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Schedule 2 - Parent Company Financial Statements (Tables) | 12 Months Ended
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Dec. 31, 2020
Condensed Financial Information Disclosure [Abstract] |
Parent Company Balance Sheets | KEMPER CORPORATION PARENT COMPANY BALANCE SHEETS (Dollars in Millions)
|  | December 31,
|  | 2020 |  | 2019
ASSETS |  |  |  |
Investments in Subsidiaries |  | $ | 4,896.0 |  |  | $ | 4,383.7 |
Fixed Maturities at Fair Value (Amortized Cost: 2020 – $91.8) |  | 99.8 |  |  | — |
Equity Securities at Fair Value (Cost: 2020 - $73.4; 2019 - $53.4) |  | 78.8 |  |  | 55.7 |
Short-term Investments |  | 508.2 |  |  | 89.3 |
Cash |  | 46.0 |  |  | 61.8 |
Other Receivables |  | 1.1 |  |  | 21.9 |
Right-of-Use Assets |  | 13.4 |  |  | 18.6 |
Other Assets |  | 29.2 |  |  | 21.9 |
Total Assets |  | $ | 5,672.5 |  |  | $ | 4,652.9 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |
Term Loan due July 5, 2023 (Fair Value: 2020 – $50.0; 2019 – $50.0) |  | $ | 49.9 |  |  | $ | 49.9 |
Senior Notes Payable, 4.35% due 2025 (Fair Value: 2020 – $499.5; 2019 – $478.6) |  | 448.8 |  |  | 448.6 |
Senior Notes Payable, 2.40% due 2030 (Fair Value: 2020 – $405.6) |  | 395.8 |  |  | — |
Current Income Tax Liability |  | 41.5 |  |  | 55.3 |
Deferred Income Tax Liability |  | 38.9 |  |  | 32.2 |
Liabilities for Benefit Plans |  | 47.6 |  |  | 44.3 |
Lease Liabilities |  | 26.9 |  |  | 31.3 |
Accrued Expenses and Other Liabilities |  | 59.7 |  |  | 19.0 |
Total Liabilities |  | 1,109.1 |  |  | 680.6 |
Shareholders’ Equity: |  |  |  |
Common Stock |  | 6.5 |  |  | 6.7 |
Additional Paid-in Capital |  | 1,805.2 |  |  | 1,819.2 |
Retained Earnings |  | 2,071.2 |  |  | 1,810.3 |
Accumulated Other Comprehensive Income |  | 680.5 |  |  | 336.1 |
Total Shareholders’ Equity |  | 4,563.4 |  |  | 3,972.3 |
Total Liabilities and Shareholders’ Equity |  | $ | 5,672.5 |  |  | $ | 4,652.9 |
See Accompanying Report of Independent Registered Public Accounting Firm.
Parent Company Statements of Income | KEMPER CORPORATION PARENT COMPANY STATEMENTS OF INCOME (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Net Investment Income |  | $ | 1.4 |  |  | $ | 2.1 |  |  | $ | 2.5 |
Income from Change in Fair Value of Equity Securities |  | 4.3 |  |  | 1.6 |  |  | 1.4 |
Net Realized Gains (Losses) on Sales of Investments |  | 0.1 |  |  | 0.3 |  |  | (0.7) |
Total Revenues |  | 5.8 |  |  | 4.0 |  |  | 3.2 |
Interest Expense |  | 24.2 |  |  | 28.5 |  |  | 37.6 |
Loss from Early Extinguishment of Debt |  | — |  |  | 5.8 |  |  | — |
Pension Settlement Expense |  | 64.1 |  |  | — |  |  | — |
Other Operating (Benefits) Expenses |  | (3.6) |  |  | 4.0 |  |  | 26.3 |
Total Operating Expenses |  | 84.7 |  |  | 38.3 |  |  | 63.9 |
Loss before Income Taxes and Equity in Net Income of Subsidiaries |  | (78.9) |  |  | (34.3) |  |  | (60.7) |
Income Tax Benefit |  | 13.4 |  |  | 9.4 |  |  | 12.2 |
Loss before Equity in Net Income of Subsidiaries |  | (65.5) |  |  | (24.9) |  |  | (48.5) |
Equity in Net Income of Subsidiaries |  | 475.4 |  |  | 556.0 |  |  | 238.6 |
Net Income |  | $ | 409.9 |  |  | $ | 531.1 |  |  | $ | 190.1 |
See Accompanying Report of Independent Registered Public Accounting Firm.
