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Schedule 2 - Parent Company Financial Statements (Tables) | 12 Months Ended
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Dec. 31, 2021
Condensed Financial Information Disclosure [Abstract] |
Parent Company Balance Sheets | KEMPER CORPORATION PARENT COMPANY BALANCE SHEETS (Dollars in Millions)
|  | December 31,
|  | 2021 |  | 2020
ASSETS |  |  |  |
Investments in Subsidiaries |  | $ | 4,729.1 |  |  | $ | 4,896.0 |
Fixed Maturities at Fair Value (Amortized Cost: 2021 – $0.3; 2020 - $91.8) |  | 0.4 |  |  | 99.8 |
Equity Securities at Fair Value (Cost: 2021 - $106.8; 2020 - $73.4) |  | 107.4 |  |  | 78.8 |
Short-term Investments |  | 96.9 |  |  | 508.2 |
Cash |  | 27.7 |  |  | 46.0 |
Other Receivables |  | 2.3 |  |  | 1.1 |
Right-of-Use Assets |  | 12.8 |  |  | 13.4 |
Other Assets |  | 18.9 |  |  | 29.2 |
Total Assets |  | $ | 4,995.5 |  |  | $ | 5,672.5 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |
Term Loan due July 5, 2023 (Fair Value: 2021 – $—; 2020 – $50.0) |  | $ | — |  |  | $ | 49.9 |
Senior Notes Payable, 4.35% due 2025 (Fair Value: 2021 – $481.4; 2020 – $499.5) |  | 449.0 |  |  | 448.8 |
Senior Notes Payable, 2.40% due 2030 (Fair Value: 2021 – $387.8, 2020 – $405.6) |  | 396.2 |  |  | 395.8 |
Current Income Tax Liability |  | 18.5 |  |  | 41.5 |
Deferred Income Tax Liability |  | 46.5 |  |  | 38.9 |
Liabilities for Benefit Plans |  | 42.3 |  |  | 47.6 |
Right-of-Use Liabilities |  | 25.8 |  |  | 26.9 |
Accrued Expenses and Other Liabilities |  | 9.5 |  |  | 59.7 |
Total Liabilities |  | 987.8 |  |  | 1,109.1 |
Shareholders’ Equity: |  |  |  |
Common Stock |  | 6.4 |  |  | 6.5 |
Additional Paid-in Capital |  | 1,790.7 |  |  | 1,805.2 |
Retained Earnings |  | 1,762.5 |  |  | 2,071.2 |
Accumulated Other Comprehensive Income |  | 448.1 |  |  | 680.5 |
Total Shareholders’ Equity |  | 4,007.7 |  |  | 4,563.4 |
Total Liabilities and Shareholders’ Equity |  | $ | 4,995.5 |  |  | $ | 5,672.5 |
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,
|  | 2021 |  | 2020 |  | 2019
Net Investment Income |  | $ | 3.4 |  |  | $ | 1.4 |  |  | $ | 2.1 |
Income from Change in Fair Value of Equity Securities |  | 10.0 |  |  | 4.3 |  |  | 1.6 |
Net Realized Gains (Losses) on Sales of Investments |  | 10.6 |  |  | 0.1 |  |  | 0.3 |
Total Revenues |  | 24.0 |  |  | 5.8 |  |  | 4.0 |
Interest Expense |  | 32.0 |  |  | 24.2 |  |  | 28.5 |
Loss from Early Extinguishment of Debt |  | — |  |  | — |  |  | 5.8 |
Pension Settlement Expense |  | — |  |  | 64.1 |  |  | — |
Other Operating (Benefits) Expenses |  | 5.9 |  |  | (3.6) |  |  | 4.0 |
Total Operating Expenses |  | 37.9 |  |  | 84.7 |  |  | 38.3 |
Loss before Income Taxes and Equity in Net Income of Subsidiaries |  | (13.9) |  |  | (78.9) |  |  | (34.3) |
Income Tax Benefit (Expense) |  | (0.6) |  |  | 13.4 |  |  | 9.4 |
Loss before Equity in Net Income (Loss) of Subsidiaries |  | (14.5) |  |  | (65.5) |  |  | (24.9) |
Equity in Net Income (Loss) of Subsidiaries |  | (106.0) |  |  | 475.4 |  |  | 556.0 |
Net Income (Loss) |  | $ | (120.5) |  |  | $ | 409.9 |  |  | $ | 531.1 |
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,
|  | 2021 |  | 2020 |  | 2019
Net Income (Loss) |  | $ | (120.5) |  |  | $ | 409.9 |  |  | $ | 531.1 |
Other Comprehensive Income (Loss): |  |  |  |  |  |
Changes in Net Unrealized Gains (Losses) on Investment Securities: |  |  |  |  |  |
Having No Credit Losses Recognized in Consolidated Statements of Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | (230.4) |  |  | 378.7 |  |  | 433.2 |
Securities Held by Parent |  | — |  |  | 8.0 |  |  | 0.2 |
