Schedule 2 - Parent Company Financial Statements (Tables)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

KEMPER CORPORATION

PARENT COMPANY BALANCE SHEETS

(Dollars in Millions)


	December 31,
	2023		20221
ASSETS
Investments in Subsidiaries	$	3,594.1	$	3,849.0
Fixed Maturities at Fair Value (Amortized Cost: 2023 – $177.4; 2022 - $122.5)	174.3		120.0
Equity Securities at Fair Value (Cost: 2023 - $11.6; 2022 - $39.3)	9.9		24.1


Short-term Investments	180.2		67.7
Other Investments	18.8		—
Cash	1.5		66.3
Other Receivables	38.5		5.6

Current Income Taxes	33.9		12.0
Right-of-Use Assets	7.7		12.2
Other Assets	32.5		35.6
Total Assets	$	4,091.4	$	4,192.5
LIABILITIES AND SHAREHOLDERS’ EQUITY
Senior Notes Payable, 4.350% due 2025 (Fair Value: 2023 – $440.8; 2022 – $438.5)	$	449.6	$	449.3
Senior Notes Payable, 2.400% due 2030 (Fair Value: 2023 – $313.6; 2022 – $310.3)	397.0		396.6
Senior Notes Payable, 3.800% due 2032 (Fair Value: 2023 - $338.4; 2022 - $336.2)	396.0		395.5
Fixed-Rate Reset Junior Subordinated Debentures, 5.875% due 2062 (Fair Value: 2023 - $120.6; 2022 - $110.1)	146.6		145.5
Current Income Tax Liability	—		—
Deferred Income Tax Liability	119.5		49.1
Liabilities for Benefit Plans	28.1		35.4
Right-of-Use Liabilities	23.3		24.4
Accrued Expenses and Other Liabilities	26.3		26.1
Total Liabilities	1,586.4		1,521.9
Shareholders’ Equity:
Common Stock	6.4		6.4
Additional Paid-in Capital	1,845.3		1,812.7
Retained Earnings	1,014.3		1,366.4
Accumulated Other Comprehensive Loss	(360.8)		(514.9)
Total Shareholders’ Equity attributable to Kemper Corporation	2,505.2		2,670.6
Noncontrolling Interest	(0.2)		$	—
Total Shareholders’ Equity	2,505.0		2,670.6
Total Liabilities and Shareholders’ Equity	$	4,091.4	$	4,192.5

1 As of January 1, 2023, the Company adopted ASU 2018-12 using the modified retrospective method applied as of the transition date of January 1, 2021. Prior period amounts in the financial statements have been recast to reflect application of the new guidance. See Note 2 to the Consolidated Financial Statements for additional information.

See Accompanying Report of Independent Registered Public Accounting Firm.

Parent Company Statements of Income

KEMPER CORPORATION

PARENT COMPANY STATEMENTS OF LOSS

(Dollars in Millions)


	For the Year Ended December 31,
	2023		20221		20211
Net Investment Income	$	8.6	$	16.6	$	3.4
(Loss) Income from Change in Fair Value of Equity Securities	(1.5)		(14.8)		10.0
Net Realized Investment (Losses) Gains	(11.9)		3.0		10.6
Impairment Losses	(0.4)		(0.2)		—
Other Income	—		1.1		—
Total Revenues	(5.2)		5.7		24.0
Interest Expense	56.7		52.6		32.0

Pension Settlement Expense	70.2		—		—
Other Operating Expenses	6.1		6.6		5.9
Total Operating Expenses	133.0		59.2		37.9
Loss before Income Taxes and Equity in Net Loss of Subsidiaries	(138.2)		(53.5)		(13.9)
Income Tax Benefit (Expense)	28.4		14.0		(0.6)
Loss before Equity in Net Loss of Subsidiaries	(109.8)		(39.5)		(14.5)
Equity in Net Loss of Subsidiaries	(162.5)		(247.1)		(109.2)
Net Loss	(272.3)		(286.6)		(123.7)
Less: Net Loss attributable to Noncontrolling Interest	(0.2)		—		—
Net Loss attributable to Kemper Corporation	$	(272.1)	$	(286.6)	$	(123.7)

See Accompanying Report of Independent Registered Public Accounting Firm.

