SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2019

Condensed Financial Information 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)	2019			2018
ASSETS
Fixed income, available-for-sale, at fair value (amortized cost, 2019 – $287,489; 2018 – $203,743)	$	288,362		$	201,507
Cash and cash equivalents	36,621			46,502
Investment in subsidiaries, at equity in net assets	4,611,356			3,981,970
Accounts receivable - affiliates	2,129			1,396
Income taxes - current and deferred	196,978			186,561
Accrued investment income	2,498			2,020
Other assets	81			740
Total assets	$	5,138,025		$	4,420,696
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Senior notes	$	420,867		$	419,713
Convertible junior subordinated debentures	389,522			389,522
Accrued interest	17,928			17,930
Other liabilities	474			11,640
Total liabilities	828,791			838,805
Shareholders’ equity:
Common stock, (one dollar par value, shares authorized 1,000,000; shares issued 2019 – 371,353; 2018 – 371,353; outstanding 2019 – 347,308; 2018 – 355,371)	371,353			371,353
Paid-in capital	1,869,719			1,862,536
Treasury stock (shares at cost 2019 – 24,045; 2018 – 15,982)	(283,196		)	(175,059		)
Accumulated other comprehensive income (loss), net of tax	72,708			(124,214		)
Retained earnings	2,278,650			1,647,275
Total shareholders’ equity	4,309,234			3,581,891
Total liabilities and shareholders’ equity	$	5,138,025		$	4,420,696

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)	2019			2018			2017
Revenues:
Investment income, net of expenses	$	7,695		$	4,685		$	3,177
Net realized investment (losses) gains	(311		)	(532		)	(13		)
Total revenues	7,384			4,153			3,164
Expenses:
Operating expenses	793			637			642
Interest expense	61,593			61,930			65,972
Loss on debt extinguishment	—			—			65
Total expenses	62,386			62,567			66,679
Loss before tax	(55,002		)	(58,414		)	(63,515		)
(Benefit from) provision for income taxes	(12,263		)	(13,517		)	95,517
Equity in net income of subsidiaries	716,502			714,994			514,793
Net income	673,763			670,097			355,761
Other comprehensive income (loss), net of tax	196,922			(80,413		)	41,739
Comprehensive income	$	870,685		$	589,684		$	397,500

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)	2019			2018			2017
Cash flows from operating activities:
Net income	$	673,763		$	670,097		$	355,761
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries	(716,502		)	(714,994		)	(514,793		)
Dividends received from subsidiaries	154,413			199,692			110,145
Deferred tax (benefit) expense	(10,416		)	(11,756		)	96,741
Loss on debt extinguishment	—			—			65
Other	21,104			24,303			18,716
Change in certain assets and liabilities:
Accounts receivable - affiliates	(735		)	18			(634		)
Income taxes receivable	1			17,859			297
Accrued investment income	(478		)	112			(192		)
Accrued interest	(2		)	(4		)	(2,819		)
Net cash provided by operating activities	121,148			185,327			63,287
Cash flows from investing activities:
Purchases of investments	(117,663		)	(83,003		)	(97,091		)
Proceeds from sales of investments	160,040			93,481			176,960
Net cash provided by investing activities	42,377			10,478			79,869
Cash flows from financing activities:
Proceeds from revolving credit facility	—			—			150,000
Repayment of revolving credit facility	—			—			(150,000		)
Repurchase of convertible senior notes	—			—			(150,124		)
Repurchase of common stock	(125,766		)	(163,419		)	—
Dividends paid	(41,914		)	—			—
Payment of debt issuance costs	—			—			(1,630		)
Payment of withholding taxes related to share-based compensation net share settlement	(5,726		)	(8,131		)	(6,821		)
Net cash used in financing activities	(173,406		)	(171,550		)	(158,575		)
Net (decrease) increase in cash and cash equivalents	(9,881		)	24,255			(15,419		)
Cash and cash equivalents at beginning of year	46,502			22,247			37,666
Cash and cash equivalents at end of year	$	36,621		$	46,502		$	22,247

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 paid a total of $280 million, $220 million and $140 million in dividends in cash and fixed income securities to our holding company during 2019, 2018 and 2017, respectively. In January 2020, we received the appropriate approvals for MGIC to pay our holding company, in the first quarter of 2020, a special dividend of $320 million and a quarterly dividend of $70 million. We expect MGIC to continue to pay quarterly dividends totaling at least $280 million per year. No contributions were made to our insurance subsidiaries in 2019, 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.