Having Credit Losses Recognized in Consolidated Statements of Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | (2.0) |  |  | (2.6) |  |  | — |
Reclassification Adjustment for Amounts Included in Net Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | (43.5) |  |  | (16.6) |  |  | (27.9) |
Securities Held by Parent |  | (10.6) |  |  | (0.1) |  |  | (0.2) |
Unrecognized Postretirement Benefit Costs Arising During the Year: |  |  |  |  |  |
Securities Held by Subsidiaries |  | 0.6 |  |  | — |  |  | (0.6) |
Securities Held by Parent |  | (9.5) |  |  | 3.6 |  |  | (4.2) |
Reclassification Adjustments for Amounts Included in Net Income (Loss): |  |  |  |  |  |
Pension Settlement Cost Recognized |  | — |  |  | 64.1 |  |  | — |
Amortization of Unrecognized Postretirement Benefits (Costs) |  | 0.1 |  |  | 2.5 |  |  | (3.0) |
Gains (Losses) on Cash Flow Hedge |  | 0.5 |  |  | 0.4 |  |  | 0.4 |
Other Comprehensive Income (Loss) before Income Taxes |  | (294.8) |  |  | 438.0 |  |  | 397.9 |
Income Tax Benefit (Expense): |  |  |  |  |  |
Changes in Net Unrealized Gains (Losses) on Investment Securities: |  |  |  |  |  |
Having No Credit Losses Recognized in Consolidated Statements of Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | 48.4 |  |  | (80.6) |  |  | (91.0) |
Securities Held by Parent |  | — |  |  | (1.7) |  |  | — |
Having Credit Losses Recognized in Consolidated Statements of Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | 0.4 |  |  | 0.5 |  |  | — |
Reclassification Adjustment for Amounts Included in Net Income (Loss): |  |  |  |  |  |
Securities Held by Subsidiaries |  | 9.1 |  |  | 3.5 |  |  | 5.8 |
Securities Held by Parent |  | 2.2 |  |  | — |  |  | — |
Unrecognized Postretirement Benefit Costs Arising During the Year: |  |  |  |  |  |
Securities Held by Subsidiaries |  | (0.1) |  |  | — |  |  | — |
Securities Held by Parent |  | 2.5 |  |  | (1.3) |  |  | 1.0 |
Reclassification Adjustments for Amounts Included in Net Income (Loss): |  |  |  |  |  |
Pension Settlement Cost Recognized |  | — |  |  | (13.5) |  |  | — |
Amortization of Unrecognized Postretirement Benefit Costs |  | — |  |  | (0.5) |  |  | 0.7 |
Changes in Gain (Loss) on Cash Flow Hedges |  | (0.1) |  |  | — |  |  | (0.1) |
Income Tax Benefit (Expense) |  | 62.4 |  |  | (93.6) |  |  | (83.6) |
Other Comprehensive Income (Loss) |  | (232.4) |  |  | 344.4 |  |  | 314.3 |
Total Comprehensive Income (Loss) |  | $ | (352.9) |  |  | $ | 754.3 |  |  | $ | 845.4 |
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,
|  | 2021 |  | 2020 |  | 2019
Operating Activities: |  |  |  |  |  |
Net Income (Loss) |  | $ | (120.5) |  |  | $ | 409.9 |  |  | $ | 531.1 |
Adjustment Required to Reconcile Net Income (Loss) to Net Cash Provided by Operations: |  |  |  |  |  |
Equity in Net Income (Loss) of Subsidiaries |  | 106.0 |  |  | (475.4) |  |  | (556.0) |
Cash Dividends from Subsidiaries |  | 170.3 |  |  | 216.2 |  |  | 239.0 |
Net Realized Investment (Gains) Losses |  | (10.6) |  |  | (0.1) |  |  | (0.3) |
Settlement Costs Related to Defined Benefit Pension Plan |  | — |  |  | 64.1 |  |  | — |
Contribution to Defined Benefit Pension Plan |  | — |  |  | — |  |  | (55.3) |
Loss from Early Extinguishment of Debt |  | — |  |  | — |  |  | 5.8 |
Decrease (Increase) in Value of Equity and Convertible Securities at Fair Value |  | (10.0) |  |  | (4.3) |  |  | (1.6) |
Other, Net |  | (35.3) |  |  | 52.2 |  |  | 9.8 |
Net Cash Provided by Operating Activities |  | 99.9 |  |  | 262.6 |  |  | 172.5 |
Investing Activities: |  |  |  |  |  |
Capital Contributed to Subsidiaries |  | (36.5) |  |  | (62.0) |  |  | (83.0) |
Capital Distribution from Subsidiaries |  | — |  |  | — |  |  | 85.0 |
