SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2018

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

SCHEDULE II - Condensed Financial Information of Registrant Condensed Balance Sheets Parent Company Only
	December 31,
(In thousands)	2018			2017
ASSETS
Fixed income, available-for-sale, at fair value (amortized cost, 2018 – $203,743; 2017 – $195,846)	$	201,507		$	194,061
Cash and cash equivalents	46,502			22,247
Investment in subsidiaries, at equity in net assets	3,981,970			3,567,034
Accounts receivable - affiliates	1,396			1,414
Income taxes - current and deferred	186,561			192,570
Accrued investment income	2,020			1,941
Other assets	740			1,275
Total assets	$	4,420,696		$	3,980,542
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Senior notes	$	419,713		$	418,560
Convertible junior subordinated debentures	389,522			389,522
Accrued interest	17,930			17,934
Other liabilities	11,640			—
Total liabilities	838,805			826,016
Shareholders’ equity:
Common stock, (one dollar par value, shares authorized 1,000,000; shares issued 2018 – 371,353; 2017 – 370,567; outstanding 2018 – 355,371; 2017 – 370,567)	371,353			370,567
Paid-in capital	1,862,536			1,850,582
Treasury stock (shares at cost 2018 – 15,982)	(175,059		)	—
Accumulated other comprehensive loss, net of tax	(124,214		)	(43,783		)
Retained earnings	1,647,275			977,160
Total shareholders’ equity	3,581,891			3,154,526
Total liabilities and shareholders’ equity	$	4,420,696		$	3,980,542

See accompanying supplementary notes to Parent Company condensed financial statements.

MGIC INVESTMENT CORPORATION

SCHEDULE II - Condensed Financial Information of Registrant Condensed Statements of Operations Parent Company Only
	Years Ended December 31,
(In thousands)	2018			2017			2016
Revenues:
Investment income, net of expenses	$	4,685		$	3,177		$	3,807
Net realized investment (losses) gains	(532		)	(13		)	646
Total revenues	4,153			3,164			4,453
Expenses:
Operating expenses	637			642			1,409
Interest expense	61,930			65,972			64,598
Loss on debt extinguishment	—			65			82,234
Total expenses	62,567			66,679			148,241
Loss before tax	(58,414		)	(63,515		)	(143,788		)
(Benefit from) provision for income taxes	(13,517		)	95,517			(52,575		)
Equity in net income of subsidiaries	714,994			514,793			433,730
Net income	670,097			355,761			342,517
Other comprehensive (loss) income, net of tax	(80,413		)	41,739			(14,220		)
Comprehensive income	$	589,684		$	397,500		$	328,297

See accompanying supplementary notes to Parent Company condensed financial statements.

MGIC INVESTMENT CORPORATION

SCHEDULE II - Condensed Financial Information of Registrant Condensed Statements of Cash Flows Parent Company Only
	Years Ended December 31,
(In thousands)	2018			2017			2016
Cash flows from operating activities:
Net income	$	670,097		$	355,761		$	342,517
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries	(714,994		)	(514,793		)	(433,730		)
Dividends received from subsidiaries	199,692			110,145			64,000
Deferred tax (benefit) expense	(11,756		)	96,741			(55,988		)
Loss on debt extinguishment	—			65			82,234
Other	24,303			18,716			16,722
Change in certain assets and liabilities:
Accounts receivable - affiliates	18			(634		)	158
Income taxes receivable	17,859			297			3,602
Accrued investment income	112			(192		)	1,951
Accrued interest	(4		)	(2,819		)	6,811
Net cash provided by operating activities	185,327			63,287			28,277
Cash flows from investing activities:
Capital distributions from subsidiaries	—			—			51,987
Capital contributions to subsidiaries	—			—			(36,025		)
Purchases of investments	(83,003		)	(97,091		)	(194,751		)
Proceeds from sales of investments	93,481			176,960			330,142
Net cash provided by investing activities	10,478			79,869			151,353
Cash flows from financing activities:
Proceeds from revolving credit facility	—			150,000			—
Repayment of revolving credit facility	—			(150,000		)	—
Net proceeds from issuance of long-term debt	—			—			418,094
Repurchase of convertible senior notes	—			(150,124		)	(426,191		)
Repurchase of common stock	(163,419		)	—			(147,127		)
Payment of debt issuance costs	—			(1,630		)	(1,127		)
Payment of withholding taxes related to share-based compensation net share settlement	(8,131		)	(6,821		)	(5,030		)
Net cash used in financing activities	(171,550		)	(158,575		)	(161,381		)
Net increase (decrease) in cash and cash equivalents	24,255			(15,419		)	18,249
Cash and cash equivalents at beginning of year	22,247			37,666			19,417
Cash and cash equivalents at end of year	$	46,502		$	22,247		$	37,666

See accompanying supplementary notes to Parent Company condensed financial statements.

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

PARENT COMPANY ONLY

SUPPLEMENTARY NOTES

Note A

The accompanying Parent Company financial statements should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements appearing this annual report.

Note B

Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders’ surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years.

The payment of dividends from our insurance subsidiaries is the principal source of cash inflow for MGIC Investment Corporation, our holding company, other than investment income and raising capital in the public markets. The payment of dividends by our insurance subsidiaries is restricted by insurance regulation as discussed above. MGIC is the principal source of dividend-paying capacity and, in 2018, it paid a total of $220 million in dividends in cash and fixed income securities to our holding company, and we expect MGIC to continue to pay quarterly dividends. During 2017, MGIC paid a total of $140 million in dividends in cash and fixed income securities to our holding company. During 2016, MGIC paid a total of $64 million in dividends; and other insurance subsidiaries paid distributions of $52 million to our holding company. These distributions were completed in conjunction with the transfer of risk and the final dissolution of those insurance entities during 2016. Our holding company subsequently contributed the majority of the funds, approximately $36 million, to MGIC in relation to the transfer of risk. No contributions were made to our insurance subsidiaries in 2018 or 2017.

Note C

The senior notes and convertible junior subordinated debentures ("9% Debentures"), discussed in Note 7 – “Debt” to our consolidated financial statements, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries. MGIC owns $132.7 million in aggregate principal of the 9% Debentures. The 9% Debentures owned by MGIC remain obligations of our holding company. For GAAP accounting purposes, the 9% Debentures owned by MGIC are eliminated in our consolidated financial statements.