XML 38 R14.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Debt | 12 Months Ended
--- | ---
Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt | NOTE 7. DEBT The Company designates debt obligations as either short-term or long-term based on maturity date at issuance. Total amortized cost of Long-term Debt, Current and Non-current, outstanding at December 31, 2016 and 2015 was:
DOLLARS IN MILLIONS |  | 2016 |  | 2015
Senior Notes: |  |  |  |
6.00% Senior Notes due May 15, 2017 |  | $ | 359.8 |  |  | $ | 359.1 |
4.35% Senior Notes due February 15, 2025 |  | 247.7 |  |  | 247.4 |
7.375% Subordinated Debentures due February 27, 2054 |  | 144.1 |  |  | 144.1 |
Total Long-term Debt, Current and Non-current, Outstanding |  | $ | 751.6 |  |  | $ | 750.6 |
NOTE 7. DEBT (Continued) Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, for the years ended December 31, 2016, 2015 and 2014 was:
DOLLARS IN MILLIONS |  | 2016 |  | 2015 |  | 2014
Notes Payable under Revolving Credit Agreement |  | $ | 0.8 |  |  | $ | 0.8 |  |  | $ | 0.8 |
Federal Home Loan Bank of Dallas |  | — |  |  | — |  |  | — |
Federal Home Loan Bank of Chicago |  | — |  |  | — |  |  | — |
Senior Notes Payable: |  |  |  |  |  |
6.00% Senior Notes due November 30, 2015 |  | — |  |  | 3.7 |  |  | 15.5 |
6.00% Senior Notes due May 15, 2017 |  | 22.3 |  |  | 22.2 |  |  | 22.2 |
4.35% Senior Notes due February 15, 2025 |  | 11.1 |  |  | 9.5 |  |  | — |
7.375% Subordinated Debentures due February 27, 2054 |  | 11.1 |  |  | 11.1 |  |  | 9.4 |
Interest Expense before Capitalization of Interest |  | 45.3 |  |  | 47.3 |  |  | 47.9 |
Capitalization of Interest |  | (0.9 | ) |  | (0.8 | ) |  | (1.0 | )
Total Interest Expense |  | $ | 44.4 |  |  | $ | 46.5 |  |  | $ | 46.9 |
Interest Paid, including facility fees, for the years ended December 31, 2016, 2015 and 2014 was:
DOLLARS IN MILLIONS |  | 2016 |  | 2015 |  | 2014
Notes Payable under Revolving Credit Agreement |  | $ | 0.6 |  |  | $ | 1.4 |  |  | $ | 0.6 |
Federal Home Loan Bank of Dallas |  | — |  |  | — |  |  | — |
Federal Home Loan Bank of Chicago |  | — |  |  | — |  |  | — |
Senior Notes Payable: |  |  |  |  |  |
6.00% Senior Notes due November 30, 2015 |  | — |  |  | 4.8 |  |  | 15.0 |
6.00% Senior Notes due May 15, 2017 |  | 21.6 |  |  | 21.6 |  |  | 21.6 |
4.35% Senior Notes due February 15, 2025 |  | 10.9 |  |  | 5.2 |  |  | — |
7.375% Subordinated Debentures due February 27, 2054 |  | 11.1 |  |  | 11.1 |  |  | 8.5 |
Total Interest Paid |  | $ | 44.2 |  |  | $ | 44.1 |  |  | $ | 45.7 |
Kemper has a $225.0 million, unsecured, revolving credit agreement expiring June 2, 2020. The credit agreement provides for fixed and floating rate advances for periods up to six months at various interest rates. The credit agreement contains various financial covenants, including limits on total debt to total capitalization, consolidated net worth and minimum risk-based capital ratios for Kemper’s largest insurance subsidiaries, Trinity and United Insurance. Proceeds from advances under the credit agreement may be used for general corporate purposes, including repayment of existing indebtedness. There were no outstanding borrowings under the credit agreement at either December 31, 2016 or December 31, 2015. Trinity and United Insurance are members of the FHLB of Dallas and Chicago, respectively. During 2016 and 2015, Trinity borrowed and repaid $10.0 million and $77.5 million, respectively, under its agreement with the FHLB of Dallas. During 2015, United Insurance borrowed and repaid $21.0 million under its agreement with the FHLB of Chicago. There were no advances from the FHLB of Dallas or Chicago outstanding at either December 31, 2016 or December 31, 2015. On February 24, 2015, Kemper issued $250.0 million of its 4.35% senior notes due February 15, 2025 (the “2025 Senior Notes”). The net proceeds of the issuance were $247.3 million, net of discount and transaction costs, for an effective yield of 4.49%. The 2025 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time at Kemper’s option at specified redemption prices. Kemper used the net proceeds from the sale of the 2025 Senior Notes, together with available cash, to redeem in full the $250.0 million outstanding principal amount of its 6.00% senior notes due November 30, 2015. Kemper recognized a loss of $9.1 million before income taxes in the first quarter of 2015 from the early redemption of these senior notes. NOTE 7. DEBT (Continued) On February 27, 2014, Kemper issued $150.0 million of its 7.375% subordinated debentures due February 27, 2054 (the “2054 Debentures”). The net proceeds of the issuance were $144.0 million, net of discount and transaction costs, for an effective yield of 7.69%. The subordinated debentures are unsecured and are subordinated and junior to the senior indebtedness of Kemper. Interest on the subordinated debentures is payable quarterly. As long as no event of default has occurred, Kemper may defer interest payments on the subordinated debentures for up to five consecutive years without giving rise to an event of default. During a deferral period, interest will continue to accrue at the stated interest rate compounded quarterly. Kemper is permitted to redeem some or all of the subordinated debentures on or after February 27, 2019, at a redemption price that is equal to their principal amount plus accrued and unpaid interest. Kemper is permitted to redeem the subordinated debentures in whole, but not in part, at any time prior to February 27, 2019, within 90 days of the occurrence of certain tax events or rating agency events, at specified redemption prices. The Company anticipates issuing at least $250.0 million in 10-year senior notes in the second quarter of 2017 to replace its Senior Notes due May 15, 2017. For risk management purposes, during the fourth quarter of 2016, the Company entered into a derivative transaction to hedge the risk of changes in the debt cash flows attributable to changes in the benchmark U.S. Treasury interest rate during the period leading up to the probable debt issuance (“Treasury Lock”). The Treasury Lock was formally designated as a cash flow hedge at inception and qualified for hedge accounting treatment. As such, the effective portion of the gain or loss on the derivative instrument is reported as a component of Other Comprehensive Income and will be amortized into earnings in the same periods that the hedged items affect earnings. The amortization will be included in Interest and Other Expenses, which is the same line item associated with the forecasted transaction. The ineffective portion of the change in fair value of the derivative instrument, if any, is recognized immediately in earnings. The fair value of the Treasury Lock of $1.6 million at December 31, 2016 has been included in Other Assets in the Consolidated Balance Sheet. As the entire amount of the change in fair value during the year was deemed effective, all of the change has been included entirely in Other Comprehensive Income for the year ended December 31, 2016. As the hedged transaction has yet to occur, no amounts have been reclassified from Other Comprehensive Income into earnings. If debt is issued in the second quarter of 2017 and its terms are consistent with what has been anticipated, the Company expects to reclassify $0.1 million of net gains on derivative instruments from AOCI to earnings for the year ended December 31, 2017 as interest expense on the debt is recognized.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration