Condensed Financial Information of Parent Company Only Disclosure

12 Months Ended

Dec. 31, 2015

Notes

Condensed Financial Information of Parent Company Only Disclosure

SCHEDULE II
INDEPENDENCE HOLDING COMPANY
CONDENSED BALANCE SHEETS (In thousands, except share data)
(PARENT COMPANY ONLY)
		DECEMBER 31,
		2015		2014
ASSETS:
Cash and cash equivalents	$	512	$	389
Fixed maturities, available-for-sale		24,549		9,647
Trading securities		620		1,916
Other investments		1,146		1,146
Investments in consolidated subsidiaries		368,836		395,780
Deferred tax assets, net		3,730		11,414
Goodwill		228		228
Other assets		131		97
TOTAL ASSETS	$	399,752	$	420,617
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and other liabilities	$	8,182	$	7,140
Amounts due to consolidated subsidiaries, net		12,417		57,220
Income taxes payable		7,494		7,871
Junior subordinated debt securities		38,146		38,146
Dividends payable		809		628
TOTAL LIABILITIES		67,048		111,005
STOCKHOLDERS' EQUITY:
Preferred stock (none issued)		-		-
Common stock (A)		18,569		18,531
Paid-in capital		127,733		127,098
Accumulated other comprehensive income (loss)		(3,440)		22
Treasury stock, at cost (B)		(13,961)		(12,141)
Retained earnings		194,450		166,177
TOTAL IHC’S STOCKHOLDERS' EQUITY		323,351		299,687
NONCONTROLLING INTERESTS IN SUBSIDIARIES		9,353		9,925
TOTAL EQUITY		332,704		309,612
TOTAL LIABILITIES AND EQUITY	$	399,752	$	420,617

(A)    Common stock $1.00 par value, 23,000,000 shares authorized; 18,569,183 and 18,531,158 shares issued, respectively, 17,265,758 and 17,371,040 shares outstanding, respectively.

(B)    Treasury stock, at cost; 1,303,425 and 1,160,118 shares, respectively, outstanding.

(C)    Investments in consolidated subsidiaries and retained earnings balances at December 31, 2014 have been revised to reflect an immaterial error correction related to deferred tax assets and liabilities. For further discussion of this error refer to Note 1 of the Notes to Consolidated Financial Statements.

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)
		2015		2014		2013
REVENUES:
Net investment income	$	112	$	112	$	61
Net realized investment gains (losses)		(506)		(78)		349
Other income		1,800		2,129		2,327
		1,406		2,163		2,737
EXPENSES:
Interest expense on debt		1,567		1,546		1,563
General and administrative expenses		5,506		5,606		4,301
		7,073		7,152		5,864
Loss before tax benefit and equity in net income of subsidiaries		(5,667)		(4,989)		(3,127)
Income taxes (benefits)		(1,491)		(2,389)		(1,228)
Equity in net income of subsidiaries		34,698		19,521		17,155
Net income		30,522		16,921		15,256
Less income from noncontrolling interests in
subsidiaries		(578)		(628)		(1,477)
Net income attributable to IHC	$	29,944	$	16,293	$	13,779

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)
		2015		2014		2013
CASH FLOWS PROVIDED BY (USED BY)
OPERATING ACTIVITIES:
Net income	$	30,522	$	16,921	$	15,256
Adjustments to net income:
Equity in net income of subsidiaries		(34,698)		(19,521)		(17,155)
Other		9,204		3,748		4,398
Changes in other assets and liabilities		550		440		(1,609)
Net change in cash from operating activities		5,578		1,588		890
CASH FLOWS PROVIDED BY (USED BY)
INVESTING ACTIVITIES:
Change in investments in and advances to subsidiaries		12,398		11,138		6,708
Purchases of fixed maturities		(20,857)		(9,953)		-
Sales of fixed maturities		5,915		2,751		3,260
Net change in cash  from investing activities		(2,544)		3,936		9,968
CASH FLOWS PROVIDED BY (USED BY)
FINANCING ACTIVITIES:
Repurchases of common stock		(1,820)		(3,972)		(3,636)
Cash paid in acquisitions of noncontrolling interests		-		-		(7,626)
Dividends paid		(1,392)		(1,233)		(620)
Other financing activities		301		9		496
Net change in cash from financing activities		(2,911)		(5,196)		(11,386)
Net change in cash and cash equivalents		123		328		(528)
Cash and cash equivalents, beginning of year		389		61		589
Cash and cash equivalents, end of year	$	512	$	389	$	61

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