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Note 14: Business Segment Information
 12 Months Ended
Dec. 31, 2012
Notes  
Note 14: Business Segment Information

14)   Business Segment Information

 

Description of Products and Services by Segment

 

The Company has three reportable business segments: life insurance, cemetery and mortuary, and mortgage. The Company’s life insurance segment consists of life insurance premiums and operating expenses from the sale of insurance products sold by the Company’s independent agency force and net investment income derived from investing policyholder and segment surplus funds. The Company’s cemetery and mortuary segment consists of revenues and operating expenses from the sale of at-need cemetery and mortuary merchandise and services at its mortuaries and cemeteries, pre-need sales of cemetery spaces after collection of 10% or more of the purchase price and the net investment income from investing segment surplus funds. The Company’s mortgage loan segment consists of loan originations fee income and expenses from the originations of residential and commercial mortgage loans and interest earned and interest expenses from warehousing pre-sold loans before the funds are received from financial institutional investors.

 

Measurement of Segment Profit or Loss and Segment Assets

                                                                        

The accounting policies of the reportable segments are the same as those described in the Significant Accounting Principles. Intersegment revenues are recorded at cost plus an agreed upon intercompany profit, and are eliminated upon consolidation.

 

Factors Management Used to Identify the Enterprise’s Reportable Segments

 

The Company’s reportable segments are business units that offer different products and are managed separately due to the different products and the need to report to the various regulatory jurisdictions.

 

2012

Life

 

Cemetery/

 

 

Reconciling

 

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

Revenue from customers

$48,216,327

$10,864,497

$150,553,261

$-

$209,634,085

Net investment income

17,951,118

333,625

4,965,411

-

23,250,154

Realized gains (losses) on

investments and other assets

1,415,556

8,954

-

-

1,424,510

Other than temporary impairments

(1,207,632)

-

-

-

(1,207,632)

Other revenues

482,325

136,189

540,538

-

1,159,052

Intersegment revenues:

Net investment income

7,570,979

1,435,891

294,980

(9,301,850)

-

Total revenues

74,428,673

12,779,156

156,354,190

(9,301,850)

234,260,169

Expenses:

Death and other policy benefits

24,246,088

-

-

-

24,246,088

Increase in future policy benefits

21,435,191

-

-

-

21,435,191

Amortization of deferred policy     and preneed acquisition costs and

value of business acquired

5,137,586

311,843

-

-

5,449,429

Depreciation

315,960

426,006

516,131

-

1,258,097

General, administrative and

other costs:

Intersegment

24,000

102,726

137,696

(264,422)

-

Provision for loan losses

-

-

4,239,418

-

4,239,418

Costs related to funding mortgage

  loans

-

-

6,931,045

-

6,931,045

Other

17,824,800

9,582,499

118,198,014

2

145,605,315

Interest expense:

Intersegment

694,442

1,681,987

6,661,001

(9,037,430)

-

Other

159,659

455,449

3,129,185

-

3,744,293

Total benefits and expenses

69,837,726

12,560,510

139,812,490

(9,301,850)

212,908,876

Earnings (losses) before income    taxes

$4,590,947

$218,646

$16,541,700

$-

$21,351,293

Income tax (expense) benefit

1,755,258

-

(6,394,033)

-

(4,638,775)

Net earnings (losses)

$6,346,205

$218,646

$10,147,667

$-

$16,712,518

Identifiable assets

$558,845,424

$116,368,747

$55,613,678

$(133,611,226)

$597,216,623

Goodwill

$391,848

$285,191

$-

$-

$677,039

Expenditures for long-lived assets

$400,605

$689,154

$2,131,861

$-

$3,221,620

 

 

 

2011

Life

 

Cemetery/

 

 

Reconciling

 

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

Revenue from customers

$48,457,405

$10,761,469

$77,605,105

$-

$136,823,979

Net investment income

17,295,982

159,186

2,555,536

-

20,010,704

Realized gains (losses) on

investments and other assets

1,596,127

868,226

-

-

2,464,353

Other than temporary impairments

(840,735)

