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Note 14: Business Segment Information
 12 Months Ended
Dec. 31, 2014
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 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.

 

2014

Life

 

Cemetery/

 

 

Reconciling

 

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

 Revenue from customers

 $       57,037,623

 $       11,426,308

 $     124,668,054

 $                         -

 $     193,131,985

 Net investment income

          23,008,489

               275,324

            5,019,927

                     -

          28,303,740

Realized gains (losses) on

 investments and other assets

            1,208,391

               585,543

               124,242

                     -

            1,918,176

 Other than temporary impairments

             (164,240)

                    -

                    -

                     -

             (164,240)

 Other revenues

               682,682

               169,464

            2,894,867

                     -

            3,747,013

 Intersegment revenues:

 Net investment income

            6,128,389

            1,288,856

               642,880

            (8,060,125)

                           -

 Total revenues

          87,901,334

          13,745,495

        133,349,970

            (8,060,125)

        226,936,674

Expenses:

 Death and other policy benefits

          29,789,964

                    -

                    -

                     -

          29,789,964

 Increase in future policy benefits

          18,060,151

                    -

                    -

                     -

          18,060,151

Amortization of deferred policy     and preneed acquisition costs and

value of business acquired

            6,561,589

               331,389

                    -

                     -

            6,892,978

 Depreciation

               644,510

               436,390

            1,096,265

                     -

            2,177,165

General, administrative and

other costs:

 Intersegment

                 24,000

               166,079

               208,513

               (398,592)

                           -

 Provision for loan losses

                    -

                    -

            3,053,403

                     -

            3,053,403

Costs related to funding mortgage

   loans

                    -

                    -

            6,877,069

                     -

            6,877,069

 Other

          23,045,928

          10,245,144

        111,319,492

                          (2)

        144,610,562

Interest expense:

 Intersegment

               725,354

            1,481,317

            5,454,860

            (7,661,531)

                           -

 Other

               578,083

               421,920

            1,994,426

                     -

            2,994,429

 Total benefits and expenses

          79,429,579

          13,082,239

        130,004,028

            (8,060,125)

        214,455,721

 Earnings before income    taxes

 $         8,471,755

 $            663,256

 $         3,345,942

 $                         -

 $       12,480,953

 Income tax expense

          (3,427,254)

                    -

          (1,299,051)

                     -

          (4,726,305)

 Net earnings

 $         5,044,501

 $            663,256

 $         2,046,891

 $                         -

 $         7,754,648

 Identifiable assets

 $     652,348,803

 $     109,114,226

 $       52,349,204

 $     (142,742,671)

 $     671,069,562

 Goodwill

 $         2,765,570

 $                        -

 $                        -

 $                         -

 $         2,765,570

 Expenditures for long-lived assets

 $         1,420,950

 $            121,677

 $            737,936

 $                         -

 $         2,280,563

 

2013

Life

 

Cemetery/

 

 

Reconciling

 

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

Revenue from customers

 $       51,322,567

 $       12,000,375

 $     127,950,021

 $                         -

 $     191,272,963

Net investment income

          15,877,784

               268,923

            4,207,295

                     -

          20,354,002

Realized gains (losses) on

investments and other assets

            1,402,352

                 15,699

                    -

                     -

            1,418,051

Other than temporary impairments

             (336,226)

                    -

                    -

                     -

             (336,226)

Other revenues

               538,009

                 94,703

            1,973,518

                     -

            2,606,230

Intersegment revenues:

Net investment income

            7,220,282

            1,356,825

               262,074

            (8,839,181)

                           -

Total revenues

          76,024,768

          13,736,525

        134,392,908

            (8,839,181)

        215,315,020

Expenses:

Death and other policy benefits

          28,534,936

                    -

                    -

                     -

          28,534,936

Increase in future policy benefits

          19,594,890

                    -

                    -

                     -

          19,594,890

Amortization of deferred policy and preneed acquisition costs and

value of business acquired

            4,811,300

               370,537

                    -

                     -

            5,181,837

Depreciation

               401,893

               426,641

               792,535

                     -

            1,621,069

General, administrative and

other costs:

Intersegment

                 24,000

               141,367

               199,193

               (364,560)

                           -

Provision for loan losses

                    -

                    -

            1,751,472

                     -

            1,751,472

Costs related to funding mortgage

  loans

                    -

                    -

            6,635,290

                     -

            6,635,290

Other

          18,753,753

          10,467,717

        110,096,627

                            1

        139,318,098

Interest expense:

Intersegment

               802,352

            1,664,096

            6,008,174

            (8,474,622)

                           -

Other

               233,343

               443,133

            2,177,225

                     -

            2,853,701

Total benefits and expenses

          73,156,467

          13,513,491

        127,660,516

            (8,839,181)

        205,491,293

Earnings before income    taxes

 $         2,868,301

 $            223,034

 $         6,732,392

 $                         -

 $         9,823,727

Income tax (expense) benefit

               399,304

                    -

          (2,637,110)

                     -

          (2,237,806)

Net earnings

 $         3,267,605

 $            223,034

 $         4,095,282

 $                         -

 $         7,585,921

Identifiable assets

 $     591,465,834

 $     114,454,631

 $       50,250,677

 $     (137,413,688)

 $     618,757,454

Goodwill

 $            391,848

 $            285,191

 $                        -

 $                         -

 $            677,039

Expenditures for long-lived assets

 $            659,259

 $         1,100,195

 $         1,810,879

 $                         -

 $         3,570,333

 

2012

Life

 

Cemetery/

 

 

Reconciling

 

 

Insurance

Mortuary

Mortgage

Items

Consolidated

Revenues:

From external sources:

Revenue from customers

 $       49,550,904

 $       10,864,497

 $     150,553,261

 $                         -

 $     210,968,662

Net investment income

          16,616,541

               333,625

            4,965,411

                     -

          21,915,577

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 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

 $         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