XML 44 R18.htm IDEA: XBRL DOCUMENT
v3.23.1

Prior Period Consolidated Financial Statements | 3 Months Ended
--- | ---
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Prior Period Consolidated Financial Statements | Prior Period Consolidated Financial Statements Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (also known as LDTI). The Company adopted LDTI using the modified retrospective approach where permitted with changes applied as of January 1, 2021. As a result of adoption, the Company’s prior period consolidated financial statements have been restated. The following tables summarize the effects of adopting LDTI on our unaudited Consolidated Financial Statements. HORACE MANN EDUCATORS CORPORATION CONSOLIDATED BALANCE SHEET (UNAUDITED) ($ in millions, except share data)
|  | December 31, 2022 |  | Effect of the Adoption of ASU 2018-12 |  | Reclassifications(1) |  | December 31, 2022
|  | As Reported |  |  |  | As Adjusted
Assets |  |  |  |  |  |  |  |
Total investments |  | $ | 6,587.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,587.6 |
Cash |  | 42.8 |  |  | — |  |  | $ | — |  |  | 42.8 |
Deferred policy acquisition costs |  | 433.1 |  |  | (102.5) |  |  | $ | — |  |  | 330.6 |
Reinsurance balances receivable |  | 506.2 |  |  | (38.2) |  |  | — |  |  | 468.0 |
Deposit asset on reinsurance |  | 2,516.6 |  |  | — |  |  | — |  |  | 2,516.6 |
Intangible assets |  | 185.2 |  |  | — |  |  | — |  |  | 185.2 |
Goodwill |  | 54.3 |  |  | — |  |  | — |  |  | 54.3 |
Other assets |  | 328.7 |  |  | — |  |  | — |  |  | 328.7 |
Separate Account variable annuity assets |  | 2,792.3 |  |  | — |  |  | — |  |  | 2,792.3 |
Total assets |  | $ | 13,446.8 |  |  | $ | (140.7) |  |  | $ | — |  |  | $ | 13,306.1 |
Liabilities and Shareholders' Equity |  |  |  |  |  |  |  |
Policy liabilities |  |  |  |  |  |  |  |
Investment contract and policy reserves |  | $ | 6,968.0 |  |  | $ | (151.9) |  |  | $ | (6,816.1) |  |  | $ | — |
Future policy benefit reserves |  |  |  |  |  | 1,718.0 |  |  | 1,718.0 |
Policyholders' account balances |  |  |  |  |  | 5,260.6 |  |  | 5,260.6 |
Unpaid claims and claim expenses |  | 585.1 |  |  | (2.9) |  |  | (18.2) |  |  | 564.0 |
Unearned premiums |  | 264.2 |  |  | 1.9 |  |  | — |  |  | 266.1 |
Total policy liabilities |  | 7,817.3 |  |  | (152.9) |  |  | 144.3 |  |  | 7,808.7 |
Other policyholder funds |  | 954.0 |  |  | (0.4) |  |  | (144.3) |  |  | 809.3 |
Other liabilities |  | 297.0 |  |  | 2.5 |  |  | — |  |  | 299.5 |
Short-term debt |  | 249.0 |  |  | — |  |  | — |  |  | 249.0 |
Long-term debt |  | 249.0 |  |  | — |  |  | — |  |  | 249.0 |
Separate Account variable annuity liabilities |  | 2,792.3 |  |  | — |  |  | — |  |  | 2,792.3 |
Total liabilities |  | 12,358.6 |  |  | (150.8) |  |  | — |  |  | 12,207.8 |
Preferred stock |  | — |  |  | — |  |  | — |  |  | — |
Common stock |  | 0.1 |  |  | — |  |  | — |  |  | 0.1 |
Additional paid-in capital |  | 502.6 |  |  | — |  |  | — |  |  | 502.6 |
Retained earnings |  | 1,468.6 |  |  | 43.8 |  |  | — |  |  | 1,512.4 |
Accumulated other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |
Net unrealized investment losses on fixed maturity securities |  | (356.9) |  |  | (92.7) |  |  | — |  |  | (449.6) |
Net reserve remeasurements attributable to discount rates |  | — |  |  | 59.0 |  |  | — |  |  | 59.0 |
