing activities: | |||||||
Investments sold or matured: | |||||||
Fixed maturities available for sale—sold | 52,951 | 75,299 | |||||
Fixed maturities available for sale—matured, called, and repaid | 306,132 | 178,873 | |||||
Other long-term investments | 3,523 | 466 | |||||
Total long-term investments sold or matured | 362,606 | 254,638 | |||||
Acquisition of investments: | |||||||
Fixed maturities—available for sale | (1,042,705 | ) | (910,090 | ) | |||
Other long-term investments | (16,775 | ) | (20,404 | ) | |||
Total investments acquired | (1,059,480 | ) | (930,494 | ) | |||
Net increase in policy loans | (15,343 | ) | (6,623 | ) | |||
Net (increase) decrease in short-term investments | 6,556 | (11,138 | ) | ||||
Net change in payable or receivable for securities | — | 94 | |||||
Additions to property and equipment | (13,451 | ) | (10,138 | ) | |||
Sale of other assets | 18 | 767 | |||||
Investment in low-income housing interests | (13,852 | ) | (16,126 | ) | |||
Cash provided from (used for) investing activities | (732,946 | ) | (719,020 | ) | |||
Cash provided from (used for) financing activities: | |||||||
Issuance of common stock | 40,891 | 47,053 | |||||
Cash dividends paid to shareholders | (51,532 | ) | (50,258 | ) | |||
Proceeds from issuance of debt | — | 400,000 | |||||
Payment for debt issuance costs | — | (9,638 | ) | ||||
Repayment of debt | (1,250 | ) | (250,000 | ) | |||
Net borrowing (repayment) of commercial paper | 42,652 | 25,266 | |||||
Acquisition of treasury stock | (301,448 | ) | (311,356 | ) | |||
Net receipts (payments) from deposit-type product | (65,912 | ) | (57,188 | ) | |||
Cash provided from (used for) financing activities | (336,599 | ) | (206,121 | ) | |||
Effect of foreign exchange rate changes on cash | (3,998 | ) | (3,268 | ) | |||
Net increase (decrease) in cash | 12,299 | 43,517 | |||||
Cash at beginning of year | 76,163 | 61,383 | |||||
Cash at end of period | $ | 88,462 | $ | 104,900 |
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Available for Sale Assets | Deferred Acquisition Costs | Foreign Exchange | Pension Adjustments | Total | ||||||||||||||||
Balance at July 1, 2017 | $ | 1,090,055 | $ | (7,655 | ) | $ | 10,902 | $ | (108,742 | ) | $ | 984,560 | ||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 55,160 | 328 | 5,547 | — | 61,035 | |||||||||||||||
Reclassifications, net of tax | (8,314 | ) | — | — | 2,021 | (6,293 | ) | |||||||||||||
Other comprehensive income (loss) | 46,846 | 328 | 5,547 | 2,021 | 54,742 | |||||||||||||||
Balance at September 30, 2017 | $ | 1,136,901 | $ | (7,327 | ) | $ | 16,449 | $ | (106,721 | ) | $ | 1,039,302 | ||||||||
Three Months Ended September 30, 2016 | ||||||||||||||||||||
Available for Sale Assets | Deferred Acquisition Costs | Foreign Exchange | Pension Adjustments | Total | ||||||||||||||||
Balance at July 1, 2016 | $ | 1,084,551 | $ | (8,658 | ) | $ | 8,331 | $ | (95,067 | ) | $ | 989,157 | ||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 154,389 | 405 | 104 | — | 154,898 | |||||||||||||||
Reclassifications, net of tax | (2,886 | ) | — | — | 1,657 | (1,229 | ) | |||||||||||||
Other comprehensive income (loss) | 151,503 | 405 | 104 | 1,657 | 153,669 | |||||||||||||||
Balance at September 30, 2016 | $ | 1,236,054 | $ | (8,253 | ) | $ | 8,435 | $ | (93,410 | ) | $ | 1,142,826 |
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Available for Sale Assets | Deferred Acquisition Costs | Foreign Exchange | Pension Adjustments | Total | ||||||||||||||||
Balance at January 1, 2017 | $ | 692,314 | $ | (6,682 | ) | $ | 4,967 | $ | (113,025 | ) | $ | 577,574 | ||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 453,455 | (645 | ) | 11,482 | 241 | 464,533 | ||||||||||||||
