Schedule II Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule II Condensed Financial Information of Registrant

SCHEDULE II

HORACE MANN EDUCATORS CORPORATION

(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

BALANCE SHEETS

As of December 31, 2017 and 2016

($ in thousands, except per share data)

	December 31,
	2017			2016
ASSETS
Investments and cash	$	6,464		$	4,069
Investment in subsidiaries	1,685,390			1,487,457
Other assets	66,445			60,057
Total assets	$	1,758,299		$	1,551,583
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt	$	247,469		$	247,209
Other liabilities	9,257			10,392
Total liabilities	256,726			257,601
Preferred stock, $0.001 par value, authorized 1,000,000 shares; none issued	—			—
Common stock, $0.001 par value, authorized 75,000,000 shares; issued, 2017, 65,439,245; 2016, 64,917,683	65			65
Additional paid-in capital	464,246			453,479
Retained earnings	1,231,177			1,155,732
Accumulated other comprehensive income (loss), net of taxes:
Net unrealized investment gains on fixed maturity and equity securities	300,177			175,738
Net funded status of pension benefit obligations	(13,217		)	(11,817		)
Treasury stock, at cost, 2017, 24,721,372 shares; 2016, 24,672,932 shares	(480,875		)	(479,215		)
Total shareholders' equity	1,501,573			1,293,982
Total liabilities and shareholders' equity	$	1,758,299		$	1,551,583

See accompanying Note to Condensed Financial Statements.

SCHEDULE II

HORACE MANN EDUCATORS CORPORATION

(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF OPERATIONS

($ in thousands)

	Years Ended December 31,
	2017			2016			2015
Revenues
Net investment income	$	34		$	20		$	33
Realized investment gains	—			—			—
Total revenues	34			20			33
Expenses
Interest expense	11,835			11,808			13,122
Debt retirement costs	—			—			2,338
Other	5,101			5,631			5,153
Total expenses	16,936			17,439			20,613
Loss before income tax benefit and equity in net earnings of subsidiaries	(16,902		)	(17,419		)	(20,580		)
Income tax benefit	(6,667		)	(6,076		)	(7,202		)
Loss before equity in net earnings of subsidiaries	(10,235		)	(11,343		)	(13,378		)
Equity in net earnings of subsidiaries	179,694			95,108			106,860
Net income	$	169,459		$	83,765		$	93,482

See accompanying Note to Condensed Financial Statements.

SCHEDULE II

HORACE MANN EDUCATORS CORPORATION

(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF CASH FLOWS

($ in thousands)

	Years Ended December 31,
	2017			2016			2015
Cash flows - operating activities
Interest expense paid	$	(11,503	)	$	(11,754	)	$	(13,521	)
Income taxes recovered (paid)	(373		)	8,914			8,413
Cash dividends received from subsidiaries	56,900			59,600			50,000
Other, net, including settlement of payables to subsidiaries	4,201			581			(3,426		)
Net cash provided by operating activities	49,225			57,341			41,466
Cash flows - investing activities
Net increase (decrease) in investments	(2,338		)	9,161			15,402
Net cash provided by (used in) investing activities	(2,338		)	9,161			15,402
Cash flows - financing activities
Dividends paid to shareholders	(46,114		)	(44,310		)	(42,523		)
Proceeds from issuance of Senior Notes due 2025	—			—			246,937
Redemption of Senior Notes due 2016	—			—			(127,292		)
Maturity of Senior Notes due 2015	—			—			(75,000		)
Principal repayment on Bank Credit Facility	—			—			(38,000		)
Acquisition of treasury stock	(1,660		)	(21,513		)	(21,950		)
Exercise of stock options	4,190			3,329			1,629
Withholding tax payments on RSUs tendered	(3,245		)	(4,015		)	(671		)
Net cash used in financing activities	(46,829		)	(66,509		)	(56,870		)
				.
Net increase (decrease) in cash	58			(7		)	(2		)
Cash at beginning of period	68			75			77
Cash at end of period	$	126		$	68		$	75

See accompanying Note to Condensed Financial Statements.

SCHEDULE II

HORACE MANN EDUCATORS CORPORATION

(Parent Company Only)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTE TO CONDENSED FINANCIAL STATEMENTS

The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto.