AFFIRMATIVE INSURANCE HOLDINGS INC

CIK:0001282543|SEC Filings

Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2015

Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss)

12.	Disclosures for Items Reclassified Out of Accumulated Other Comprehensive Income (Loss)

The following table sets forth the components of accumulated other comprehensive income (loss), including reclassification adjustments for the three months ended March 31, 2015 and 2014 (in thousands):

	2015			2014
Beginning balance	$	(1,536	)	$	(1,654	)
Other comprehensive income before reclassifications		118			219
Amounts reclassified from accumulated other comprehensive income (loss)		74			—
Net current period other comprehensive income		192			219
Ending balance	$	(1,344	)	$	(1,435	)

Net loss in accumulated other comprehensive income (loss) reclassifications for previously unrealized net loss on available-for-sale securities was $74,000 for the three months ended March 31, 2015. The loss was not net of any taxes due to the valuation allowance for deferred income taxes.

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities
Net income (loss)	$ (1,980)us-gaap_NetIncomeLoss	$ 664us-gaap_NetIncomeLoss
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,430	1,676
Stock-based compensation expense	110us-gaap_ShareBasedCompensation	15us-gaap_ShareBasedCompensation
Amortization of debt issuance costs	411us-gaap_AmortizationOfFinancingCosts	502us-gaap_AmortizationOfFinancingCosts
Amortization of debt discount	99	408
Net realized losses from sales of available-for-sale securities	74
Fair value gain on investment in hedge fund	(59)	(127)
Amortization of premiums on investments, net	97	148
Provision for doubtful accounts		(6)
Paid-in-kind interest	1,522us-gaap_PaidInKindInterest	667us-gaap_PaidInKindInterest
Change in operating assets and liabilities:
Fiduciary and restricted cash	1,991	(407)
Premiums, fees and commissions receivable, net	(12,665)	(19,631)
Reserves for losses and loss adjustment expenses	(9,857)	(8,786)
Amounts due from reinsurers	15,168	235
Due to third-party carriers	(302)	257
Deferred revenue	571	891
Unearned premium	5,045	18,852
Deferred acquisition costs, net	(3,541)	(8,785)
Income taxes	188	(1,928)
Other	161	1,986
Net cash used in operating activities	(1,537)	(13,369)
Cash flows from investing activities
Fiduciary and restricted cash	(1,200)us-gaap_IncreaseInRestrictedCash	(4,800)us-gaap_IncreaseInRestrictedCash
Proceeds from sales of available-for-sale securities	5,734	198
Proceeds from maturities of available-for-sale securities	1,060	11,735
Purchases of available-for-sale securities	(212)	(10,000)
Purchases of property and equipment		(154)
Net cash provided by (used in) investing activities	5,382	(3,021)
Cash flows from financing activities
Proceeds from financing under capital lease obligations		4,858
Principal payments under capital lease obligations	(1,656)	(1,547)
Principal payments on mortgage security agreement	(448)us-gaap_RepaymentsOfOtherDebt	(426)us-gaap_RepaymentsOfOtherDebt
Debt issuance costs paid	(149)us-gaap_PaymentsOfDebtIssuanceCosts
Bank overdrafts	2,165	1,117
Net cash provided by (used in) financing activities	(88)	4,002
Net increase (decrease) in cash and cash equivalents	3,757	(12,388)
Cash and cash equivalents at beginning of year	23,863	44,569
Cash and cash equivalents at end of period	27,620	32,181
Supplemental disclosure of cash flow information:
Cash paid for interest	1,029us-gaap_InterestPaid	1,154us-gaap_InterestPaid
Cash paid for income taxes	12us-gaap_IncomeTaxesPaid	1,634us-gaap_IncomeTaxesPaid
Disclosure of non-cash information:
Senior secured credit facility amendment closing fee capitalized to loan balance	$ 713affm_IncrementalTermLoanClosingFee

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Available-for-sale securities, at fair value	$ 26,724	$ 33,285
Other invested assets	4,560us-gaap_OtherInvestments	4,501us-gaap_OtherInvestments
Cash and cash equivalents	27,620	23,863
Fiduciary and restricted cash	4,003	4,794
Accrued investment income	284	149
Premiums and fees receivable, net	65,182us-gaap_PremiumsAndOtherReceivablesNet	53,167us-gaap_PremiumsAndOtherReceivablesNet
Commissions receivable	1,137	487
Receivable from reinsurers	147,405us-gaap_ReinsuranceRecoverables	182,804us-gaap_ReinsuranceRecoverables
Income taxes receivable		149us-gaap_IncomeTaxReceivable
Investment in real property, net	9,378us-gaap_RealEstateInvestmentPropertyNet	9,558us-gaap_RealEstateInvestmentPropertyNet
Property and equipment (net of accumulated depreciation of $60,377 for 2015 and $59,127 for 2014)	7,139us-gaap_PropertyPlantAndEquipmentNet	8,389us-gaap_PropertyPlantAndEquipmentNet
Other intangible assets (net of accumulated amortization of $7,765 for 2015 and 2014)	1,500	1,500
Prepaid expenses	5,915	5,623
Other assets (net of allowance for doubtful accounts of $576 for 2015 and 2014)	11,547us-gaap_OtherAssets	9,420us-gaap_OtherAssets
Total assets	312,394us-gaap_Assets	337,689us-gaap_Assets
Liabilities:
Reserves for losses and loss adjustment expenses	122,895	132,752
Unearned premium	89,100us-gaap_UnearnedPremiums	84,055us-gaap_UnearnedPremiums
Amounts due to reinsurers	59,895us-gaap_ReinsurancePayable	80,126us-gaap_ReinsurancePayable
Due to third-party carriers	4,804affm_DueToThirdPartiesCurrent	5,106affm_DueToThirdPartiesCurrent
Deferred revenue	7,108us-gaap_DeferredRevenue	6,537us-gaap_DeferredRevenue
Capital lease obligation	1,688us-gaap_CapitalLeaseObligations	3,344us-gaap_CapitalLeaseObligations
Debt	124,512us-gaap_LongTermDebt	123,341us-gaap_LongTermDebt
Income taxes payable	39us-gaap_AccruedIncomeTaxes
Deferred acquisition costs, net liability	673	4,214
Other liabilities	37,757us-gaap_OtherLiabilities	32,613us-gaap_OtherLiabilities
Total liabilities	448,471us-gaap_Liabilities	472,088us-gaap_Liabilities
Stockholders’ deficit:
Common stock, $0.01 par value; 75,000,000 shares authorized, 18,949,220 shares issued and 16,155,357 shares outstanding at March 31, 2015 and December 31, 2014	190us-gaap_CommonStockValue	190us-gaap_CommonStockValue
Additional paid-in capital	167,733	167,623
Treasury stock, at cost (2,793,863 shares at March 31, 2015 and December 31, 2014)	(32,910)us-gaap_TreasuryStockValue	(32,910)us-gaap_TreasuryStockValue
Accumulated other comprehensive loss	(1,344)	(1,536)
Retained deficit	(269,746)	(267,766)
Total stockholders’ deficit	(136,077)us-gaap_StockholdersEquity	(134,399)us-gaap_StockholdersEquity
Total liabilities and stockholders’ deficit	$ 312,394	$ 337,689