Prior Period Consolidated Financial Statements (Tables)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

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