-

-

-

(840,735)

Other revenues

712,400

147,830

248,739

-

1,108,969

Intersegment revenues:

Net investment income

5,832,691

1,691,197

258,062

(7,781,950)

-

Total revenues

73,053,870

13,627,908

80,667,442

(7,781,950)

159,567,270

Expenses:

Death and other policy benefits

23,945,720

-

-

-

23,945,720

Increase in future policy benefits

22,258,241

-

-

-

22,258,241

Amortization of deferred policy     and preneed acquisition costs and

value of business acquired

5,396,016

373,332

-

-

5,769,348

Depreciation

479,634

520,015

499,389

-

1,499,038

General, administrative and

other costs:

Intersegment

24,000

103,494

130,011

(257,505)

-

Provision for loan losses

-

-

2,070,399

-

2,070,399

Costs related to funding mortgage

  loans

-

-

4,240,377

-

4,240,377

Other

17,472,713

9,827,197

69,286,435

-

96,586,345

Interest expense:

Intersegment

668,047

1,905,559

4,950,839

(7,524,445)

-

Other

111,221

437,736

1,412,292

-

1,961,249

Total benefits and expenses

70,355,592

13,167,333

82,589,742

(7,781,950)

158,330,717

Earnings (losses) before income    taxes

$2,698,278

$460,575

$(1,922,300)

$-

$1,236,553

Income tax (expense) benefit

(734,626)

-

796,831

-

62,205

Net earnings (losses)

$1,963,652

$460,575

$(1,125,469)

$-

$1,298,758

Identifiable assets

$504,744,743

$116,453,434

$27,913,480

$(126,061,216)

$523,050,441

Goodwill

$391,848

$285,191

$-

$-

$677,039

Expenditures for long-lived assets

$136,742

$255,116

$373,775

$-

$765,633

 

 

 

2010

 

Life

 

Cemetery/

 

 

Reconciling

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

Revenue from customers

$38,509,198

$11,520,369

$97,342,215

$-

$147,371,782

Net investment income

14,738,200

63,574

3,814,210

-

18,615,984

Realized gains on

investments and other assets

1,642,174

(26,756)

-

-

1,615,418

Other than temporary impairments

(673,981)

-

-

-

(673,981)

Other revenues

1,039,016

256,862

285,237

-

1,581,115

Intersegment revenues:

Net investment income

6,817,008

1,678,096

244,578

(8,739,682)

-

Total revenues

62,071,615

13,492,145

101,686,240

(8,739,682)

168,510,318

Expenses:

Death and other policy benefits

20,925,988

-

-

-

20,925,988

Increase in future policy benefits

17,020,086

-

-

-

17,020,086

Amortization of deferred policy     and preneed acquisition costs and

value of business acquired

4,058,514

372,562

-

-

4,431,076

Depreciation

559,999

631,281

620,652

-

1,811,932

General, administrative and

other costs:

Intersegment

24,000

109,128

185,147

(318,275)

-

Provision for loan losses

-

-

5,404,645

-

5,404,645

Costs related to funding mortgage

  loans

-

-

6,044,020

-

6,044,020

Other

16,756,255

11,097,302

83,329,514

-

111,183,071

Interest expense:

Intersegment

686,384

1,792,479

5,942,544

(8,421,407)

-

Other

179,891

475,372

2,123,657

-

2,778,920

Total benefits and expenses

60,211,117

14,478,124

103,650,179

(8,739,682)

169,599,738

Earnings (losses) before income    taxes

$1,860,498

$(985,979)

$(1,963,939)

$-

$(1,089,420)

Income tax (expense) benefit

(97,410)

-

756,206

-

658,796

Net earnings (losses)

$1,763,088

$(985,979)

$(1,207,733)

$-

$(430,624)

Identifiable assets

$441,751,653

$111,798,118

$30,323,496

$(116,860,777)

$467,012,490

Goodwill

$391,848

$683,191

$-

$-

$1,075,039

Expenditures for long-lived assets

$220,417

$275,904

$363,667

$-

$859,988