Assurant 2015 Annual Report Download - page 72

60 ASSURANT, INC. – 2015 Form 10-K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
In addition, during 2014, we had two series of senior notes
outstanding in an aggregate principal amount of $975,000
(the “2004 Senior Notes”). The rst series was $500,000 in
principal amount, bore interest at 5�63% per year and was
repaid on February 18, 2014� The second series is $475,000
in principal amount, bears interest at 6�75% per year and is
due February 15, 2034�
Interest on our 2004 Senior Notes is payable semi-annually on
February 15 and August 15 of each year� The interest expense
incurred related to the 2004 Senior Notes was $32,127, $35,414
and $59,414 for the years ended December 31, 2015, 2014,
and 2013, respectively� There was $12,023 of accrued interest
at both December 31, 2015 and 2014� The 2004 Senior Notes
are unsecured obligations and rank equally with all of our
other senior unsecured indebtedness� The 2004 Senior Notes
are not redeemable prior to maturity�
In management’s opinion, dividends from our subsidiaries
together with our income and gains from our investment
portfolio will provide sufcient liquidity to meet our needs
in the ordinary course of business�
Cash Flows
We monitor cash ows at the consolidated, holding company
and subsidiary levels. Cash ow forecasts at the consolidated
and subsidiary levels are provided on a monthly basis, and
we use trend and variance analyses to project future cash
needs making adjustments to the forecasts when needed�
The table below shows our recent net cash ows:
For the Years Ended December 31,
2015 2014 2013
Net cash provided by (used in):
Operating activities(1) $ 192,483 $ 313,782 $ 1,003,819
Investing activities 264,293 63,889 (392,738)
Financing activities (487,127) (776,199) 196,699
NET CHANGE IN CASH $ (30,351) $ (398,528) $ 807,780
(1) Includes effect of exchange rates changes and the reclassification of assets held for sale on cash and cash equivalents.
Cash Flows for the Years Ended December 31,
2015, 2014 and 2013
Operating Activities:
We typically generate operating cash inows from premiums
collected from our insurance products and income received
from our investments while outows consist of policy
acquisition costs, benets paid, and operating expenses. These
net cash ows are then invested to support the obligations
of our insurance products and required capital supporting
these products. Our cash ows from operating activities are
affected by the timing of premiums, fees, and investment
income received and expenses paid�
Net cash provided by operating activities was $192,483 and
$313,782 for the years ended December 31, 2015 and 2014,
respectively� The decrease in cash provided by operating
activities was primarily due to changes in the timing of
payments and higher payments made on 2015 individual
major medical policies�
Net cash provided by operating activities was $313,782 and
$1,003,819 for the years ended December 31, 2014 and 2013,
respectively� The decrease in cash provided by operating
activities was primarily due to changes in the timing of
payments and by amounts yet to be recovered under the 3R’s
program, partially offset by increased net written premiums
in Assurant Solutions, Assurant Health and Assurant Employee
Benets. For more information on the 3R’s, please refer to
Assurant Health’s Results of Operations section in this Item 7�
Investing Activities:
Net cash provided by investing activities was $264,293 and
$63,889 for the years ended December 31, 2015 and 2014,
respectively� The change in investing activities is primarily
due to higher sales of xed maturity securities, less cash
spent on acquisitions and equity interests and the sale of
ARIC to Global Indemnity Group Inc� during 2015� For more
information on the ARIC sale, please see Note 4 to the
Consolidated Financial Statements contained elsewhere in
this report� These increases are partially offset by changes
in our short-term investments and an increase of purchases
of xed maturity securities.
Net cash provided by (used in) investing activities was $63,889
and $(392,738) for the years ended December 31, 2014
and 2013, respectively� The change in investing activities
is primarily due to decreased purchases of xed maturity
securities and less cash spent on acquisitions and equity
interests, partially offset by a decrease in sales of xed
maturity securities� For more information on acquisitions,
please see Note 4 to the Consolidated Financial Statements
contained elsewhere in this report�
Financing Activities:
Net cash used in nancing activities was $487,127 and $776,199
for the years ended December 31, 2015 and 2014, respectively�
The change in cash used in nancing activities was primarily
due to the First Quarter 2014 repayment of $467,330 of senior
debt, which represents $500,000 in principal less amounts
repurchased in 2013, and the payment of a contingent liability
related to the acquisition of LSG during First Quarter 2014