Reclassifications, net of tax | (8,868 | ) | — | — | 6,063 | (2,805 | ) | |||||||||||||
Other comprehensive income (loss) | 444,587 | (645 | ) | 11,482 | 6,304 | 461,728 | ||||||||||||||
Balance at September 30, 2017 | $ | 1,136,901 | $ | (7,327 | ) | $ | 16,449 | $ | (106,721 | ) | $ | 1,039,302 | ||||||||
Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Available for Sale Assets | Deferred Acquisition Costs | Foreign Exchange | Pension Adjustments | Total | ||||||||||||||||
Balance at January 1, 2016 | $ | 332,333 | $ | (5,115 | ) | $ | 3,627 | $ | (98,898 | ) | $ | 231,947 | ||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 911,069 | (3,138 | ) | 4,808 | 513 | 913,252 | ||||||||||||||
Reclassifications, net of tax | (7,348 | ) | — | — | 4,975 | (2,373 | ) | |||||||||||||
Other comprehensive income (loss) | 903,721 | (3,138 | ) | 4,808 | 5,488 | 910,879 | ||||||||||||||
Balance at September 30, 2016 | $ | 1,236,054 | $ | (8,253 | ) | $ | 8,435 | $ | (93,410 | ) | $ | 1,142,826 |
Three Months Ended September 30, | Nine Months Ended September 30, | Affected line items in the Statement of Operations | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Unrealized investment gains (losses) on available for sale assets: | ||||||||||||||||||
Realized (gains) losses | $ | (12,910 | ) | $ | (3,513 | ) | $ | (13,264 | ) | $ | (7,809 | ) | Realized gains (losses) | |||||
Amortization of (discount) premium | 119 | (927 | ) | (379 | ) | (3,495 | ) | Net investment income | ||||||||||
Total before tax | (12,791 | ) | (4,440 | ) | (13,643 | ) | (11,304 | ) | ||||||||||
Tax | 4,477 | 1,554 | 4,775 | 3,956 | Income taxes | |||||||||||||
Total after tax | (8,314 | ) | (2,886 | ) | (8,868 | ) | (7,348 | ) | ||||||||||
Pension adjustments: | ||||||||||||||||||
Amortization of prior service cost | 118 | 120 | 356 | 360 | Other operating expenses | |||||||||||||
Amortization of actuarial gain (loss) | 2,990 | 2,431 | 8,970 | 7,294 | Other operating expenses | |||||||||||||
Total before tax | 3,108 | 2,551 | 9,326 | 7,654 | ||||||||||||||
Tax | (1,087 | ) | (894 | ) | (3,263 | ) | (2,679 | ) | Income taxes | |||||||||
Total after tax | 2,021 | 1,657 | 6,063 | 4,975 | ||||||||||||||
Total reclassifications (after tax) | $ | (6,293 | ) | $ | (1,229 | ) | $ | (2,805 | ) | $ | (2,373 | ) |
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value(1) | % of Total Fixed Maturities(2) | |||||||||||||
Fixed maturities available for sale: | |||||||||||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 387,985 | $ | 12,800 | $ | (1,098 | ) | $ | 399,687 | 2 | |||||||
States, municipalities, and political subdivisions | 1,160,537 | 127,675 | (108 | ) | 1,288,104 | 8 | |||||||||||
Foreign governments | 20,939 | 1,607 | — | 22,546 | — | ||||||||||||
Corporates, by sector: | |||||||||||||||||
Financial | 3,199,469 | 426,345 | (25,880 | ) | 3,599,934 | 22 | |||||||||||
Utilities | 1,948,519 | 324,060 | (2,655 | ) | 2,269,924 | 14 | |||||||||||
Energy | 1,602,054 | 185,296 | (28,070 | ) | 1,759,280 | 11 | |||||||||||
Other corporate sectors | 6,025,262 | 666,120 | (22,670 | ) | 6,668,712 | 40 | |||||||||||
Total corporates | 12,775,304 | 1,601,821 | (79,275 | ) | 14,297,850 | 87 | |||||||||||
Collateralized debt obligations | 59,204 | 19,558 | (8,994 | ) | 69,768 | — | |||||||||||
Other asset-backed securities | 145,224 | 5,018 | (17 | ) | 150,225 | 1 | |||||||||||
Redeemable preferred stocks, by sector: | |||||||||||||||||
Financial | 336,822 | 60,159 | (3,030 | ) | 393,951 | 2 | |||||||||||
Utilities | 28,565 | 2,333 | (116 | ) | 30,782 | — | |||||||||||
Total redeemable preferred stocks | 365,387 | 62,492 | (3,146 | ) | 424,733 | 2 | |||||||||||