Parent Company Statements of Comprehensive Income | KEMPER CORPORATION PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Net Income |  | $ | 409.9 |  |  | $ | 531.1 |  |  | $ | 190.1 |
Other Comprehensive Income (Loss): |  |  |  |  |  |
Changes in Net Unrealized Gains (Losses) on Investment Securities: |  |  |  |  |  |
Having No Credit Losses Recognized in Consolidated Statements of Income |  |  |  |  |  |
Securities Held by Subsidiaries |  | 378.7 |  |  | 433.2 |  |  | (214.1) |
Securities Held by Parent |  | 8.0 |  |  | 0.2 |  |  | (0.1) |
Having Credit Losses Recognized in Consolidated Statements of Income |  |  |  |  |  |
Securities Held by Subsidiaries |  | (2.6) |  |  | — |  |  | — |
Reclassification Adjustment for Amounts Included in Net Income: |  |  |  |  |  |
Securities Held by Subsidiaries |  | (16.6) |  |  | (27.9) |  |  | (21.9) |
Securities Held by Parent |  | (0.1) |  |  | (0.2) |  |  | — |
Changes in Net Unrecognized Postretirement Benefit Costs: |  |  |  |  |  |
Securities Held by Subsidiaries |  | — |  |  | (0.6) |  |  | — |
Securities Held by Parent |  | 3.6 |  |  | (4.2) |  |  | (8.0) |
Reclassification Adjustments for Amounts Included in Net Income: |  |  |  |  |  |
Pension Settlement Cost Recognized |  | 64.1 |  |  | — |  |  | — |
Amortization of Unrecognized Postretirement Benefits (Costs) |  | 2.5 |  |  | (3.0) |  |  | 1.1 |
Total Reclassification Adjustments for Amounts Included in Net Income |  | 66.6 |  |  | (3.0) |  |  | 1.1 |
Net Unrecognized Postretirement Benefit Costs |  | 70.2 |  |  | (7.8) |  |  | (6.9) |
Changes in Foreign Currency Translation Adjustments on Investments Held by Subsidiaries |  | — |  |  | — |  |  | 0.3 |
Changes in Gain (Loss) on Cash Flow Hedges |  | 0.4 |  |  | 0.4 |  |  | 1.2 |
Other Comprehensive Income (Loss) before Income Taxes |  | 438.0 |  |  | 397.9 |  |  | (241.5) |
Income Tax Benefit (Expense): |  |  |  |  |  |
Changes in Net Unrealized Gains (Losses) on Investment Securities: |  |  |  |  |  |
Having No Credit Losses Recognized in Consolidated Statements of Income |  |  |  |  |  |
Securities Held by Subsidiaries |  | (80.6) |  |  | (91.0) |  |  | 45.0 |
Securities Held by Parent |  | (1.7) |  |  | — |  |  | — |
Having Credit Losses Recognized in Consolidated Statements of Income |  |  |  |  |  |
Securities Held by Subsidiaries |  | 0.5 |  |  | — |  |  | — |
Reclassification Adjustment for Amounts Included in Net Income: |  |  |  |  |  |
Securities Held by Subsidiaries |  | 3.5 |  |  | 5.8 |  |  | 4.6 |
Unrecognized Postretirement Benefit Costs Arising During the Year |  | (1.3) |  |  | 1.0 |  |  | 1.7 |
Reclassification Adjustments for Amounts Included in Net Income: |  |  |  |  |  |
Pension Settlement Cost Recognized |  | (13.5) |  |  | — |  |  | — |
Amortization of Unrecognized Postretirement Benefit Costs |  | (0.5) |  |  | 0.7 |  |  | (0.2) |
Total Reclassification Adjustments for Amounts Included in Net Income |  | (14.0) |  |  | 0.7 |  |  | (0.2) |
Net Unrecognized Postretirement Benefit Costs |  | (15.3) |  |  | 1.7 |  |  | 1.5 |
Reclassification Adjustment for Amounts Included in Net Income |  | — |  |  | — |  |  | (0.1) |
Changes in Foreign Currency Translation Adjustments on Investments Held by Subsidiaries |  | — |  |  | — |  |  | (0.1) |
Changes in Gain (Loss) on Cash Flow Hedges |  | — |  |  | (0.1) |  |  | (0.3) |
Income Tax Benefit (Expense) |  | (93.6) |  |  | (83.6) |  |  | 50.7 |
Other Comprehensive Income (Loss) |  | 344.4 |  |  | 314.3 |  |  | (190.8) |
Total Comprehensive Income (Loss) |  | $ | 754.3 |  |  | $ | 845.4 |  |  | $ | (0.7) |
See Accompanying Report of Independent Registered Public Accounting Firm.
