SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2020

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)	2020		2019
ASSETS
Fixed income, available-for-sale, at fair value (amortized cost, 2020 – $773,881; 2019 – $287,489)	$	773,995	$	288,362
Cash and cash equivalents	73,000		36,621
Investment in subsidiaries, at equity in net assets	4,740,074		4,611,356
Accounts receivable - affiliates	1,450		2,129
Income taxes -current and deferred	219,059		196,978
Accrued investment income	3,760		2,498
Other assets	—		81
Total assets	$	5,811,338	$	5,138,025
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Senior notes	$	879,379	$	420,867
Convertible junior subordinated debentures	208,814		389,522
Accrued interest	23,004		17,928
Other liabilities	1,155		474
Total liabilities	1,112,352		828,791
Shareholders’ equity:
Common stock, (one dollar par value, shares authorized 1,000,000; shares issued 2020 – 371,353; 2019 – 371,353; outstanding 2020 – 338,573; 2019 – 347,308)	371,353		371,353
Paid-in capital	1,862,042		1,869,719
Treasury stock (shares at cost 2020 – 32,779; 2019 – 24,045)	(393,326)		(283,196)
Accumulated other comprehensive income, net of tax	216,821		72,708
Retained earnings	2,642,096		2,278,650
Total shareholders’ equity	4,698,986		4,309,234
Total liabilities and shareholders’ equity	$	5,811,338	$	5,138,025

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)	2020		2019		2018
Revenues:
Investment income, net of expenses	$	7,090	$	7,695	$	4,685
Net realized investment gains (losses)	1,454		(311)		(532)
Total revenues	8,544		7,384		4,153
Expenses:
Operating expenses	719		793		637
Interest expense	65,472		61,593		61,930
Loss on debt extinguishment	35,033		—		—
Total expenses	101,224		62,386		62,567
Loss before tax	(92,680)		(55,002)		(58,414)
(Benefit from) provision for income taxes	(18,431)		(12,263)		(13,517)
Equity in net income of subsidiaries	520,342		716,502		714,994
Net income	446,093		673,763		670,097
Other comprehensive income (loss), net of tax	144,113		196,922		(80,413)
Comprehensive income	$	590,206	$	870,685	$	589,684

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)	2020		2019		2018
Cash flows from operating activities:
Net income	446,093		$	673,763	$	670,097
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries	(520,342)		(716,502)		(714,994)
Dividends received from subsidiaries	221,024		154,413		199,692
Deferred tax (benefit) expense	(18,252)		(10,416)		(11,756)
Loss on debt extinguishment	35,033		—		—
Other	19,088		21,104		24,303
Change in certain assets and liabilities:
Accounts receivable - affiliates	972		(735)		18
Income taxes receivable	—		1		17,859
Accrued investment income	(1,262)		(478)		112
Accrued interest	5,076		(2)		(4)
Net cash provided by operating activities	187,430		121,148		185,327
Cash flows from investing activities:
Purchases of investments	(1,131,060)		(117,663)		(83,003)
Proceeds from sales of investments	812,188		160,040		93,481
Net cash provided by investing activities	(318,872)		42,377		10,478
Cash flows from financing activities:
Proceeds from issuance of senior notes	640,250		—		—
Purchase of senior notes	(179,735)		—		—
Payment of original issue discount - senior notes	(2,969)		—		—
Purchase of convertible junior subordinated debentures	(36,392)		—		—
Payment of original issue discount - convertible junior subordinated debentures	(15,049)		—		—
Cash portion of loss on debt extinguishment	(25,266)		—		—
Repurchase of common stock	(119,997)		(125,766)		(163,419)
Dividends paid	(82,061)		(41,914)		—
Payment of debt issuance costs	(2,020)		—		—
Payment of withholding taxes related to share-based compensation net share settlement	(8,940)		(5,726)		(8,131)
Net cash provided by (used in) financing activities	167,821		(173,406)		(171,550)
Net increase (decrease) in cash and cash equivalents	36,379		(9,881)		24,255
Cash and cash equivalents at beginning of year	36,621		46,502		22,247
Cash and cash equivalents at end of year	$	73,000	$	36,621	$	46,502

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 $390 million, $280 million and $220 million in dividends in cash and fixed income securities to our holding company during 2020, 2019 and 2018, respectively. No contributions were made to our insurance subsidiaries in 2020, 2019 or 2018.

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's ownership of our holding company's 9% Debentures of $132.7 million were previously eliminated in consolidation, but remained an obligation of our holding company. In the third quarter of 2020, MGIC distributed to the holding company, as a dividend, its ownership in the 9% Debentures, retiring those 9% Debentures.