Condensed Financial Information of Parent Company Only Disclosure

12 Months Ended

Dec. 31, 2019

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,
		2019		2018
ASSETS:
Cash and cash equivalents	$	895	$	2,700
Securities purchased under agreements to resell		39,438		-
Fixed maturities, available-for-sale		3,260		38,270
Investments in consolidated subsidiaries		428,014		456,304
Income tax receivable		9,307		-
Deferred tax asset, net		1,517		-
Other assets		461		281
TOTAL ASSETS	$	482,892	$	497,555
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and other liabilities	$	11,491	$	10,005
Amounts due to consolidated subsidiaries, net		6,449		25,035
Income taxes payable		-		6,645
Dividends payable		3,003		2,256
TOTAL LIABILITIES		20,943		43,941
Redeemable noncontrolling interest		2,237		2,183
STOCKHOLDERS' EQUITY:
Preferred stock (none issued)(A)		-		-
Common stock (B)		18,625		18,625
Paid-in capital		122,717		124,395
Accumulated other comprehensive loss		1,212		(8,310)
Treasury stock, at cost (C)		(69,724)		(66,392)
Retained earnings		386,864		380,431
TOTAL IHC’S STOCKHOLDERS' EQUITY		459,694		448,749
NONREDEEMABLE NONCONTROLLING INTERESTS		18		2,682
TOTAL EQUITY		459,712		451,431
TOTAL LIABILITIES AND EQUITY	$	482,892	$	497,555

(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 shares issued 14,864,941 and 14,878,248 shares outstanding, respectively. 

(C)Treasury stock, at cost; 3,760,517 and 3,747,210 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)
		2019		2018
REVENUES:
Net investment income	$	738	$	547
Net investment gains (losses)		130		(28)
Other income		1,461		1,598
		2,329		2,117
EXPENSES:
General and administrative expenses		9,352		7,922
		9,352		7,922
Loss before income tax benefits and equity in net income of subsidiaries		(7,023)		(5,805)
Equity in net income of subsidiaries		19,061		32,459
Income before income tax benefits		12,038		26,654
Income tax (benefits)		(651)		(2,399)
Net income		12,689		29,053
Less income from noncontrolling interests in subsidiaries		(293)		(571)
Net income attributable to IHC	$	12,396	$	28,482
Comprehensive Income:
Net income	$	12,689	$	29,053
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on available-for-sale securities		164		(130)
Equity in unrealized gains (losses) on available-for-sale
securities of subsidiaries		9,358		(3,232)
Other comprehensive income (loss), net of tax		9,522		(3,362)
Comprehensive income, net of tax		22,211		25,691
Less: comprehensive income attributable to noncontrolling interests		(293)		(571)
Comprehensive income, net of tax, attributable to IHC	$	21,918	$	25,120

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)
		2019		2018
CASH FLOWS PROVIDED BY (USED BY)
OPERATING ACTIVITIES:
Net income	$	12,689	$	29,053
Adjustments to net income:
Equity in net income of subsidiaries		(19,061)		(32,459)
Other		3,247		2,465
Change in current income tax liability(A)		(17,793)		3,221
Changes in other assets and liabilities		(48)		(660)
Net change in cash from operating activities		(20,966)		1,620
CASH FLOWS PROVIDED BY (USED BY)
INVESTING ACTIVITIES:
Change in investments in and advances to subsidiaries (B)		34,544		17,779
Net purchases of securities under agreements to resell		(39,438)		-
Purchases of fixed maturities		(1,154)		(16,000)
Sales of fixed maturities		8,432		4,469
Maturities and other repayments of fixed maturities		28,193		429
Net change in cash  from investing activities		30,577		6,677
CASH FLOWS PROVIDED BY (USED BY)
FINANCING ACTIVITIES:
Repurchases of common stock		(4,057)		(4,140)
Dividends paid		(5,231)		(3,712)
Proceeds from stock options exercised		269		856
Payments related to tax withholdings for share-based compensation		(2,397)		(905)
Net change in cash from financing activities		(11,416)		(7,901)
Net change in cash and cash equivalents		(1,805)		396
Cash and cash equivalents, beginning of year(C)		2,700		2,304
Cash and cash equivalents, end of year(B)	$	895	$	2,700

(A)Includes net (payments) receipts for income taxes of $(17,086,000) and $5,778,000 to and from consolidated subsidiaries in accordance with tax sharing agreements during the years ended December 31, 2019 and 2018, respectively. 

(B)Includes $53,129,000 and $17,833,000 of cash dividends paid to parent company by consolidated subsidiaries for the years ended December 31, 2019 and 2018, respectively. 

(C)The parent company has no restricted cash at December 31, 2019 and 2018.  

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