Parent Company Statements of Cash Flows | KEMPER CORPORATION PARENT COMPANY STATEMENTS OF CASH FLOWS (Dollars in Millions)
|  | For the Year Ended December 31,
|  | 2020 |  | 2019 |  | 2018
Operating Activities: |  |  |  |  |  |
Net Income |  | $ | 409.9 |  |  | $ | 531.1 |  |  | $ | 190.1 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operations: |  |  |  |  |  |
Equity in Net Income of Subsidiaries |  | (475.4) |  |  | (556.0) |  |  | (238.6) |
Cash Dividends from Subsidiaries |  | 216.2 |  |  | 239.0 |  |  | 130.4 |
Net Realized Investment (Gains) Losses |  | (0.1) |  |  | (0.3) |  |  | 0.7 |
Settlement Costs Related to Defined Benefit Pension Plan |  | 64.1 |  |  | — |  |  | — |
Contribution to Defined Benefit Pension Plan |  | — |  |  | (55.3) |  |  | (5.0) |
Loss from Early Extinguishment of Debt |  | — |  |  | 5.8 |  |  | — |
Decrease (Increase) in Value of Equity and Convertible Securities at Fair Value |  | (4.3) |  |  | (1.6) |  |  | (1.4) |
Other, Net |  | 52.2 |  |  | 9.8 |  |  | 29.6 |
Net Cash Provided by Operating Activities |  | 262.6 |  |  | 172.5 |  |  | 105.8 |
Investing Activities: |  |  |  |  |  |
Capital Contributed to Subsidiaries |  | (62.0) |  |  | (83.0) |  |  | (20.0) |
Capital Distributed from Subsidiaries |  | — |  |  | 85.0 |  |  | 176.0 |
Proceeds from Sales, Calls and Maturities of Fixed Maturities |  | 2.0 |  |  | 12.7 |  |  | (0.2) |
Proceeds from the Sales or Paydowns of Investments: |  |  |  |  |  |
Equity Securities |  | 2.2 |  |  | 15.3 |  |  | 67.5 |
Purchases of Investments: |  |  |  |  |  |
Equity Securities |  | (21.0) |  |  | (48.9) |  |  | (2.3) |
Net Sales (Purchases) of Short-term Investments |  | (415.7) |  |  | (23.3) |  |  | 253.4 |
Acquisition of Business |  | — |  |  | — |  |  | (564.6) |
Net Cash Provided (Used In) by Investing Activities |  | (494.5) |  |  | (42.2) |  |  | (90.2) |
Financing Activities: |  |  |  |  |  |
Net Proceeds from Issuance of Long-term Debt |  | 395.6 |  |  | 49.9 |  |  | 249.4 |
Repayments of Long-term Debt |  | — |  |  | (185.0) |  |  | (215.0) |
Proceeds from Issuance of Common Stock, Net of Transaction Costs |  | — |  |  | 127.5 |  |  | — |
Proceeds from Shares Issued under Employee Stock Purchase Plan |  | 4.4 |  |  | 1.6 |  |  | — |
Common Stock Repurchases |  | (110.4) |  |  | — |  |  | — |
Dividends and Dividend Equivalents Paid |  | (78.9) |  |  | (67.8) |  |  | (56.4) |
Other |  | 5.4 |  |  | 2.4 |  |  | 0.9 |
Net Cash Provided (Used In) by Financing Activities |  | 216.1 |  |  | (71.4) |  |  | (21.1) |
Increase (Decrease) in Cash |  | (15.8) |  |  | 58.9 |  |  | (5.5) |
Cash, Beginning of Year |  | 61.8 |  |  | 2.9 |  |  | 8.4 |
Cash, End of Year |  | $ | 46.0 |  |  | $ | 61.8 |  |  | $ | 2.9 |
See Accompanying Report of Independent Registered Public Accounting Firm.
Lease, Cost | The following table presents operating lease ROU assets and lease liabilities.