Parent Company Statements of Comprehensive Income

KEMPER CORPORATION

PARENT COMPANY STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in Millions)


	For the Year Ended December 31,
	2023		20221		20211
Net Loss	$	(272.3)	$	(286.6)	$	(123.7)
Other Comprehensive Income:
Changes in Net Unrealized (Losses) Gains on Investment Securities:
Having No Credit Losses Recognized in Consolidated Statements of Loss:
Securities Held by Subsidiaries	235.0		(1,535.7)		(230.4)
Securities Held by Parent	(0.6)		(2.6)		—
Having Credit Losses Recognized in Consolidated Statements of Loss:
Securities Held by Subsidiaries	(0.5)		1.9		(2.0)
Reclassification Adjustment for Amounts Included in Net Loss:
Securities Held by Subsidiaries	4.5		(12.8)		(43.5)
Securities Held by Parent	(0.1)		—		(10.6)
Unrecognized Postretirement Benefit Costs Arising During the Year:
Subsidiaries	0.1		1.1		0.6
Parent	(7.4)		18.2		(9.5)
Reclassification Adjustment for Postretirement Benefit Costs Arising During the Year:
Subsidiaries	(0.3)		—		—
Parent	66.8		(0.4)		0.1





Gains on Cash Flow Hedge	(0.2)		5.9		0.5
Change in Discount Rate on Future Life Policyholder Benefits	(101.7)		1,380.7		228.5
Other Comprehensive Income (Loss) Before Income Taxes	195.6		(143.7)		(66.3)
Income Tax (Expense) Benefit:
Changes in Net Unrealized (Losses) Gains on Investment Securities:
Having No Credit Losses Recognized in Consolidated Statements of Loss:
Securities Held by Subsidiaries	(49.5)		322.7		48.4
Securities Held by Parent	0.1		0.5		—
Having Credit Losses Recognized in Consolidated Statements of Loss:
Securities Held by Subsidiaries	0.2		(0.4)		0.4

Reclassification Adjustment for Amounts Included in Net Loss:
Securities Held by Subsidiaries	(1.0)		2.7		9.1
Securities Held by Parent	0.1		—		2.2
Unrecognized Postretirement Benefit Costs Arising During the Year:
Subsidiaries	—		(0.2)		(0.1)
Parent	1.3		(3.9)		2.5
Reclassification Adjustments for Amounts Included in Net Loss:
Subsidiaries	0.2		—		—
Parent	(14.0)		0.1		—





Changes in Gain on Cash Flow Hedges	(0.1)		(1.2)		(0.1)
Change in Discount Rate on Future Life Policyholder Benefits	21.2		(289.9)		(47.9)
Income Tax (Expense) Benefit	(41.5)		30.4		14.5
Other Comprehensive Income (Loss)	154.1		(113.3)		(51.8)
Total Comprehensive Loss	(118.2)		(399.9)		(175.5)

Less: Total Comprehensive Loss attributable to Noncontrolling Interest	(0.2)		—		—
Total Comprehensive Loss attributable to Kemper Corporation	$	(118.0)	$	(399.9)	$	(175.5)

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,
	2023		20221		20211
Operating Activities:
Net Loss	$	(272.3)	$	(286.6)	$	(123.7)
Adjustment Required to Reconcile Net (Loss) Income to Net Cash (Used in) Provided by Operations:
Equity in Net Loss (Income) of Subsidiaries	162.5		247.1		109.2
Cash Dividends from Subsidiaries	320.8		25.3		170.3

Net Realized Investment Losses (Gains)	11.9		(3.0)		(10.6)
Settlement Costs Related to Defined Benefit Pension Plan	70.2		—		—

Impairment Losses	0.4		0.2		—

Income (Loss) from Change in Fair Value of Equity and Convertible Securities	1.5		14.8		(10.0)
Other, Net	(30.6)		(48.9)		(35.3)
Net Cash Provided by (Used in) Operating Activities	264.4		(51.1)		99.9
Investing Activities:
Capital Contributed to Subsidiaries	(181.5)		(537.8)		(36.5)