Total fixed maturities | $ | 14,914,580 | $ | 1,830,971 | $ | (92,638 | ) | $ | 16,652,913 | 100 |
September 30, 2017 | |||||||
Amortized Cost | Fair Value | ||||||
Fixed maturities available for sale: | |||||||
Due in one year or less | $ | 140,702 | $ | 143,863 | |||
Due after one year through five years | 660,487 | 705,847 | |||||
Due after five years through ten years | 1,430,894 | 1,604,091 | |||||
Due after ten years through twenty years | 4,397,807 | 5,084,516 | |||||
Due after twenty years | 8,079,191 | 8,893,450 | |||||
Mortgage-backed and asset-backed securities | 205,499 | 221,146 | |||||
$ | 14,914,580 | $ | 16,652,913 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Proceeds from sales | $ | 52,951 | $ | 24,000 | $ | 52,951 | $ | 75,299 | |||||||
Gross realized gains | 4,851 | 2,577 | 4,851 | 6,133 | |||||||||||
Gross realized losses | — | — | — | (214 | ) |
Fair Value Measurements at September 30, 2017 using: | ||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
Bonds: | ||||||||||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | — | $ | 399,687 | $ | — | $ | 399,687 | ||||||||
States, municipalities, and political subdivisions | 39,100 | 1,249,004 | — | 1,288,104 | ||||||||||||
Foreign governments | — | 22,546 | — | 22,546 | ||||||||||||
Corporates, by sector: | ||||||||||||||||
Financial | — | 3,537,728 | 62,206 | 3,599,934 | ||||||||||||
Utilities | — | 2,114,600 | 155,324 | 2,269,924 | ||||||||||||
Energy | — | 1,717,538 | 41,742 | 1,759,280 | ||||||||||||
Other corporate sectors | 3,225 | 6,340,276 | 325,211 | 6,668,712 | ||||||||||||
Total corporates | 3,225 | 13,710,142 | 584,483 | 14,297,850 | ||||||||||||
Collateralized debt obligations | — | — | 69,768 | 69,768 | ||||||||||||
Other asset-backed securities | — | 135,842 | 14,383 | 150,225 | ||||||||||||
Redeemable preferred stocks, by sector: | ||||||||||||||||
Financial | — | 393,951 | — | 393,951 | ||||||||||||
Utilities | — | 30,782 | — | 30,782 | ||||||||||||
Total redeemable preferred stocks | — | 424,733 | — | 424,733 | ||||||||||||
Total fixed maturities | $ | 42,325 | $ | 15,941,954 | $ | 668,634 | $ | 16,652,913 | ||||||||
Percent of total | 0.3 | % | 95.7 | % | 4.0 | % | 100.0 | % |
Nine Months Ended September 30, 2017 | |||||||||||||||
Asset- Backed Securities | Collateralized Debt Obligations | Corporates(1) | Total | ||||||||||||
Balance at January 1, 2017 | $ | — | $ | 63,503 | $ | 559,600 | $ | 623,103 | |||||||
Total gains or losses: | |||||||||||||||
Included in realized gains/losses | — | — | — | — | |||||||||||
Included in other comprehensive income | 595 | 7,787 | 10,614 | 18,996 | |||||||||||
Acquisitions | 14,000 | — | 21,666 | 35,666 | |||||||||||
Sales | — | — | — | — | |||||||||||
Amortization | — | 3,705 | 14 | 3,719 | |||||||||||
Other(2) | (212 | ) | (5,227 | ) | (7,411 | ) | (12,850 | ) | |||||||
Transfers in and/or out of Level 3(3) | — | — | — | — | |||||||||||
Balance at September 30, 2017 | $ | 14,383 | $ | 69,768 | $ | 584,483 | $ | 668,634 | |||||||
Percent of total fixed maturities | 0.1 | % | 0.4 | % | 3.5 | % | 4.0 | % | |||||||
Nine Months Ended September 30, 2016 | |||||||||||||||
Asset- Backed Securities | Collateralized Debt Obligations | Corporates(1) | Total | ||||||||||||
Balance at January 1, 2016 | $ | — | $ | 70,382 | $ | 530,806 | $ | 601,188 | |||||||
Total gains or losses: | |||||||||||||||
Included in realized gains/losses | — | — | 788 | 788 | |||||||||||
Included in other comprehensive income | — | (3,879 | ) | 33,365 | 29,486 | ||||||||||
Acquisitions | — | — | 33,662 | 33,662 | |||||||||||
Sales | — | — | — | — | |||||||||||
Amortization | — | 3,511 | 14 | 3,525 | |||||||||||
Other(2) | — | (6,732 | ) | (10,882 | ) | (17,614 | ) | ||||||||