Proceeds from Sales, Calls and Maturities of Fixed Maturities |  | 181.3 |  |  | 2.0 |  |  | 12.7 |
Proceeds from the Sales or Paydowns of Investments: |  |  |  |  |  |
Equity Securities |  | 28.5 |  |  | 2.2 |  |  | 15.3 |
Purchases of Investments: |  |  |  |  |  |
Equity Securities |  | (48.7) |  |  | (21.0) |  |  | (48.9) |
Net Sales (Purchases) of Short-term Investments |  | 411.3 |  |  | (415.7) |  |  | (23.3) |
Acquisition of Business |  | (370.9) |  |  | — |  |  | — |
Net Cash Provided (Used) by Investing Activities |  | 165.0 |  |  | (494.5) |  |  | (42.2) |
Financing Activities: |  |  |  |  |  |
Net Proceeds from Issuance of Long-term Debt |  | — |  |  | 395.6 |  |  | 49.9 |
Repayments of Long-term Debt |  | (50.0) |  |  | — |  |  | (185.0) |
Proceeds from Issuance of Common Stock, Net of Transaction Costs |  | — |  |  | — |  |  | 127.5 |
Proceeds from Shares Issued under Employee Stock Purchase Plan |  | 5.4 |  |  | 4.4 |  |  | 1.6 |
Common Stock Repurchases |  | (161.7) |  |  | (110.4) |  |  | — |
Dividends and Dividend Equivalents Paid |  | (80.6) |  |  | (78.9) |  |  | (67.8) |
Other |  | 3.7 |  |  | 5.4 |  |  | 2.4 |
Net Cash Provided (Used) by Financing Activities |  | (283.2) |  |  | 216.1 |  |  | (71.4) |
Increase (Decrease) in Cash |  | (18.3) |  |  | (15.8) |  |  | 58.9 |
Cash, Beginning of Year |  | 46.0 |  |  | 61.8 |  |  | 2.9 |
Cash, End of Year |  | $ | 27.7 |  |  | $ | 46.0 |  |  | $ | 61.8 |
See Accompanying Report of Independent Registered Public Accounting Firm.
Lease, Cost | The following table presents operating lease right-of-use assets and lease liabilities.
(Dollars in Millions) |  | 2021 |  | 2020
Operating Lease Right-of-Use Assets |  | $ | 64.4 |  |  | $ | 68.6 |
Operating Lease Liabilities |  | 84.8 |  |  | 89.6 |
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) |  | 2021 |  | 2020
Lease Cost: |  |  |  |
Amortization of Right-of-Use Assets - Finance Leases |  | $ | 0.2 |  |  | $ | 0.3 |
Operating Lease Cost |  | 22.3 |  |  | 20.9 |
Variable Lease Cost |  | 0.2 |  |  | — |
Short-Term Lease Cost (1) |  | 5.0 |  |  | 4.6 |
Total Lease Expense |  | $ | 27.7 |  |  | $ | 25.8 |
Less: Sub-Lease Income |  | 0.3 |  |  | — |
Total Lease Cost |  | $ | 27.4 |  |  | $ | 25.8 |
(1) - Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheet.
DOLLARS IN MILLIONS |  | 2021 |  | 2020
Operating Lease Right-of-Use Assets |  | $ | 12.8 |  |  | $ | 13.4 |
Operating Lease Liabilities |  | 25.8 |  |  | 26.9 |
Supplemental cash flow information related to Kemper’s operating leases for the year-ended December 31, 2021 and December 31, 2020 respectively are presented follows.
DOLLARS IN MILLIONS |  | 2021 |  | 2020
Operating Cash Flows from Operating Leases (Fixed Payments) |  | $ | 2.2 |  |  | $ | (2.1) |
Operating Cash Flows from Operating Leases (Liability Reduction) |  | 1.1 |  |  | 0.3 |
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities |  | — |  |  | — |
Significant judgments and assumptions for determining lease asset and liability as December 31, 2021 and December 31, 2020 respectively are presented below.
DOLLARS IN MILLIONS |  | 2021 |  | 2020
Weighted-average Remaining Lease Term - Operating Leases |  | 11.9 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 operating lease payments at December 31, 2021 were:
DOLLARS IN MILLIONS |  | Operating Leases
2022 |  | $ | 2.4 |
2023 |  | 2.4 |
2024 |  | 2.5 |
2025 |  | 2.6 |
2026 |  | 2.6 |
2027 and Thereafter |  | 20.4 |
Total Future Payments |  | $ | 32.9 |
Less Discount |  | 7.1 |
Present Value of Minimum Lease Payments |  | $ | 25.8 |

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