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Note 14: Business Segment Information

12 Months Ended

Dec. 31, 2016

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 segment consists of 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 are managed separately due to the different products provided and the need to report separately to the various regulatory jurisdictions. The Company regularly reviews the quantitative thresholds and other criteria to determine when other business segments may need to be reported.

	2016 (As Restated)
	Life		Cemetery/				Intercompany
	Insurance		Mortuary		Mortgage		Eliminations		Consolidated
Revenues:
From external sources:
Revenue from customers	$ 66,902,126		$ 12,267,640		$ 181,141,687		$ -		$ 260,311,453
Net investment income	28,618,485		312,494		8,651,465		-		37,582,444
Realized gains (losses) on
investments and other assets	(277,040)		211,429		(110,776)		-		(176,387)
Other than temporary impairments	(270,358)		-		-		-		(270,358)
Other revenues	632,260		88,676		6,166,813		-		6,887,749
Intersegment revenues:
Net investment income	7,119,692		691,876		327,778		(8,139,346)		-
Total revenues	102,725,165		13,572,115		196,176,967		(8,139,346)		304,334,901
Expenses:
Death and other policy benefits	33,387,380		-		-		-		33,387,380
Increase in future policy benefits	21,322,195		-		-		-		21,322,195
Amortization of deferred policy and preneed acquisition costs and
value of business acquired	7,647,097		356,078		-		-		8,003,175
Depreciation	596,827		390,362		1,195,535		-		2,182,724
General, administrative and
other costs:
Intersegment	-		148,025		219,974		(367,999)		-
Provision for loan losses	-		-		1,700,000		-		1,700,000
Costs related to funding mortgage
loans	-		-		9,191,488		-		9,191,488
Other	29,478,156		10,524,535		163,730,148		1		203,732,840
Interest expense:
Intersegment	781,078		651,046		6,339,224		(7,771,348)		-
Other	1,654,264		282,878		3,174,726		-		5,111,868
Total benefits and expenses	94,866,997		12,352,924		185,551,095		(8,139,346)		284,631,670
Earnings before income taxes	$ 7,858,168		$ 1,219,191		$ 10,625,872		$ -		$ 19,703,231
Income tax expense	(3,451,292)		-		(4,063,312)		-		(7,514,604)
Net earnings	$ 4,406,876		$ 1,219,191		$ 6,562,560		$ -		$ 12,188,627

Identifiable assets	$ 821,097,220		$ 99,611,263		$ 171,844,559		$ (140,874,459)		$ 951,678,583

Goodwill	$ 2,765,570		$ -		$ -		$ -		$ 2,765,570

Expenditures for long-lived assets	$ 532,958		$ 723,445		$ 2,310,108		$ -		$ 3,566,511

	2015 (As Restated)
	Life		Cemetery/				Intercompany
	Insurance		Mortuary		Mortgage		Eliminations		Consolidated
Revenues:
From external sources:
Revenue from customers	$ 58,883,721		$ 11,502,045		$ 169,043,426		$ -		$ 239,429,192
Net investment income	25,297,486		450,854		8,259,564		-		34,007,904
Realized gains (losses) on
investments and other assets	2,332,456		387,316		(318,413)		-		2,401,359
Other than temporary impairments	(413,714)		-		(191,716)		-		(605,430)
Other revenues	824,759		146,831		4,150,217		-		5,121,807
Intersegment revenues:
Net investment income	7,615,338		1,155,180		326,822		(9,097,340)		-
Total revenues	94,540,046		13,642,226		181,269,900		(9,097,340)		280,354,832
Expenses:
Death and other policy benefits	33,549,893		-		-		-		33,549,893
Increase in future policy benefits	17,057,764		-		-		-		17,057,764
Amortization of deferred policy and preneed acquisition costs and
value of business acquired	5,306,781		334,512		-		-		5,641,293
Depreciation	710,733		403,066		1,069,697		-		2,183,496
General, administrative and
other costs:
Intersegment	-		156,777		199,244		(356,021)		-
Provision for loan losses	-		-		3,449,103		-		3,449,103
Costs related to funding mortgage
loans	-		-		8,901,511		-		8,901,511
Other	27,416,860		10,117,012		146,565,817		(1)		184,099,688
Interest expense:
Intersegment	726,919		1,379,668		6,634,731		(8,741,318)		-
Other	1,151,860		337,632		2,969,120		-		4,458,612
Total benefits and expenses	85,920,810		12,728,667		169,789,223		(9,097,340)		259,341,360
Earnings before income taxes	$ 8,619,236		$ 913,559		$ 11,480,677		$ -		$ 21,013,472
Income tax expense	(3,191,370)		-		(4,470,661)		-		(7,662,031)
Net earnings	$ 5,427,866		$ 913,559		$ 7,010,016		$ -		$ 13,351,441

Identifiable assets	$ 721,362,741		$ 101,935,898		$ 157,283,191		$ (140,108,664)		$ 840,473,166

Goodwill	$ 2,765,570		$ -		$ -		$ -		$ 2,765,570

Expenditures for long-lived assets	$ 3,024,223		$ 154,226		$ 454,241		$ -		$ 3,632,690

	2014 (As Restated)
	Life		Cemetery/				Intercompany
	Insurance		Mortuary		Mortgage		Eliminations		Consolidated
Revenues:
From external sources:
Revenue from customers	$ 57,037,623		$ 11,426,308		$ 122,778,529		$ -		$ 191,242,460
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		131,460,445		(8,060,125)		225,047,149
Expenses:
Death and other policy benefits	29,789,964		-		-		-		29,789,964
Increase in future policy benefits	17,905,914		-		-		-		17,905,914
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	-		-		1,000,000		-		1,000,000
Costs related to funding mortgage
loans	-		-		6,451,319		-		6,451,319
Other	23,045,928		10,245,144		110,817,359		(2)		144,108,429
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	79,275,342		13,082,239		127,022,742		(8,060,125)		211,320,198
Earnings before income taxes	$ 8,625,992		$ 663,256		$ 4,437,703		$ -		$ 13,726,951
Income tax expense	(3,796,327)		-		(1,713,792)		-		(5,510,119)
Net earnings	$ 4,829,665		$ 663,256		$ 2,723,911		$ -		$ 8,216,832

Identifiable assets	$ 652,348,803		$ 109,114,226		$ 130,972,484		$ (142,742,671)		$ 749,692,842

Goodwill	$ 2,765,570		$ -		$ -		$ -		$ 2,765,570

Expenditures for long-lived assets	$ 660,830		$ 121,677		$ 737,936		$ -		$ 1,520,443