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Schedule 2 - Parent Company Financial Statements
 12 Months Ended
Dec. 31, 2016
Parent Company Financial Statements [Abstract]  
Parent Company Financial Statements
SCHEDULE II
KEMPER CORPORATION
PARENT COMPANY BALANCE SHEETS
(Dollars in Millions)
 
 
 
December 31,
 
 
2016
 
2015
ASSETS
 
 
 
 
Investments in Subsidiaries
 
$
2,575.5

 
$
2,586.6

Fixed Maturities at Fair Value (Amortized Cost: 2016 – $46.3; 2015 – $15.1)
 
46.3

 
15.1

Equity Securities at Fair Value (Cost: 2016 – $5.2; 2015 – $11.1)
 
5.3

 
10.9

Fair Value Option Investments
 
111.4

 
164.5

Short-term Investments
 
120.0

 
134.8

Cash
 
15.7

 
15.9

Other Receivables
 
3.4

 
5.7

Current Income Taxes
 
2.4

 
—

Other Assets
 
7.5

 
6.1

Total Assets
 
$
2,887.5

 
$
2,939.6

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Senior Notes Payable, 6.00% due 2017 (Fair Value: 2016 – $365.3; 2015 – $374.0)
 
$
359.8

 
$
359.1

Senior Notes Payable, 4.35% due 2025 (Fair Value: 2016 - $248.5; 2015 – $248.3)
 
247.7

 
247.4

Subordinated Debentures due 2054 (Fair Value: 2016 – $157.1; 2015 – $159.0)
 
144.1

 
144.1

Current Income Tax Liability
 
—

 
11.3

Deferred Income Tax Liability
 
34.0

 
22.0

Liabilities for Benefit Plans
 
118.7

 
154.8

Accrued Expenses and Other Liabilities
 
8.0

 
8.5

Total Liabilities
 
912.3

 
947.2

Shareholders’ Equity:
 
 
 
 
Common Stock
 
5.1

 
5.1

Additional Paid-in Capital
 
660.3

 
654.0

Retained Earnings
 
1,172.8

 
1,209.0

Accumulated Other Comprehensive Income
 
137.0

 
124.3

Total Shareholders’ Equity
 
1,975.2

 
1,992.4

Total Liabilities and Shareholders’ Equity
 
$
2,887.5

 
$
2,939.6

See Accompanying Report of Independent Registered Public Accounting Firm.
 



KEMPER CORPORATION
PARENT COMPANY STATEMENTS OF INCOME
(Dollars in Millions)
 
 
 
For The Years Ended December 31,
 
 
2016
 
2015
 
2014
Net Investment Income
 
$
2.0

 
$
1.7

 
$
0.9

Net Realized Gains (Losses) on Sales of Investments
 
0.1

 
(0.1
)
 
(0.2
)
Net Impairment Losses Recognized in Earnings
 
—

 
(1.6
)
 
(1.7
)
Total Revenues
 
2.1

 
—

 
(1.0
)
Interest Expense
 
45.2

 
47.3

 
47.9

Loss from Early Extinguishment of Debt
 
—

 
9.1

 
—

Other Operating (Benefits) Expenses
 
(6.1
)
 
17.6

 
2.7

Total Operating Expenses
 
39.1

 
74.0

 
50.6

Loss before Income Taxes and Equity in Net Income of Subsidiaries
 
(37.0
)
 
(74.0
)
 
(51.6
)
Income Tax Benefit
 
13.4

 
26.5

 
18.9

Loss before Equity in Net Income of Subsidiaries
 
(23.6
)
 
(47.5
)
 
(32.7
)
Equity in Net Income of Subsidiaries
 
40.4

 
133.2

 
147.2

Net Income
 
$
16.8

 
$
85.7

 
$
114.5

See Accompanying Report of Independent Registered Public Accounting Firm.


KEMPER CORPORATION
PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Millions)
 
 
 
For The Years Ended December 31,
 
 
2016
 
2015
 
2014
Net Income
 
$
16.8

 
$
85.7

 
$
114.5

Other Comprehensive Income (Loss):
 
 
 
 
 
 
Unrealized Holding Gains (Losses) Arising During the Year:
 
 
 
 
 
 
Securities Held by Subsidiaries
 
(2.6
)
 
(150.4
)
 
261.7

Securities Held by Parent
 
0.2

 
(1.5
)
 
(2.0
)
Reclassification Adjustment for Amounts Included in Net Income:
 
 
 
 
 
 
Securities Held by Subsidiaries
 
0.2

 
(26.9
)
 
(26.8
)
Securities Held by Parent
 
—

 
1.5

 
1.7

Unrealized Holding Gains (Losses)
 
(2.2
)
 
(177.3
)
 
234.6

Unrecognized Postretirement Benefit Costs Arising During the Year
 
14.2

 
3.0

 
(106.4
)
Reclassification Adjustments for Amounts Included in Net Income:
 
 
 
 
 
 
Curtailment Cost Recognized
 
1.0

 
—

 
—

Amortization of Unrecognized Postretirement Benefit Costs
 
5.3

 
23.1

 
7.9

Total Reclassification Adjustments for Amounts Included in Net Income
 
6.3

 
23.1

 
7.9

Net Unrecognized Postretirement Benefit Costs
 
20.5

 
26.1

 
(98.5
)
Foreign Currency Translation Adjustments on Investments Held by Subsidiaries
 
(0.3
)
 
(1.4
)
 
(1.0
)
Gain on Cash Flow Hedge
 
1.6

 
—

 
—

Other Comprehensive Income (Loss) before Income Taxes
 
19.6

 
(152.6
)
 
135.1

Income Tax Benefit (Expense):
 
 
 
 
 
 
Unrealized Holding Gains and Losses Arising During the Year:
 
 
 
 
 
 
Securities Held by Subsidiaries
 
1.1

 
53.4

 
(92.3
)
Securities Held by Parent
 
(0.1
)
 
0.5

 
0.7

Reclassification Adjustment for Amounts Included in Net Income:
 
 
 
 
 
 
Securities Held by Subsidiaries
 
(0.1
)
 
9.4

 
9.4

Securities Held by Parent
 
—

 
(0.5
)
 
(0.6
)
Unrealized Holding Gains and Losses
 
0.9

 
62.8

 
(82.8
)
Unrecognized Postretirement Benefit Costs Arising During the Year
 
(5.0
)
 
(1.1
)
 
37.5

Reclassification Adjustments for Amounts Included in Net Income:
 
 
 
 
 
 
Curtailment Cost Recognized
 
(0.4
)
 
—

 
—

Amortization of Unrecognized Postretirement Benefit Costs
 
(1.9
)
 
(8.0
)
 
(2.8
)
Total Reclassification Adjustments for Amounts Included in Net Income
 
(2.3
)
 
(8.0
)
 
(2.8
)
Net Unrecognized Postretirement Benefit Costs
 
(7.3
)
 
(9.1
)
 
34.7

Foreign Currency Translation Adjustments on Investments Held by Subsidiaries
 
0.1

 
0.5

 
0.4

Gain on Cash Flow Hedge
 
(0.6
)
 
—

 
—

Income Tax Benefit (Expense)
 
(6.9
)
 
54.2

 
(47.7
)
Other Comprehensive Income (Loss)
 
12.7

 
(98.4
)
 
87.4

Total Comprehensive Income (Loss)
 
$
29.5

 
$
(12.7
)
 
$
201.9

See Accompanying Report of Independent Registered Public Accounting Firm.
 


KEMPER CORPORATION
PARENT COMPANY STATEMENTS OF CASH FLOWS
(Dollars in Millions)
 
 
 
For The Years Ended December 31,
 
 
2016
 
2015
 
2014
Operating Activities:
 
 
 
 
 
 
Net Income
 
$
16.8

 
$
85.7

 
$
114.5

Adjustment Required to Reconcile Net Income to Net Cash Provided by Operations:
 
 
 
 
 
 
Equity in Net Income of Subsidiaries
 
(40.4
)
 
(133.2
)
 
(147.2
)
Cash Dividends from Subsidiaries
 
77.7

 
285.0

 
159.1

Cash Received for Benefit Plan from Subsidiary
 
1.4

 
—

 
—

Cash Contribution to Defined Benefit Plan
 
(9.0
)
 
—

 
—

Net Realized (Gains) Losses on Sales of Investments
 
(0.1
)
 
0.1

 
0.2

Net Impairment Losses Recognized in Earnings
 
—

 
1.6

 
1.7

Loss from Early Extinguishment of Debt
 
—

 
9.1

 
—

Other, Net
 
(9.3
)
 
41.6

 
10.5

Net Cash Provided by Operating Activities
 
37.1

 
289.9

 
138.8

Investing Activities:
 
 
 
 
 
 
Capital Contributed to Subsidiary
 
(52.9
)
 
(105.0
)
 
—

Capital Distribution from Subsidiary
 
—

 
—

 
1.1

Sales, Paydowns and Maturities of Fixed Maturities
 
73.5

 
11.8

 
11.5

Purchases of Fixed Maturities
 
(77.9
)
 
(14.8
)
 
—

Sales of Equity Securities
 
3.5

 
9.4

 
15.1

Sales of Fair Value Option Investments
 
72.2

 
—

 
6.9

Purchases of Fair Value Option Investments
 
(21.0
)
 
(111.0
)
 
(60.9
)
Acquisition of Business
 
—

 
(71.0
)
 
—

Change in Short-term Investments
 
14.8

 
90.3

 
(94.3
)
Net Cash Provided (Used) by Investing Activities
 
12.2

 
(190.3
)
 
(120.6
)
Financing Activities:
 
 
 
 
 
 
Net Proceeds from Issuance of Debt
 
—

 
247.3

 
144.0

Repayments of Debt
 
—

 
(258.8
)
 
—

Cash Dividends Paid
 
(49.2
)
 
(49.7
)
 
(51.8
)
Common Stock Repurchases
 
(3.8
)
 
(45.0
)
 
(114.0
)
Cash Exercise of Stock Options
 
3.5

 
3.9

 
0.5

Excess Tax Benefits on Share Based Awards
 
—

 
0.7

 
0.2

Net Cash Used by Financing Activities
 
(49.5
)
 
(101.6
)
 
(21.1
)
Decrease in Cash
 
(0.2
)
 
(2.0
)
 
(2.9
)
Cash, Beginning of Year
 
15.9

 
17.9

 
20.8

Cash, End of Year
 
$
15.7

 
$
15.9

 
$
17.9

See Accompanying Report of Independent Registered Public Accounting Firm.