Net funded status of benefit plans |  | (8.8) |  |  | — |  |  | — |  |  | (8.8) |
Treasury stock, at cost |  | (517.4) |  |  | — |  |  | — |  |  | (517.4) |
Total shareholders’ equity |  | 1,088.2 |  |  | 10.1 |  |  | — |  |  | 1,098.3 |
Total liabilities and shareholders’ equity |  | $ | 13,446.8 |  |  | $ | (140.7) |  |  | $ | — |  |  | $ | 13,306.1 |
(1) The Company has reclassified the presentation of certain information to conform to the current year's presentation. HORACE MANN EDUCATORS CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) ($ in millions, except per share data)
|  | Three Months Ended |  | Effect of the Adoption of ASU 2018-12 |  | Three Months Ended
|  | March 31, 2022 |  |  | March 31, 2022
|  | As Reported |  |  | As Adjusted
Statement of Operations |  |  |  |  |  |
Revenues |  |  |  |  |  |
Net premiums and contract charges earned |  | $ | 255.9 |  |  | $ | (0.1) |  |  | $ | 255.8 |
Net investment income |  | 97.9 |  |  | — |  |  | 97.9 |
Net investment losses |  | (15.5) |  |  | — |  |  | (15.5) |
Other income |  | 8.5 |  |  | — |  |  | 8.5 |
Total revenues |  | 346.8 |  |  | (0.1) |  |  | 346.7 |
Benefits, losses and expenses |  |  |  |  |  |
Benefits, claims and settlement expenses |  | 177.0 |  |  | (1.8) |  |  | 175.2 |
Interest credited |  | 40.8 |  |  | (1.1) |  |  | 39.7 |
Operating expenses |  | 76.8 |  |  | (0.1) |  |  | 76.7 |
DAC amortization expense |  | 26.4 |  |  | (4.4) |  |  | 22.0 |
Intangible asset amortization expense |  | 4.2 |  |  | — |  |  | 4.2 |
Interest expense |  | 3.9 |  |  | — |  |  | 3.9 |
Total benefits, losses and expenses |  | 329.1 |  |  | (7.4) |  |  | 321.7 |
Income before income taxes |  | 17.7 |  |  | 7.3 |  |  | 25.0 |
Income tax expense |  | 3.2 |  |  | 1.5 |  |  | 4.7 |
Net income |  | 14.5 |  |  | 5.8 |  |  | 20.3 |
Net income per share |  |  |  |  |  |
Basic |  | 0.35 |  |  | 0.13 |  |  | 0.48 |
Diluted |  | 0.35 |  |  | 0.13 |  |  | 0.48 |
Weighted average number of shares and equivalent shares |  |  |  |  |  |
Basic |  | 41.9 |  |  | — |  |  | 41.9 |
Diluted |  | 42.1 |  |  | — |  |  | 42.1 |
Statement of Comprehensive Income (Loss) |  |  |  |  |  |
Net income |  | 14.5 |  |  | 5.8 |  |  | 20.3 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |
Change in net unrealized investment losses on fixed maturity securities |  | (270.7) |  |  | (63.4) |  |  | (334.1) |
Change in net reserve remeasurements attributable to discount rates |  | — |  |  | 181.5 |  |  | 181.5 |
Change in net funded status of benefit plans |  | — |  |  | — |  |  | — |
Other comprehensive loss |  | (270.7) |  |  | 118.1 |  |  | (152.6) |
Comprehensive income (loss) |  | $ | (256.2) |  |  | $ | 123.9 |  |  | $ | (132.3) |
HORACE MANN EDUCATORS CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) ($ in millions, except per share data)
|  |  |  | Three Months Ended |  | Effect of the Adoption of ASU 2018-12 |  | Three Months Ended
|  |  |  |  |  | March 31, 2022 |  |  | March 31, 2022
|  |  |  |  |  | As Reported |  |  | As Adjusted
Common stock, $0.001 par value |  |  |  |  |  |  |  |  |  |
Ending balance |  |  |  |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 0.1 |
Additional paid-in capital |  |  |  |  |  |  |  |  |  |
Ending balance |  |  |  |  |  | 496.6 |  |  | — |  |  | 496.6 |
Retained earnings |  |  |  |  |  |  |  |  |  |
