FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended:  **SEPTEMBER 30,2000
Commission File Number: **0-10306
 
**INDEPENDENCE HOLDING COMPANY

(Exact name of registrant as specified in itscharter)
**Delaware**58-1407235
(State ofIncorporation)
(I.R.S. EmployerIdentification No.)
 

 

 
**96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT06902**
(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code:**(203) 358-8000****NOT APPLICABLE**
Former  name, former address and former fiscalyear, if changed since last report.

 

 

 

 

Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days. Yes X.  No _.
 

 

 
**7,888,295 SHARES OF COMMON STOCK, $1.00 PARVALUE**
Common stock outstanding as of November 8, 2000
**INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

INDEX

 

 

 ****PART I - FINANCIALINFORMATION**PAGENO.  
Consolidated Balance Sheets -  
September 30, 2000 (unaudited) andDecember 31, 1999......... 
3  
Consolidated Statements of Operations -  
Three Months and Nine  Months EndedSeptember 30, 2000   
and 1999(unaudited)......................... 
4  
Consolidated Statements of Cash Flows -  
Nine Months Ended September 30, 2000 and1999 (unaudited)........ 
5  
Notes to Consolidated Financial Statements(unaudited).......... 
6 -
9  
Management's Discussion and Analysis ofResults of Operations and  
FinancialCondition......................... 
10 -
15  **PART II - OTHERINFORMATION   
Item 6 - Exhibits and Reports on Form 8-K............... 
16  
Signatures............................. 
17** 

 

INDEPENDENCE HOLDING COMPANY ANDSUBSIDIARIES
**CONSOLIDATED BALANCESHEETS**SEPTEMBER30,**DECEMBER31,**2000**1999**(UNAUDITED)**ASSETS:
Cash and cashequivalents
$
10,533,000
$
6,689,000
Investments:
Short-terminvestments
6,460,000
9,668,000
Securities purchased underagreements
to resell 
16,228,000
14,952,000
Fixed maturities
366,618,000
339,646,000
Equity securities
24,599,000
15,613,000
Other investments
64,689,000
61,373,000
Totalinvestments
478,594,000
441,252,000
Due frombrokers
10,173,000
416,000
Deferred acquisition costs
27,831,000
32,537,000
Due and unpaidpremiums
10,664,000
14,645,000
Due fromreinsurers
141,609,000  
134,764,000
Notes and otherreceivables
6,638,000
37,548,000
Other assets 
10,825,000
10,500,000
$
696,867,000
$
678,351,000**LIABILITIES ANDSTOCKHOLDERS' EQUITY:**LIABILITIES:
Future insurance policybenefits 
$
293,731,000
$
289,689,000
Unearnedpremiums
23,780,000
21,557,000
Funds ondeposit
174,951,000
185,936,000
Policy claims 
7,121,000
7,062,000
Other policyholders'funds
4,859,000
5,014,000
Financial instrumentssold, but not 
yet purchased 
19,000
-
Due to brokers
27,444,000
9,593,000
Due toreinsurers
8,744,000
16,012,000
Accounts payable, accrualsand other
liabilities
20,984,000
20,424,000
Income taxes 
3,675,000
4,513,000
Long-term debt
15,000,000
15,000,000**TOTALLIABILITIES
580,308,000
574,800,000**STOCKHOLDERS' EQUITY:
Preferred stock (noneissued)**-
-
Common stock, 7,898,295and 7,897,195
shares issued andoutstanding, net of
1,764,324 and 1,764,424shares
in treasury,respectively
7,898,000
7, 897,000
Paid-in-capital
80,310,000
80,309,000
Accumulated othercomprehensive loss
(7,139,000)
(11,028,000)
Retainedearnings
35,490,000
26,373,000**TOTAL STOCKHOLDERS'EQUITY
116,559,000
103,551,000**TOTAL LIABILITIESAND**STOCKHOLDERS'EQUITY
$
696,867,000
$
678,351,000** 

See Accompanying Notes to Consolidated FinancialStatements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
**(UNAUDITED)**THREE MONTHSENDED**NINE MONTHSENDED**SEPTEMBER30,**SEPTEMBER30,**2000**1999**2000**1999****REVENUES:
Premiumsearned
$
23,322,000
$
20,392,000
$
65,506,000
$
59,489,000
Net investmentincome
9,056,000
7,522,000
27,072,000
19,757,000
Net realized and

unrealized gains (losses)
441,000
(78,000)
(365,000)
95,000
Other income
1,916,000
2,090,000
4,002,000
6,406,000
34,735,000
29,926,000
96,215,000
85,747,000**EXPENSES:
Insurance benefits,claims
and reserves
18,148,000
16,700,000
50,775,000
45,765,000
Amortization ofdeferred
acquisitioncosts
2,033,000
1,889,000
4,681,000
4,380,000
Selling, generaland
administrativeexpenses
9,119,000
7,895,000
26,237,000
24,942,000
Interest expense on
long-term debt
335,000
-
952,000
-
29,635,000
26,484,000
82,645,000
75,087,000
Operating incomebefore
income taxes
5,100,000
3,442,000
13,570,000
10,660,000
Income taxexpense
1,785,000
922,000
4,440,000
2,985,000**NETINCOME
$
3,315,000
$
2,520,000
$
9,130,000
$
7,675,000**BASIC INCOME PER**COMMONSHARE**$
.42**$
.32
$
1.16
$
.96

WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
7,898,000
7,918,000
7,898,000
8,018,000**DILUTED INCOMEPER**COMMONSHARE
$
.41
$
.31
$
1.14
$
.94

WEIGHTEDAVERAGE
DILUTIVESHARES
OUTSTANDING
8,006,000
8,032,000
7,986,000
8,140,000**See Accompanying Notes to ConsolidatedFinancial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)****NINE MONTHS ENDEDSEPTEMBER 30,**2000**1999

**CASH FLOWS FROMOPERATING ACTIVITIES:
Net income************************************************************************************************