Assurant 2013 Annual Report Download - page 74

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ASSURANT, INC. – 2013 Form 10-K62
PART II
ITEM 7A Quantitative and Qualitative Disclosures About Market Risk
The table below shows our cash outfl ows for taxes, interest and dividends for the periods indicated:
For the Years Ended December 31,
2013 2012 2011
Income taxes paid $ 132,487 $ 289,850 $ 223,950
Interest paid on debt 70,741 60,188 60,244
Common stock dividends 74,128 69,393 67,385
TOTAL $ 277,356 $ 419,431 $ 351,579
Commitments and Contingencies
We have obligations and commitments to third parties as a result of our operations. These obligations and commitments,
as of December 31, 2013, are detailed in the table below by maturity date as of the dates indicated:
As of December 31, 2013
Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
Contractual obligations:
Insurance liabilities(1) $ 19,149,913 $ 1,762,594 $ 1,694,325 $ 1,585,369 $ 14,107,625
Debt and related interest 2,486,049 536,205 109,625 455,250 1,384,969
Operating leases 112,287 27,770 43,129 24,994 16,394
Pension obligations and postretirement benefi t 662,569 46,980 119,200 121,900 374,489
Commitments:
Investment purchases outstanding:
Commercial mortgage loans on real estate 16,625 16,625 0 0 0
Capital contributions to real estate joint ventures 26,815 26,815 0 0 0
Liability for unrecognized tax benefi t 12,510 4,641 6,366 (942) 2,445
TOTAL OBLIGATIONS AND COMMITMENTS $ 22,466,768 $ 2,421,630 $ 1,972,645 $ 2,186,571 $ 15,885,922
(1) Insurance liabilities reflect estimated cash payments to be made to policyholders.
Liabilities for future policy benefi ts and expenses of $8,646,572
and claims and benefi ts payable of $3,389,371 have been
included in the commitments and contingencies table.
Signifi cant uncertainties relating to these liabilities include
mortality, morbidity, expenses, persistency, investment
returns, infl ation, contract terms and the timing of payments.
Letters of Credit
In the normal course of business, letters of credit are issued
primarily to support reinsurance arrangements. These letters
of credit are supported by commitments with fi nancial
institutions. We had approximately $17,343 and $19,760 of
letters of credit outstanding as of December 31, 2013 and
December 31, 2012, respectively.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet
arrangements that are reasonably likely to have a material
effect on the fi nancial condition, results of operations,
liquidity, or capital resources of the Company.
ITEM 7A Quantitative and Qualitative Disclosures
About Market Risk
As a provider of insurance products, effective risk management
is fundamental to our ability to protect both our customers’
and stockholders’ interests. We are exposed to potential loss
from various market risks, in particular interest rate risk and
credit risk. Additionally, we are exposed to infl ation risk and
to a lesser extent foreign currency risk.
Interest rate risk is the possibility that the fair value of
liabilities will change more or less than the market value of
investments in response to changes in interest rates, including
changes in investment yields and changes in spreads due to
credit risks and other factors.