Condensed Financial Information of Parent Company Only Disclosure

12 Months Ended

Dec. 31, 2016

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,
		2016		2015
ASSETS:
Cash and cash equivalents	$	3,667	$	512
Short-term investments		3,500		-
Trading securities		-		620
Fixed maturities, available-for-sale		48,819		24,549
Other  investments, at cost		-		1,146
Investments in consolidated subsidiaries		425,677		355,799
Other assets		408		359
Assets attributable to discontinued operations (Note 3)		-		13,037
TOTAL ASSETS	$	482,071	$	396,022
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and other liabilities	$	8,732	$	8,182
Amounts due to consolidated subsidiaries, net		28,697		12,417
Income taxes payable		4,236		3,674
Junior subordinated debt securities		-		38,146
Dividends payable		1,082		809
Liabilities attributable to discontinued operations (Note 3)		68		90
TOTAL LIABILITIES		42,815		63,318
STOCKHOLDERS' EQUITY:
Preferred stock (none issued)(A)		-		-
Common stock (B)		18,620		18,569
Paid-in capital		126,468		127,733
Accumulated other comprehensive loss		(6,964)		(3,440)
Treasury stock, at cost (C)		(17,483)		(13,961)
Retained earnings		315,918		194,450
TOTAL IHC’S STOCKHOLDERS' EQUITY		436,559		323,351
NONCONTROLLING INTERESTS IN SUBSIDIARIES		2,697		9,353
TOTAL EQUITY		439,256		332,704
TOTAL LIABILITIES AND EQUITY	$	482,071	$	396,022

(A)    Preferred stock $1.00 par value, 100,000 shares authorized; none issued or outstanding.

(B)    Common stock $1.00 par value, 23,000,000 shares authorized; 18,620,508 and 18,569,183 shares issued, respectively, 17,102,525 and 17,265,758 shares outstanding, respectively.

(C)    Treasury stock, at cost; 1,517,983 and 1,303,425 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 thereto.

SCHEDULE II
(Continued)
INDEPENDENCE HOLDING COMPANY
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands)
(PARENT COMPANY ONLY)
		2016		2015		2014
REVENUES:
Net investment income	$	146	$	112	$	112
Net realized investment losses		(121)		(506)		(78)
Other income		1,619		1,800		2,129
		1,644		1,406		2,163
EXPENSES:
Interest expense on debt		1,443		1,567		1,546
General and administrative expenses		8,837		5,506		5,606
		10,280		7,073		7,152
Loss from continuing operations before income tax benefits and
equity in net income from continuing operations of subsidiaries		(8,636)		(5,667)		(4,989)
Equity in net income from continuing operations of subsidiaries		28,843		32,118		17,564
Income from continuing operations before income tax benefits		20,207		26,451		12,575
Income tax (benefits)		(2,303)		(1,523)		(2,446)
Income from continuing operations, net of tax		22,510		27,974		15,021
Discontinued operations (Note 3):
Income from discontinued operations, before income taxes		117,617		4,310		2,183
Income taxes on discontinued operations		6,813		1,762		283
Income from discontinued operations, net of tax		110,804		2,548		1,900
Net income		133,314		30,522		16,921
Less income from noncontrolling interests in subsidiaries		(10,016)		(578)		(628)
Net income attributable to IHC		123,298		29,944		16,293
Comprehensive Income:
Net income		133,314		30,522		16,921
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on available-for-sale securities		114		(51)		16
Equity in unrealized gains (losses) on available-for-sale
securities of subsidiaries		(3,622)		(3,411)		10,677
Other comprehensive income (loss), net of tax		(3,508)		(3,462)		10,693
Comprehensive income, net of tax		129,806		27,060		27,614
Less: comprehensive income attributable to noncontrolling interests		(10,134)		(583)		(827)
Comprehensive income, net of tax, attributable to IHC	$	119,672	$	26,477	$	26,787

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)
		2016		2015		2014
CASH FLOWS PROVIDED BY (USED BY)
OPERATING ACTIVITIES:
Net income	$	133,314	$	30,522	$	16,921
Adjustments to net income:
Gain on disposal of discontinued operations, net of tax		(110,337)		-		-
Equity in net income of subsidiaries, including discontinued operations		(28,843)		(34,698)		(19,521)
Other		3,396		9,204		3,748
Changes in other assets and liabilities		(1,939)		550		440
Net change in cash from operating activities		(4,409)		5,578		1,588
CASH FLOWS PROVIDED BY (USED BY)
INVESTING ACTIVITIES:
Change in investments in and advances to subsidiaries		81,762		12,398		11,138
Net purchases of short-term investments		(3,501)		-		-
Purchases of fixed maturities		(94,850)		(20,857)		(9,953)
Sales of fixed maturities		70,745		5,915		2,751
Other investing activities		(2,995)		-		-
Net change in cash  from investing activities		51,161		(2,544)		3,936
CASH FLOWS PROVIDED BY (USED BY)
FINANCING ACTIVITIES:
Repurchases of common stock		(3,925)		(1,820)		(3,972)
Cash paid in acquisitions of noncontrolling interests		(486)		-		-
Repayments of debt		(38,146)
Dividends paid		(1,553)		(1,392)		(1,233)
Other financing activities		513		301		9
Net change in cash from financing activities		(43,597)		(2,911)		(5,196)
Net change in cash and cash equivalents		3,155		123		328
Cash and cash equivalents, beginning of year		512		389		61
Cash and cash equivalents, end of year	$	3,667	$	512	$	389

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