Transfers in and/or out of Level 3(3) | — | — | — | — | |||||||||||
Balance at September 30, 2016 | $ | — | $ | 63,282 | $ | 587,753 | $ | 651,035 | |||||||
Percent of total fixed maturities | — | % | 0.4 | % | 3.7 | % | 4.1 | % |
Less than Twelve Months | Twelve Months or Longer | Total | |||||||
Number of issues (CUSIP numbers) held: | |||||||||
As of September 30, 2017 | 151 | 109 | 260 | ||||||
As of December 31, 2016 | 407 | 94 | 501 |
Less than Twelve Months | Twelve Months or Longer | Total | ||||||||||||||||||||||
Description of Securities | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
Investment grade securities: | ||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 97,370 | $ | (610 | ) | $ | 5,422 | $ | (488 | ) | $ | 102,792 | $ | (1,098 | ) | |||||||||
States, municipalities and political subdivisions | 10,115 | (70 | ) | 691 | (2 | ) | 10,806 | (72 | ) | |||||||||||||||
Corporates, by sector: | ||||||||||||||||||||||||
Financial | 94,944 | (1,024 | ) | 65,729 | (2,271 | ) | 160,673 | (3,295 | ) | |||||||||||||||
Utilities | 101,687 | (1,643 | ) | 40,075 | (1,012 | ) | 141,762 | (2,655 | ) | |||||||||||||||
Energy | 37,009 | (512 | ) | 93,841 | (6,555 | ) | 130,850 | (7,067 | ) | |||||||||||||||
Other corporate sectors | 369,323 | (6,254 | ) | 247,324 | (11,047 | ) | 616,647 | (17,301 | ) | |||||||||||||||
Total corporates | 602,963 | (9,433 | ) | 446,969 | (20,885 | ) | 1,049,932 | (30,318 | ) | |||||||||||||||
Other asset-backed securities | 9,983 | (17 | ) | — | — | 9,983 | (17 | ) | ||||||||||||||||
Redeemable preferred stocks, by sector: | ||||||||||||||||||||||||
Utilities | 5,947 | (116 | ) | — | — | 5,947 | (116 | ) | ||||||||||||||||
Total redeemable preferred stocks | 5,947 | (116 | ) | — | — | 5,947 | (116 | ) | ||||||||||||||||
Total investment grade securities | 726,378 | (10,246 | ) | 453,082 | (21,375 | ) | 1,179,460 | (31,621 | ) | |||||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||
States, municipalities and political subdivisions | 269 | (36 | ) | — | — | 269 | (36 | ) | ||||||||||||||||
Corporates, by sector: | ||||||||||||||||||||||||
Financial | — | — | 83,164 | (22,585 | ) | 83,164 | (22,585 | ) | ||||||||||||||||
Energy | — | — | 78,721 | (21,003 | ) | 78,721 | (21,003 | ) | ||||||||||||||||
Other corporate sectors | — | — | 45,330 | (5,369 | ) | 45,330 | (5,369 | ) | ||||||||||||||||
Total corporates | — | — | 207,215 | (48,957 | ) | 207,215 | (48,957 | ) | ||||||||||||||||
Collateralized debt obligations | — | — | 11,006 | (8,994 | ) | 11,006 | (8,994 | ) | ||||||||||||||||
Redeemable preferred stocks, by sector: | ||||||||||||||||||||||||
Financial | — | — | 24,080 | (3,030 | ) | 24,080 | (3,030 | ) | ||||||||||||||||
Total redeemable preferred stocks | — | — | 24,080 | (3,030 | ) | 24,080 | (3,030 | ) | ||||||||||||||||
Total below investment grade securities | 269 | (36 | ) | 242,301 | (60,981 | ) | 242,570 | (61,017 | ) | |||||||||||||||
Total fixed maturities | $ | 726,647 | $ | (10,282 | ) | $ | 695,383 | $ | (82,356 | ) | $ | 1,422,030 | $ | (92,638 | ) |
September 30, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Due premiums | $ | 3,945 | $ | 8,840 | |||
Other receivables(1) | 64,627 | 118,692 | |||||
Total assets related to discontinued operations | 68,572 | 127,532 | |||||
Liabilities: | |||||||
Risk sharing payable | 9,065 | 8,374 | |||||
Current and deferred income taxes payable | 1,630 | 3,820 | |||||
Other(2) | 38,633 | 15,230 | |||||
Total liabilities related to discontinued operations | 49,328 | 27,424 | |||||
Net assets | $ | 19,244 | $ | 100,108 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue: | |||||||||||||||
Health premium | $ | (48 | ) | $ | 53,632 | $ | (343 | ) |