DOLLARS IN MILLIONS |  | 2020 |  | 2019
Operating Lease Right-of-Use Assets |  | $ | 68.6 |  |  | $ | 75.6 |
Operating Lease Liabilities |  | 89.6 |  |  | 93.2 |
Lease expenses are primarily included in insurance expenses in the Consolidated Statements of Income. Additional information regarding the Company’s operating leases is presented below.
DOLLARS IN MILLIONS |  | 2020 |  | 2019
Lease Cost: |  |  |  |
Amortization of Right-of-Use Assets - Finance Leases |  | $ | 0.3 |  |  | $ | 0.7 |
Operating Lease Cost |  | 20.9 |  |  | 20.7 |
Short-Term Lease Cost (1) |  | 4.6 |  |  | 0.1 |
Total Expense |  | 25.8 |  |  | 21.5 |
Less: Sublease Income (2) |  | — |  |  | 0.1 |
Total Lease Cost |  | $ | 25.8 |  |  | $ | 21.4 |
(1) - Leases with an initial term of twelve months of less are not recorded on the balance sheet. (2) - Sublease income consists of rent from third parties of office space and is recognized as part of other income in the Consolidated Statements of Income. Supplemental cash flow information related to the Company’s operating leases for the year-ended December 31, 2020 is as follows:
DOLLARS IN MILLIONS |  | 2020 |  | 2019
Operating Cash Flows from Operating Leases (Fixed Payments) |  | $ | 15.8 |  |  | $ | 20.0 |
Operating Cash Flows from Operating Leases (Liability Reduction) |  | 17.5 |  |  | 17.6 |
Financing Cash Flows from Finance Leases |  | 0.3 |  |  | 0.7 |
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities |  | 11.0 |  |  | 25.9 |
Significant judgments and assumptions for determining lease asset and liability as December 31, 2020 and December 31, 2019 respectively are presented below.
|  | 2020 | 2019
Weighted-average Remaining Lease Term - Finance Leases |  | 0.7 years | 1.7 years
Weighted-average Remaining Lease Term - Operating Leases |  | 6.7 years | 7.0 years
Weighted-average Discount Rate - Finance Leases |  | 4.0 | % | 4.0 | %
Weighted-average Discount Rate - Operating Leases |  | 4.0 | % | 3.9 | %
The following table presents operating lease ROU assets and lease liabilities at December 31, 2020 and 2019.
DOLLARS IN MILLIONS |  | 2020 |  | 2019
Operating Lease Right-of-Use Assets |  | $ | 13.4 |  |  | $ | 18.6 |
Operating Lease Liabilities |  | 26.9 |  |  | 31.3 |
Supplemental cash flow information related to Kemper’s operating leases for the year-ended December 31, 2020 and December 31, 2019 respectively are presented below.
DOLLARS IN MILLIONS |  | 2020 |  | 2019
Operating Cash Flows from Operating Leases (Fixed Payments) |  | $ | (2.1) |  |  | $ | 1.2 |
Operating Cash Flows from Operating Leases (Liability Reduction) |  | 0.3 |  |  | 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, 2020 and December 31, 2019 respectively are presented below.
|  | 2020 |  | 2019
Weighted-average Remaining Lease Term - Operating Leases |  | 13.0 years |  | 13.0 years
Weighted-average Discount Rate - Operating Leases |  | 4.0 | % |  | 4.0 | %
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments under finance and operating leases at December 31, 2020 were:
DOLLARS IN MILLIONS |  | Finance Leases |  | Operating Leases
2021 |  | $ | 0.2 |  |  | $ | 20.8 |
2022 |  | — |  |  | 19.5 |
2023 |  | — |  |  | 17.8 |
2024 |  | — |  |  | 13.1 |
2025 |  | — |  |  | 8.4 |
2026 and Thereafter |  | — |  |  | 24.2 |
Total Future Payments |  | 0.2 |  |  | 103.8 |
Less Discount |  | — |  |  | 14.2 |
Present Value of Minimum Lease Payments |  | $ | 0.2 |  |  | $ | 89.6 |
Future minimum operating lease payments at December 31, 2020 were:
DOLLARS IN MILLIONS |  | Operating Leases
2021 |  | $ | 2.2 |
2022 |  | 2.4 |
2023 |  | 2.4 |
2024 |  | 2.5 |
2025 |  | 2.6 |
2026 and Thereafter |  | 22.9 |
Total Future Payments |  | 35.0
Less Discount |  | 8.1 |
Present Value of Minimum Lease Payments |  | $ | 26.9 |

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