Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

NOTE 3. DISCONTINUED OPERATIONS

The Company accounts for Kemper’s subsidiary, Fireside, and the Company’s former Unitrin Business Insurance operations as discontinued operations.

Summary financial information included in Income from Discontinued Operations for the years endedDecember 31, 2012, 2011 and 2010 is presented below:

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS	2012			2011			2010
Interest, Loan Fees and Earned Discounts	$	—		$	31.8		$	97.6
Other Automobile Finance Revenues	—			1.4			1.4
Gain on Sale of Loan Portfolios	12.9			4.5			—
Total Automobile Finance Revenues	12.9			37.7			99.0
Net Investment Income	—			0.5			1.9
Net Realized Gains on Sales of Investments	—			0.4			—
Total Revenues Included in Discontinued Operations	$	12.9		$	38.6		$	100.9
Income (Loss) from Discontinued Operations before Income Taxes:
Fireside:
Results of Operations	$	(0.2	)	$	18.7		$	24.6
Gain on Sale of Loan Portfolios	12.9			4.5			—
Unitrin Business Insurance:
Change in Estimate of Retained Liabilities Arising from Discontinued Operations	6.2			(3.7		)	1.2
Income from Discontinued Operations before Income Taxes	18.9			19.5			25.8
Income Tax Expense	(7.3		)	(6.7		)	(10.3		)
Income from Discontinued Operations	$	11.6		$	12.8		$	15.5
Income from Discontinued Operations Per Unrestricted Share:
Basic	$	0.20		$	0.21		$	0.25
Diluted	$	0.20		$	0.21		$	0.25

NOTE 3. DISCONTINUED OPERATIONS (Continued)

During the first four months of 2011, all of the Certificates of Deposits that were outstanding at December 31, 2010 either matured or were redeemed by Fireside in advance of their respective maturity dates. On March 31, 2012, Kemper’s subsidiary, Fireside, converted from an industrial bank to a general business corporation. Accordingly, Fireside is no longer regulated by the Federal Depository Insurance Corporation or the California Department of Financial Institutions.

During 2011, Fireside sold its active portfolio of automobile loan receivables at a gain of $4.5 million, net of transaction and other costs, while retaining its inactive portfolio of loans that had been previously charged-off (the “Inactive Portfolio”). The Inactive Portfolio was not carried on the Company’s Consolidated Balance Sheet. During 2012, Fireside sold $283 million of loans in the Inactive Portfolio at a gain of $12.9 million, net of transaction, shutdown and other costs of $13.3 million, of which $3.7 million was unpaid at December 31, 2012.

In 2008, the Company sold its Unitrin Business Insurance operations. The Company retained Property and Casualty Insurance Reserves for unpaid insured losses that occurred prior to the date of the sale. Property and Casualty Insurance Reserves reported in the Company’s Consolidated Balance Sheets include $99.2 million and $125.6 million at December 31, 2012 and 2011, respectively, for the retained liabilities. In accordance with GAAP, changes in the Company’s estimate of such retained liabilities after the sale are reported as a separate component of the results of discontinued operations. See Note 6, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements.