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Schedule 2 - Parent Company Financial Statements | 12 Months Ended
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Dec. 31, 2019
Condensed Financial Information Disclosure [Abstract] |
Parent Company Financial Statements | SCHEDULE II KEMPER CORPORATION PARENT COMPANY BALANCE SHEETS (Dollars in Millions)
|  | December 31,
|  | 2019 |  | 2018
ASSETS |  |  |  |
Investments in Subsidiaries |  | $ | 4,383.7 |  |  | $ | 3,736.0 |
Fixed Maturities at Fair Value (Amortized Cost: 2018 – $12.6) |  | — |  |  | 12.6 |
Equity Securities at Fair Value |  | 55.7 |  |  | 20.4 |
Short-term Investments |  | 89.3 |  |  | 64.6 |
Cash |  | 61.8 |  |  | 2.9 |
Other Receivables |  | 21.9 |  |  | 5.7 |
Other Assets |  | 21.9 |  |  | 14.4 |
Right-of-Use Assets |  | 18.6 |  |  | — |
Total Assets |  | $ | 4,652.9 |  |  | $ | 3,856.6 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |
Term Loan due June 29, 2020 (Fair Value: 2018 – $35.0) |  | — |  |  | 34.9 |
Term Loan due July 5, 2023 (Fair Value: 2019 – $50.0) |  | 49.9 |  |  | — |
Senior Notes Payable, 4.35% due 2025 (Fair Value: 2019 – $478.6; 2018 – $444.2) |  | 448.6 |  |  | 448.4 |
Subordinated Debentures due 2054 (Fair Value: 2018 – $151.1) |  | — |  |  | 144.2 |
Current Income Tax Liability |  | 55.3 |  |  | 40.5 |
Deferred Income Tax Liability |  | 32.2 |  |  | 20.2 |
Liabilities for Benefit Plans |  | 44.3 |  |  | 98.2 |
Right-of-Use Liabilities |  | 31.3 |  |  | — |
Accrued Expenses and Other Liabilities |  | 19.0 |  |  | 20.1 |
Total Liabilities |  | 680.6 |  |  | 806.5 |
Shareholders’ Equity: |  |  |  |
Common Stock |  | 6.7 |  |  | 6.5 |
Additional Paid-in Capital |  | 1,819.2 |  |  | 1,666.3 |
Retained Earnings |  | 1,810.3 |  |  | 1,355.5 |
Accumulated Other Comprehensive Income |  | 336.1 |  |  | 21.8 |
Total Shareholders’ Equity |  | 3,972.3 |  |  | 3,050.1 |
Total Liabilities and Shareholders’ Equity |  | $ | 4,652.9 |  |  | $ | 3,856.6 |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION PARENT COMPANY STATEMENTS OF INCOME (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Net Investment Income |  | $ | 2.1 |  |  | $ | 2.5 |  |  | $ | 3.0 |
Income from Change in Fair Value of Equity Securities |  | 1.6 |  |  | 1.4 |  |  | — |
Net Realized Gains (Losses) on Sales of Investments |  | 0.3 |  |  | (0.7 | ) |  | 0.6 |
Total Revenues |  | 4.0 |  |  | 3.2 |  |  | 3.6 |
Interest Expense |  | 28.5 |  |  | 37.6 |  |  | 36.6 |
Loss from Early Extinguishment of Debt |  | 5.8 |  |  | — |  |  | — |
Other Operating (Benefits) Expenses |  | 4.0 |  |  | 26.3 |  |  | (5.1 | )
Total Operating Expenses |  | 38.3 |  |  | 63.9 |  |  | 31.5 |
Loss before Income Taxes and Equity in Net Income of Subsidiaries |  | (34.3 | ) |  | (60.7 | ) |  | (27.9 | )
Income Tax Benefit |  | 9.4 |  |  | 12.2 |  |  | 21.2 |
Loss before Equity in Net Income of Subsidiaries |  | (24.9 | ) |  | (48.5 | ) |  | (6.7 | )
Equity in Net Income of Subsidiaries |  | 556.0 |  |  | 238.6 |  |  | 127.6 |
Net Income |  | $ | 531.1 |  |  | $ | 190.1 |  |  | $ | 120.9 |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Net Income |  | $ | 531.1 |  |  | $ | 190.1 |  |  | $ | 120.9 |
Other Comprehensive Income (Loss): |  |  |  |  |  |
Unrealized Holding Gains (Losses) Arising During the Year: |  |  |  |  |  |
Securities Held by Subsidiaries |  | 433.2 |  |  | (214.1 | ) |  | 119.5 |
Securities Held by Parent |  | 0.2 |  |  | (0.1 | ) |  | (0.4 | )
Reclassification Adjustment for Amounts Included in Net Income: |  |  |  |  |  |
Securities Held by Subsidiaries |  | (27.9 | ) |  | (21.9 | ) |  | (35.3 | )
Securities Held by Parent |  | (0.2 | ) |  | — |  |  | — |
Unrealized Holding Gains (Losses) |  | 405.3 |  |  | (236.1 | ) |  | 83.8 |
Unrecognized Postretirement Benefit Costs Arising During the Year: |  |  |  |  |  |
Securities Held by Subsidiaries |  | (0.6 | ) |  | — |  |  | — |
Securities Held by Parent |  | (4.2 | ) |  | (8.0 | ) |  | 3.9 |
Reclassification Adjustments for Amounts Included in Net Income: |  |  |  |  |  |
Amortization of Unrecognized Postretirement Benefits (Costs) |  | (3.0 | ) |  | 1.1 |  |  | (0.6 | )
Total Reclassification Adjustments for Amounts Included in Net Income |  | (3.0 | ) |  | 1.1 |  |  | (0.6 | )
Net Unrecognized Postretirement Benefit Costs |  | (7.8 | ) |  | (6.9 | ) |  | 3.3 |
Foreign Currency Translation Adjustments on Investments Held by Subsidiaries |  | — |  |  | 0.3 |  |  | 1.7 |
Gains (Losses) on Cash Flow Hedge |  | 0.4 |  |  | 1.2 |  |  | (6.7 | )
Other Comprehensive Income (Loss) before Income Taxes |  | 397.9 |  |  | (241.5 | ) |  | 82.1 |
Income Tax Benefit (Expense): |  |  |  |  |  |
Unrealized Holding Gains and Losses Arising During the Year: |  |  |  |  |  |
Securities Held by Subsidiaries |  | (91.0 | ) |  | 45.0 |  |  | (38.3 | )
Securities Held by Parent |  | — |  |  | — |  |  | 0.1 |
Reclassification Adjustment for Amounts Included in Net Income: |  |  |  |  |  |
Securities Held by Subsidiaries |  | 5.8 |  |  | 4.6 |  |  | 12.3 |
Unrealized Holding Gains and Losses |  | (85.2 | ) |  | 49.6 |  |  | (25.9 | )
Unrecognized Postretirement Benefit Costs Arising During the Year |  | 1.0 |  |  | 1.7 |  |  | (0.8 | )
Reclassification Adjustments for Amounts Included in Net Income: |  |  |  |  |  |
Amortization of Unrecognized Postretirement Benefit Costs |  | 0.7 |  |  | (0.2 | ) |  | 0.2 |
Total Reclassification Adjustments for Amounts Included in Net Income |  | 0.7 |  |  | (0.2 | ) |  | 0.2 |
Net Unrecognized Postretirement Benefit Costs |  | 1.7 |  |  | 1.5 |  |  | (0.6 | )
Foreign Currency Translation Adjustments on Investments Held by Subsidiaries |  | — |  |  | (0.1 | ) |  | (0.6 | )
Gains (Losses) on Cash Flow Hedge |  | (0.1 | ) |  | (0.3 | ) |  | 2.4 |
Income Tax Benefit (Expense) |  | (83.6 | ) |  | 50.7 |  |  | (24.7 | )
Other Comprehensive Income (Loss) |  | 314.3 |  |  | (190.8 | ) |  | 57.4 |
Total Comprehensive Income (Loss) |  | $ | 845.4 |  |  | $ | (0.7 | ) |  | $ | 178.3 |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION PARENT COMPANY STATEMENTS OF CASH FLOWS (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Operating Activities: |  |  |  |  |  |
Net Income |  | $ | 531.1 |  |  | $ | 190.1 |  |  | $ | 120.9 |
Adjustment Required to Reconcile Net Income to Net Cash Provided by Operations: |  |  |  |  |  |
Equity in Net Income of Subsidiaries |  | (556.0 | ) |  | (238.6 | ) |  | (127.6 | )
Cash Dividends from Subsidiaries |  | 239.0 |  |  | 130.4 |  |  | 108.1 |
Cash Contribution to Defined Benefit Plan |  | (55.3 | ) |  | (5.0 | ) |  | — |
Increase in Value of Equity Securities at Fair Value |  | (1.6 | ) |  | (1.4 | ) |  | — |
Net Realized (Gains) Losses on Sales of Investments |  | (0.3 | ) |  | 0.7 |  |  | (0.6 | )
Loss from Early Extinguishment of Debt |  | 5.8 |  |  | — |  |  | — |
Other, Net |  | 9.8 |  |  | 29.6 |  |  | 0.7 |
Net Cash Provided by Operating Activities |  | 172.5 |  |  | 105.8 |  |  | 101.5 |
Investing Activities: |  |  |  |  |  |
Capital Contributed to Subsidiaries |  | (83.0 | ) |  | (20.0 | ) |  | — |
Capital Distribution from Subsidiary |  | 85.0 |  |  | 176.0 |  |  | — |
Sales, Paydowns and Maturities of Fixed Maturities |  | 12.7 |  |  | (0.2 | ) |  | 45.7 |
Purchases of Equity Securities |  | (48.9 | ) |  | (2.3 | ) |  | — |
Sales of Equity Securities |  | 15.3 |  |  | 67.5 |  |  | — |
Sales of Fair Value Option Investments |  | — |  |  | — |  |  | 42.2 |
Purchases of Fair Value Option Investments |  | — |  |  | — |  |  | (7.0 | )
Acquisition of Business |  | — |  |  | (564.6 | ) |  | — |
Change in Short-term Investments |  | (23.3 | ) |  | 253.4 |  |  | 15.6 |
Net Cash Provided (Used) by Investing Activities |  | (42.2 | ) |  | (90.2 | ) |  | 96.5 |
Financing Activities: |  |  |  |  |  |
Notes Payable Proceeds: |  |  |  |  |  |
Net Proceeds from Issuance of Debt |  | 49.9 |  |  | 249.4 |  |  | 200.2 |
Repayments of Debt |  | (185.0 | ) |  | (215.0 | ) |  | (360.0 | )
Proceeds from Issuance of Common Stock, Net of Transaction Costs |  | 127.5 |  |  | — |  |  | — |
Cash Dividends Paid |  | (67.8 | ) |  | (56.4 | ) |  | (49.5 | )
Proceeds from Shares Issued under Employee Stock Purchase Plan |  | 1.6 |  |  | — |  |  | — |
Cash Exercise of Stock Options |  | 2.4 |  |  | 0.9 |  |  | 4.0 |
Net Cash Used by Financing Activities |  | (71.4 | ) |  | (21.1 | ) |  | (205.3 | )
Increase (Decrease) in Cash |  | 58.9 |  |  | (5.5 | ) |  | (7.3 | )
Cash, Beginning of Year |  | 2.9 |  |  | 8.4 |  |  | 15.7 |
Cash, End of Year |  | $ | 61.8 |  |  | $ | 2.9 |  |  | $ | 8.4 |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION Schedule II (Continued) - Financial Information of Kemper Corporation Notes to Financial Information (Dollars in Millions) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial information of Kemper Corporation (“Kemper” or the “Parent Company”) should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Item 8 of this Form 10-K. Kemper’s subsidiaries are accounted for using the equity method of accounting. Equity in net income of these subsidiaries is presented on the Statements of Operations as Equity in Net Income of Subsidiaries. NOTE 2. GUARANTEES On November 30, 2018 Kemper executed a guarantee to fully and unconditionally guarantee the payment and performance obligations of the 5.0% Senior Notes due September 19, 2022 of Infinity Property and Casualty Corporation, a wholly owned subsidiary of Kemper. NOTE 3. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Kemper did no t receive any non-cash dividends from subsidiaries no r make any non-cash capital contributions in 2019. Kemper received non-cash dividends from subsidiaries, in the form of invested assets, of $574 million in 2018. Kemper made non-cash capital contributions, in the form of invested assets, of $350 million in 2018. NOTE 4. LEASES Kemper leases certain office space for its current and former corporate headquarters under non-cancelable operating leases. The following table presents operating lease ROU assets and lease liabilities at December 31, 2019.
DOLLARS IN MILLIONS |  | 2019
Operating Lease Right-of-Use Assets |  | $ | 18.6 |
Operating Lease Liabilities |  | 31.3 |
Supplemental cash flow information related to Kemper’s operating leases for the year-ended December 31, 2019 follows.
DOLLARS IN MILLIONS |  | 2019
Operating Cash Flows from Operating Leases (Fixed Payments) |  | $ | 1.2 |
Operating Cash Flows from Operating Leases (Liability Reduction) |  | 1.0 |
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities |  | 7.9 |
Significant judgments and assumptions for determining lease asset and liability as December 31, 2019 are presented below.
Weighted-average Remaining Lease Term - Operating Leases |  | 13.0 years |
Weighted-average Discount Rate - Operating Leases |  | 4.0 | %
NOTE 4. LEASES (Continued) Kemper’s leases do not provide an implicit rate. Accordingly, Kemper uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of its lease payments. Future minimum operating lease payments at December 31, 2019 were:
DOLLARS IN MILLIONS |  | Operating Leases
2020 |  | $ | 2.1 |
2021 |  | 3.5 |
2022 |  | 3.7 |
2023 |  | 3.5 |
2024 |  | 2.5 |
2025 and Thereafter |  | 25.6 |
Total Future Payments |  | $ | 40.9 |
Less Discount |  | 9.6 |
Present Value of Minimum Lease Payments |  | $ | 31.3 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690 Reference 2: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683 + Details
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