Real Estate and Other Investments

12 Months Ended

Dec. 31, 2019

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



	December 31,
	2019		2018
Industrial	12.5	%	13.1	%
Office	39.8		37.3
Retail	39.1		37.0
Other	8.6		12.6
Total	100.0	%	100.0	%



	December 31,
	2019		2018
East North Central	5.9	%	5.6	%
East South Central	6.2		5.4
Mountain	12.4		11.9
Pacific	7.3		7.3
South Atlantic	15.2		13.8
West South Central	50.6		53.8
Other	2.4		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 2019 or 2018.

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



	December 31,
	2019		2018
Investment real estate	$	134,534	$	141,843
Short-term investments	500		500
Cash and cash equivalents	11,155		10,392
Other receivables	3,673		3,939
Other assets	15,355		13,231
Total assets of consolidated VIEs	$	165,217	$	169,905
Notes payable	$	157,997	$	137,963
Other liabilities	9,731		7,145
Total liabilities of consolidated VIEs	$	167,728	$	145,108

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 $4,304,000 and $26,635,000 at December 31, 2019 and 2018, respectively.

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



		December 31,
Interest rate	Maturity	2019		2018
LIBOR	2021	$	10,836	$	10,834
4.18% fixed	2024	65,452		42,399
4% fixed	2022	81,709		84,730
Total		$	157,997	$	137,963

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,
	2019				2018
	Carrying Amount		Maximum Exposure to Loss		Carrying Amount		Maximum Exposure to Loss
Investment in unconsolidated affiliates	$	332,742	$	332,742	$	330,730	$	330,730
Mortgage loans	657,528		657,528		633,533		633,533
Accrued investment income	2,198		2,198		2,191		2,191

As of December 31, 2019, one real estate investment with a carrying value of $3,364,000 met the criteria 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 2019 and 2018 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 is less than 3% 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 LLCs or limited partnerships, were comprised of the following (in thousands):



	December 31,
	2019		2018
Real estate	$	402,780	$	386,981
Equity and fixed income	278,611		156,121
Other	24,330		28,795
Total investments in unconsolidated affiliates	$	705,721	$	571,897



	Years ended December 31,
	2019		2018		2017
Income from operations	$	7,407	$	7,595	$	16,663
Net gain on sales	96,094		13,686		70,011
Equity in earnings of unconsolidated affiliates	$	103,501	$	21,281	$	86,674