Condensed Financial Information of Parent Company Only Disclosure

12 Months Ended

Dec. 31, 2017

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,
		2017		2016
ASSETS:
Cash and cash equivalents	$	2,304	$	3,667
Short-term investments		-		3,500
Fixed maturities, available-for-sale		27,270		48,819
Investments in consolidated subsidiaries		445,697		425,677
Other assets		235		408
TOTAL ASSETS	$	475,506	$	482,071
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and other liabilities	$	8,886	$	8,732
Amounts due to consolidated subsidiaries, net		25,318		28,697
Income taxes payable		3,411		4,236
Dividends payable		1,583		1,082
Liabilities attributable to discontinued operations		-		68
TOTAL LIABILITIES		39,198		42,815
Redeemable noncontrolling interest		2,065		-
STOCKHOLDERS' EQUITY:
Preferred stock (none issued)(A)		-		-
Common stock (B)		18,625		18,620
Paid-in capital		124,538		126,468
Accumulated other comprehensive loss		(4,598)		(6,964)
Treasury stock, at cost (C)		(63,404)		(17,483)
Retained earnings		356,383		315,918
TOTAL IHC’S STOCKHOLDERS' EQUITY		431,544		436,559
NONREDEEMABLE NONCONTROLLING INTERESTS		2,699		2,697
TOTAL EQUITY		434,243		439,256
TOTAL LIABILITIES AND EQUITY	$	475,506	$	482,071

(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; 18,625,458 and 18,620,508 shares issued, respectively, 14,890,285 and 17,102,525 shares outstanding, respectively. 

(C)Treasury stock, at cost; 3,735,173 and 1,517,983 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)
		2017		2016		2015
REVENUES:
Net investment income	$	576	$	146	$	112
Net realized investment gains (losses)		189		(121)		(506)
Other income		1,533		1,619		1,800
		2,298		1,644		1,406
EXPENSES:
Interest expense on debt		-		1,443		1,567
General and administrative expenses		7,675		8,837		5,506
		7,675		10,280		7,073
Loss from continuing operations before income tax benefits and
equity in net income from continuing operations of subsidiaries		(5,377)		(8,636)		(5,667)
Equity in net income from continuing operations of subsidiaries		44,854		28,843		32,118
Income from continuing operations before income tax benefits		39,477		20,207		26,451
Income tax (benefits)		(2,653)		(2,303)		(1,523)
Income from continuing operations, net of tax		42,130		22,510		27,974
Discontinued operations (Note 3):
Income from discontinued operations, before income taxes		-		117,617		4,310
Income taxes on discontinued operations		-		6,813		1,762
Income from discontinued operations, net of tax		-		110,804		2,548
Net income		42,130		133,314		30,522
Less income from noncontrolling interests in subsidiaries		(88)		(10,016)		(578)
Net income attributable to IHC		42,042		123,298		29,944
Comprehensive Income:
Net income		42,130		133,314		30,522
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on available-for-sale securities		73		114		(51)
Equity in unrealized gains (losses) on available-for-sale
securities of subsidiaries		3,108		(3,622)		(3,411)
Other comprehensive income (loss), net of tax		3,181		(3,508)		(3,462)
Comprehensive income, net of tax		45,311		129,806		27,060
Less: comprehensive income attributable to noncontrolling interests		(88)		(10,134)		(583)
Comprehensive income, net of tax, attributable to IHC	$	45,223	$	119,672	$	26,477

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)
		2017		2016		2015
CASH FLOWS PROVIDED BY (USED BY)
OPERATING ACTIVITIES:
Net income	$	42,130	$	133,314	$	30,522
Adjustments to net income:
Gain on disposal of discontinued operations, net of tax		-		(110,337)		-
Equity in net income of subsidiaries, including discontinued operations		(44,854)		(28,843)		(34,698)
Other		2,521		3,396		9,204
Changes in other assets and liabilities		(3,121)		(1,939)		550
Net change in cash from operating activities		(3,324)		(4,409)		5,578
CASH FLOWS PROVIDED BY (USED BY)
INVESTING ACTIVITIES:
Change in investments in and advances to subsidiaries (A)		26,847		81,762		12,398
Net (purchases) sales and maturities of short-term investments		3,499		(3,501)		-
Purchases of fixed maturities		(46,605)		(94,850)		(20,857)
Sales of fixed maturities		63,568		70,745		5,915
Maturities and other repayments of fixed maturities		4,640		-		-
Other investing activities		-		(2,995)		-
Net change in cash  from investing activities		51,949		51,161		(2,544)
CASH FLOWS PROVIDED BY (USED BY)
FINANCING ACTIVITIES:
Repurchases of common stock		(46,401)		(3,925)		(1,820)
Cash paid in acquisitions of noncontrolling interests		-		(486)		-
Repayments of debt		-		(38,146)		-
Dividends paid		(1,928)		(1,553)		(1,392)
Payments related to tax withholding for sharebased compensation		(1,659)		-		-
Other financing activities		-		513		301
Net change in cash from financing activities		(49,988)		(43,597)		(2,911)
Net change in cash and cash equivalents		(1,363)		3,155		123
Cash and cash equivalents, beginning of year		3,667		512		389
Cash and cash equivalents, end of year	$	2,304	$	3,667	$	512

(A)Includes $12,100,000, $29,800,000 and $0 of cash dividends paid to parent company by consolidated subsidiaries for the years ended December 31, 2017, 2016 and 2015, respectively. 

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