Proceeds from Sales, Calls and Maturities of Fixed Maturities	50.8		0.1		181.3
Proceeds from the Sales or Paydowns of Investments:
Equity Securities	14.8		71.9		28.5
Purchases of Investments:
Fixed Maturities	—		(40.3)		—
Equity Securities	(2.1)		(5.6)		(48.7)
Net Purchases of Short-term Investments	(112.2)		138.9		411.3
Acquisition of Business	—		—		(370.9)
Other	(23.2)		(3.1)		—
Net Cash (Used in) Provided by Investing Activities	(253.4)		(375.9)		165.0
Financing Activities:
Notes Payable Proceeds:
Proceeds from Issuance of 3.800% Senior Notes due February 23, 2032	—		396.3		—
Issuance Fees from Issuance of 3.800% Senior Notes due February 23, 2032	—		(1.2)		—
Proceeds from Issuance of 5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062	—		145.6		—
Issuance Fees from Issuance of 5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062	—		(0.9)		—
Proceeds from Issuance of 2.400% Senior Notes due September 30, 2030	—		—		—
Issuance Fees from Issuance of 2.400% Senior Notes due September 30, 2030	—		—		—


Repayments of Long-term Debt	—		—		(50.0)

Proceeds from Shares Issued under Employee Stock Purchase Plan	4.3		4.9		5.4
Common Stock Repurchases	—		—		(161.7)
Dividends and Dividend Equivalents Paid	(79.6)		(79.7)		(80.6)
Other	(0.5)		0.6		3.7

Net Cash (Used in) Provided by Financing Activities	(75.8)		465.6		(283.2)
Net (decrease) increase in cash	(64.8)		38.6		(18.3)
Cash, Beginning of Year	66.3		27.7		46.0
Cash, End of Year	$	1.5	$	66.3	$	27.7

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)	Dec 31, 2023		Dec 31, 2022
Operating Lease Right-of-Use Assets	$	38.4	$	45.1
Operating Lease Liabilities	62.3		72.6

Lease expenses are primarily included in insurance expenses in the Consolidated Statements of Loss. Additional information regarding the Company’s operating leases for the year ended December 31, 2023 and 2022 is presented below.


(Dollars in Millions)	2023		2022
Lease Cost:

Operating Lease Cost	15.7		21.3
Variable Lease Cost	3.2		0.3
Short-Term Lease Cost1	0.3		3.8
Total Lease Expense	$	19.2	$	25.4
Less: Short-Term Lease Cost	—		0.1
Total Lease Cost	$	19.2	$	25.3

1 Leases with an initial term of twelve months or less are not recorded on the Consolidated Balance Sheets.


	2023		2022

Weighted-average Remaining Lease Term - Operating Leases	5.5 years		5.6 years

Weighted-average Discount Rate - Operating Leases	4.3	%	3.6	%


DOLLARS IN MILLIONS	2023		2022
Operating Lease Right-of-Use Assets	$	7.7	$	12.2
Operating Lease Liabilities	23.3		24.4

Supplemental cash flow information related to Kemper’s operating leases for the year-ended December 31, 2023 and December 31, 2022 respectively are presented follows.


DOLLARS IN MILLIONS	2023		2022
Operating Cash Flows from Operating Leases (Fixed Payments)	$	5.8	$	2.4
Operating Cash Flows from Operating Leases (Liability Reduction)	4.8		1.4
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities	—		—

KEMPER CORPORATION

FINANCIAL INFORMATION OF KEMPER CORPORATION

NOTES TO FINANCIAL INFORMATION

(Dollars in Millions)

NOTE 4. LEASES (Continued)

Significant judgments and assumptions for determining lease asset and liability as December 31, 2023 and December 31, 2022 respectively are presented below.


DOLLARS IN MILLIONS	2023		2022
Weighted-average Remaining Lease Term - Operating Leases	10.0 years		11.0 years
Weighted-average Discount Rate - Operating Leases	4.1	%	4.0	%

Schedule of Future Minimum Lease Payments for Operating Leases

Future minimum lease payments under operating leases at December 31, 2023 are presented below.


(Dollars in Millions)
2024	$	20.4
2025	15.5
2026	9.4
2027	7.2
2028	4.4
2029 and Thereafter	15.2
Total Future Payments	$	72.1
Less: Discount	9.8
Present Value of Minimum Lease Payments	$	62.3

Future minimum operating lease payments at December 31, 2023 were:


DOLLARS IN MILLIONS	Operating Leases
2024	$	2.9
2025	2.6
2026	2.6
2027	2.7
2028	2.8
2028 and Thereafter	14.8
Total Future Payments	$	28.4
Less Discount	5.1
Present Value of Minimum Lease Payments	$	23.3