Condensed Financial Information of Parent Company Only

12 Months Ended

Dec. 31, 2013

Notes

Condensed Financial Information of Parent Company Only

SCHEDULE II
INDEPENDENCE HOLDING COMPANY
CONDENSED BALANCE SHEETS (In thousands, except share data)
(PARENT COMPANY ONLY)
		DECEMBER 31,
		2013		2012
ASSETS:
Cash and cash equivalents	$	61	$	589
Fixed maturities, available-for-sale		2,406		5,667
Trading securities		944		-
Other investments		1,146		1,146
Investments in consolidated subsidiaries		356,378		365,235
Taxes receivable		13,347		17,356
Goodwill		228		228
Other assets		69		426
TOTAL ASSETS	$	374,579	$	390,647
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and other liabilities	$	6,403	$	6,692
Amounts due to consolidated subsidiaries, net		45,000		36,155
Income taxes payable		6,096		6,807
Junior subordinated debt securities		38,146		38,146
Dividends payable		628		-
TOTAL LIABILITIES		96,273		87,800
STOCKHOLDERS' EQUITY:
Preferred stock (none issued)		-		-
Common stock (A)		18,524		18,462
Paid-in capital		126,239		126,589
Accumulated other comprehensive income (loss)		(10,472)		15,013
Treasury stock, at cost (B)		(8,169)		(4,533)
Retained earnings		142,669		130,153
TOTAL IHC’S STOCKHOLDERS' EQUITY		268,791		285,684
NONCONTROLLING INTERESTS IN SUBSIDIARIES		9,515		17,163
TOTAL EQUITY		278,306		302,847
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	374,579	$	390,647

(A)    Common stock $1.00 par value, 23,000,000 shares authorized; 18,523,733 and 18,461,992 shares issued, respectively, 17,660,390 and 17,932,954 shares outstanding, respectively.

(B)    Treasury stock, at cost; 863,343 and 529,038 shares, respectively, outstanding.

The financial information of Independence Holding Company (Parent Company Only) should be read in conjunction with the Consolidated Financial Statements and Notes.

SCHEDULE II
(Continued)
INDEPENDENCE HOLDING COMPANY
CONDENSED STATEMENTS OF INCOME (In thousands)
(PARENT COMPANY ONLY)
		2013		2012		2011
REVENUES:
Net investment income	$	61	$	491	$	929
Net realized investment gains		349		2		23
Other income		2,327		2,251		3,138
		2,737		2,744		4,090
EXPENSES:
Interest expense on debt		1,563		1,638		1,575
General and administrative expenses		4,301		5,125		4,088
		5,864		6,763		5,663
Loss before tax benefit and equity in net income of subsidiaries		(3,127)		(4,019)		(1,573)
Income tax benefit		(1,228)		(1,528)		(563)
Equity in net income of subsidiaries		17,155		25,102		15,776
Net income		15,256		22,611		14,766
Less income from noncontrolling interests in
subsidiaries		(1,477)		(2,950)		(1,763)
Net income attributable to IHC	$	13,779	$	19,661	$	13,003

The financial information of Independence Holding Company (Parent Company Only) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.

SCHEDULE II
(Continued)
INDEPENDENCE HOLDING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (In thousands)
(PARENT COMPANY ONLY)
		2013		2012		2011
CASH FLOWS PROVIDED BY (USED BY)
OPERATING ACTIVITIES:
Net income	$	15,256	$	22,611	$	14,766
Adjustments to net income:
Equity in net income of subsidiaries		(17,155)		(25,102)		(15,776)
Other		4,398		604		(1,470)
Changes in other assets and liabilities		(1,609)		(439)		1,828
Net change in cash from operating activities		890		(2,326)		(652)
CASH FLOWS PROVIDED BY (USED BY)
INVESTING ACTIVITIES:
Change in investments in and advances to subsidiaries		6,708		5,109		2,264
Purchases of fixed maturities		-		(11,781)		(497)
Sales of fixed maturities		3,260		6,109		1,271
Change in other  investments		-		3,152		2,025
Net change in cash  from investing activities		9,968		2,589		5,063
CASH FLOWS PROVIDED BY (USED BY)
FINANCING ACTIVITIES:
Repurchases of common stock		(3,636)		(941)		(911)
Cash paid in acquisitions of noncontrolling interests		(7,626)		(58)		(62)
Dividends paid		(620)		(1,681)		(777)
Proceeds from exercise of stock options		430		-		-
Other financing activities		66		(92)		(164)
Net change in cash from financing activities		(11,386)		(2,772)		(1,914)
Net change in cash and cash equivalents		(528)		(2,509)		2,497
Cash and cash equivalents, beginning of year		589		3,098		601
Cash and cash equivalents, end of year	$	61	$	589	$	3,098

The financial information of Independence Holding Company (Parent Company Only) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.