Other Activities of the parent company and passive investment affiliates, financing expenses on Corporate debt and debt securities including Capital Securities and mandatorily redeemable preferred stock, and federal and state income taxes not otherwise allocated to business segments are reported in the "Other" category. The following table summarizes the operating results:
Consolidated cash provided by operations for 1997, 1996 and 1995 were $648, $1,077 and $321. 1996 cash flows from operations were impacted by cash of approximately $462 received in conjunction with the retrocession assumption of periodic payment annuities from Household.
Mortgage loan underwriting standards emphasize the credit status of a prospective borrower, quality of the underlying collateral and conservative loan-to-value relationships. Approximately 42% of stated mortgage loan balances as of December 31, 1997 are due from borrowers in South Atlantic states and approximately 22% are due from borrowers in West South Central states. No other geographic region represents as much as 10% of December 31, 1997 mortgage loans.
Hedging Anticipated Investments: Interest rate swaps are used to hedge anticipated investment transactions, protecting against changes in the yield curve during the time period between identifying and closing mortgage loan and private placement investments. Hedges are terminated on the date the related investment is closed. Until termination of a hedge, interest is exchanged periodically on the notional value, with the Company receiving a fixed rate and paying various short-term LIBOR rates on a net exchange basis. The net amount received or paid under these swaps is deferred. Upon termination of a swap, the realized gain or loss on the closed hedge is also deferred. The deferred amounts are amortized into income over the average duration of the related investment. As of December 31, 1997, there were no open anticipatory hedge positions. Deferred hedging gains as of December 31, 1997 and 1996 were $1.
The MEDS had principal amounts of: 6.95% MEDS, $55.55 per security and 6.65% MEDS, $66.625 per security. Two weeks prior to, or at, maturity, the principal amount of the MEDS will be mandatorily exchanged into either a number of shares of the common stock of NationsBank (stock) determined based on an exchange rate reflecting the then trading price for the stock, or cash in an amount of equal value, at the Company's option. Subject to adjustments to reflect dilution, the exchange rate is equal to (1) 0.8264 shares if the stock price is at least: 6.95% MEDS, $67.22 and 6.65% MEDS, $80.62, (2) a fractional share of the stock having a value equal to the principal amount if the price is more than the principal amount but less than the amount stated in (1), or (3) one share if the price is less than or equal to the principal amount.
Because the options issued generally vest over three years and because SFAS 123 is applicable only to options granted subsequent to December 31, 1994, 1998 is the first year in which the full pro forma effect will be reflected.
The following table sets forth the funded status of the Company's postretirement health care and life insurance plans as of December 31 recognized in the consolidated balance sheets: