Real Estate and Other Investments

Investment real estate by property-type and geographic distribution are as follows:



	December 31,
	2018		2017
Industrial	13.1	%	6.0	%
Office	37.3		39.0
Retail	37.0		39.3
Other	12.6		15.7
Total	100.0	%	100.0	%



	December 31,
	2018		2017
East North Central	5.6	%	6.1	%
East South Central	5.4		3.6
Mountain	11.9		13.2
Pacific	7.3		8.5
South Atlantic	13.8		14.0
West South Central	53.8		52.4
Other	2.2		2.2
Total	100.0	%	100.0	%

American National regularly invests in real estate partnerships and joint ventures. American National frequently participates in the design of these entities with the sponsor, but in most cases, its involvement is limited to financing. Through analysis performed by American National, some of these partnerships and joint ventures have been determined to be variable interest entities (“VIEs”). In certain instances, in addition to an economic interest in the entity, American National holds the power to direct the most significant activities of the entity and is deemed the primary beneficiary or consolidator of the entity. The assets of the consolidated VIEs are restricted and must first be used to settle their liabilities. Creditors or beneficial interest holders of these VIEs have no recourse to the general credit of American National, as American National’s obligation is limited to the amount of its committed investment. American National has not provided financial or other support to the VIEs in the form of liquidity arrangements, guarantees, or other commitments to third parties that may affect the fair value or risk of its variable interest in the VIEs in 2018 or 2017.

The assets and liabilities relating to the VIEs included in the consolidated financial statements are as follows (in thousands):



	December 31,
	2018		2017
Investment real estate	$	141,843	$	148,456
Short-term investments	500		501
Cash and cash equivalents	10,392		6,320
Other receivables	3,939		4,461
Other assets	13,231		15,920
Total assets of consolidated VIEs	$	169,905	$	175,658
Notes payable	$	137,963	$	137,458
Other liabilities	7,145		5,616
Total liabilities of consolidated VIEs	$	145,108	$	143,074

The notes payable in the consolidated statements of financial position pertain to the borrowings of the consolidated VIEs. The liability of American National relating to notes payable of the consolidated VIEs is limited to the amount of its direct or indirect investment in the respective ventures, which totaled $26,635,000 and $28,377,000 at December 31, 2018 and 2017, respectively.

The total long-term notes payable of the consolidated VIE’s consists of the following (in thousands):



		December 31,
Interest rate	Maturity	2018		2017
LIBOR	2020	$	10,834	$	9,702
90 day LIBOR + 2.5%	2021	42,399		40,124
4% fixed	2022	84,730		87,632
Total		$	137,963	$	137,458

For other VIEs in which American National is a partner, it is not the primary beneficiary, and these entities are not consolidated, as the major decisions that most significantly impact the economic activities of the VIE require consent of all partners. The carrying amount and maximum exposure to loss relating to unconsolidated VIEs follows (in thousands):



	December 31,
	2018				2017
	Carrying Amount		Maximum Exposure to Loss		Carrying Amount		Maximum Exposure to Loss
Investment in unconsolidated affiliates	$	330,730	$	330,730	$	314,808	$	314,808
Mortgage loans	633,533		633,533		493,014		493,014
Accrued investment income	2,191		2,191		1,817		1,817

As of December 31, 2018, no real estate investments were classified as held-for-sale.

The Company’s equity in earnings of unconsolidated affiliates is the Company’s share of operating earnings and realized gains from investments in real estate joint ventures and other limited partnership interests (“joint ventures”) using the equity method of accounting. In 2018 and 2017 certain joint ventures took advantage of market opportunities to generate realized gains on the sale of real estate held or developed by the ventures.

The Company’s income from and investment in each joint venture did not exceed 20% and therefore no separate financial disclosure is required. The Company’s income from, assets held, and investment in each joint venture did not exceed 10% of operating income before tax. Additionally, the Company’s investment in joint ventures continues to be 2% or less of the Company’s total assets, and investments in individual joint ventures is not considered to be material to the Company in relation to its financial position or ongoing results of operations. Therefore, summarized financial information of equity method investees has not been included.

The Company’s total investment in and equity in earnings of unconsolidated affiliates, of which substantially all are LLC’s or limited partnerships, were comprised of the following (in thousands):



	December 31,
	2018		2017
Real estate	$	386,981	$	359,130
Equity and fixed income	156,121		95,819
Other	28,795		29,258
Total investments in unconsolidated affiliates	$	571,897	$	484,207



	Years ended December 31,
	2018		2017		2016
Income from operations	$	7,595	$	16,663	$	19,005
Net gain on sales	13,686		70,011		38,195
Equity in earnings of unconsolidated affiliates	$	21,281	$	86,674	$	57,200