Beginning balance |  |  |  |  |  | 1,524.9 |  |  | 22.1 |  |  | 1,547.0 |
Net income |  |  |  |  |  | 14.5 |  |  | 5.8 |  |  | 20.3 |
Effect of ASU 2018-12(1) |  |  |  |  |  | — |  |  | (0.8) |  |  | (0.8) |
Dividends,per share; 2022, $0.32 per share |  |  |  |  |  | (13.5) |  |  | — |  |  | (13.5) |
Ending balance |  |  |  |  |  | 1,525.9 |  |  | 27.1 |  |  | 1,553.0 |
Accumulated other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |
Beginning balance |  |  |  |  |  | 280.5 |  |  | (330.5) |  |  | (50.0) |
Change in net unrealized investment losses on fixed maturity securities |  |  |  |  |  | (270.7) |  |  | (63.4) |  |  | (334.1) |
Change in net reserve remeasurements attributable to discount rates |  |  |  |  |  | — |  |  | 181.5 |  |  | 181.5 |
Change in net funded status of benefit plans |  |  |  |  |  | — |  |  | — |  |  | — |
Ending balance |  |  |  |  |  | 9.8 |  |  | (212.4) |  |  | (202.6) |
Treasury stock, at cost |  |  |  |  |  |  |  |  |  |
Ending balance |  |  |  |  |  | (495.6) |  |  | — |  |  | (495.6) |
Shareholders' equity at end of period |  |  |  |  |  | $ | 1,536.8 |  |  | $ | (185.3) |  |  | $ | 1,351.5 |
(1) See Note 1 to the Consolidated Financial Statements for information regarding ASU 2018-12. HORACE MANN EDUCATORS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) ($ in millions)
|  | Three Months Ended |  | Effect of the Adoption of ASU 2018-12 |  | Three Months Ended
|  | March 31, 2022 |  |  | March 31, 2022
|  | As Reported |  |  | As Adjusted
Cash flows - operating activities |  |  |  |  |  |
Net income |  | $ | 14.5 |  |  | $ | 5.8 |  |  | $ | 20.3 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Net investment losses |  | 15.5 |  |  | — |  |  | 15.5 |
Depreciation and intangible asset amortization |  | 3.8 |  |  | — |  |  | 3.8 |
Share-based compensation expense |  | 2.1 |  |  | — |  |  | 2.1 |
Loss from EMA investments, net of dividends or distributions |  | 1.6 |  |  | — |  |  | 1.6 |
Changes in: |  |  |  |  |  |
Insurance liabilities |  | 450.5 |  |  | (82.8) |  |  | 367.7 |
Amounts due under reinsurance agreements |  | (357.7) |  |  | 24.7 |  |  | (333.0) |
Income tax liabilities |  | 3.4 |  |  | 51.1 |  |  | 54.5 |
Other operating assets and liabilities |  | (35.5) |  |  | (4.6) |  |  | (40.1) |
Other, net |  | (2.5) |  |  | 5.8 |  |  | 3.3 |
Net cash provided by operating activities |  | 95.7 |  |  | — |  |  | 95.7 |
Cash flows - investing activities |  |  |  |  |  |
Net cash used in investing activities |  | (217.7) |  |  | — |  |  | (217.7) |
Cash flows - financing activities |  |  |  |  |  |
Net cash provided by financing activities |  | 37.4 |  |  | — |  |  | 37.4 |
Net decrease in cash |  | (84.6) |  |  | — |  |  | (84.6) |
Cash at beginning of period |  | 133.7 |  |  | — |  |  | 133.7 |
Cash at end of period |  | $ | 49.1 |  |  | $ | — |  |  | $ | 49.1 |

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

X
- Definition The entire disclosure for classifying current financial statements, which may be different from classifications in the prior year's financial statements. Disclose any material changes in classification including an explanation of the reason for the change and the areas impacted. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205/tableOfContent + Details
Name: | us-gaap_Reclassifications
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration