EX-99.2 3 a6698010ex99_2.htm EXHIBIT 99.2 a6698010ex99_2.htm
Exhibit 99.2
 
 

 
 
Unum Group
Statistical Supplement First Quarter 2011
   
TABLE OF CONTENTS
   
(dollars in millions, except share data and where noted)
Interim Results are Unaudited
   
 
Page
   
Financial Highlights
1
Consolidated Statements of Income
2
Sales Data
3
Consolidated Balance Sheets
4
Financial Results by Segment
5
Quarterly Historical Financial Results by Segment
6
Financial Results and Selected Statistics by Segment
 
Unum US
7
Unum UK
8
Colonial Life
9
Individual Disability - Closed Block
10
Corporate and Other
11
Reserves
12
Investment Fact Sheets
13
Statutory-Basis Financial Information
14
Notes to Statistical Supplement
15
   
Throughout this supplement, segment operating results exclude income taxes and realized investment gains and losses.
   
   
See "Notes to Statistical Supplement" on page 15 for a discussion of non-GAAP financial measures and significant transactions and events.
 
 

 
 
Unum Group Financial Highlights
 
                               
   
Three Months Ended
    Year Ended  
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Financial Results
                             
                               
Premium Income
  $ 1,869.5     $ 1,863.2     $ 7,431.4     $ 7,475.5     $ 7,783.3  
                                         
Segment Operating Revenue
  $ 2,547.9     $ 2,536.0     $ 10,168.5     $ 10,079.3     $ 10,448.2  
Net Realized Investment Gain (Loss)
    15.2       25.6       24.7       11.7       (465.9 )
                                         
Revenue
  $ 2,563.1     $ 2,561.6     $ 10,193.2     $ 10,091.0     $ 9,982.3  
                                         
Net Income
  $ 225.4     $ 229.8     $ 886.1     $ 852.6     $ 553.2  
                                         
Assets
  $ 57,116.8     $ 54,997.2     $ 57,307.7     $ 54,477.0     $ 49,417.4  
                                         
Stockholders' Equity
  $ 8,983.8     $ 8,780.2     $ 8,944.4     $ 8,500.1     $ 6,397.9  
                                         
2010
                                       
 Full year 2010 results include a non-cash tax charge of $10.2 million to reflect the impact of a tax law change.
 
 
1

 
 
Unum Group Financial Highlights
 
                               
   
Three Months Ended
    Year Ended  
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Per Common Share Information
                             
                               
Net Income
                             
Assuming Dilution
  $ 0.72     $ 0.69     $ 2.71     $ 2.57     $ 1.62  
Basic
  $ 0.72     $ 0.69     $ 2.72     $ 2.57     $ 1.62  
                                         
Dividends Paid
  $ 0.0925     $ 0.0825     $ 0.350     $ 0.315     $ 0.300  
                                         
Book Value per Share:
                                       
As Reported
  $ 29.08     $ 26.38     $ 28.25     $ 25.62     $ 19.32  
                                         
Excluding Net Unrealized Gain (Loss) on Securities
                                       
and Net Gain on Cash Flow Hedges
  $ 26.50     $ 23.81     $ 25.82     $ 23.36     $ 20.45  
                                         
Excluding Foreign Currency Translation Adjustment
  $ 26.78     $ 24.23     $ 26.17     $ 23.60     $ 20.99  
                                         
Excluding Unrecognized Pension and Postretirement
                                       
Benefit Costs
  $ 27.79     $ 25.17     $ 27.17     $ 24.59     $ 22.22  
                                         
Price (UNM closing price on last trading day of period)
  $ 26.25     $ 24.77     $ 24.22     $ 19.52     $ 18.60  
                                         
See page 4 of this statistical supplement for detail on the components of AOCI excluded from Total Stockholders' Equity in computing the book value per share measures listed above.
 
   
Total Stockholders' Equity, Net Unrealized Gain on Securities, Net Gain on Cash Flow Hedges, Foreign Currency Translation Adjustment, and Unrecognized Pension and Postretirement Benefit Costs at March 31, 2010 are $8,780.2 million, $499.2 million, $356.8 million, $(141.0) million, and $(312.1) million, respectively.
 
   
Total Stockholders' Equity, Net Unrealized Loss on Securities, Net Gain on Cash Flow Hedges, Foreign Currency Translation Adjustment, and Unrecognized Pension and Postretirement Benefit Costs at December 31, 2008 are $6,397.9 million, $(832.6) million, $458.5 million, $(177.6) million, and $(406.5) million, respectively.
 
 
1.1

 
 
Unum Group Consolidated Statements of Income
 
 
           
   
Three Months Ended
    Year Ended  
 
 
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Revenue
                             
Premium Income
  $ 1,869.5     $ 1,863.2     $ 7,431.4     $ 7,475.5     $ 7,783.3  
Net Investment Income
    618.7       613.0       2,495.5       2,346.6       2,389.0  
Net Realized Investment Gain (Loss)
    15.2       25.6       24.7       11.7       (465.9 )
Other Income
    59.7       59.8       241.6       257.2       275.9  
Total Revenue
    2,563.1       2,561.6       10,193.2       10,091.0       9,982.3  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    1,593.0       1,568.9       6,354.1       6,291.6       6,626.4  
Commissions
    224.3       218.3       855.4       837.1       853.3  
Interest and Debt Expense - Non-recourse Debt
    3.0       3.1       12.9       18.6       39.3  
Interest and Debt Expense - All Other Debt
    34.9       30.3       128.9       106.8       117.4  
Deferral of Acquisition Costs
    (158.3 )     (154.9 )     (607.7 )     (593.6 )     (590.9 )
Amortization of Deferred Acquisition Costs
    138.3       141.2       547.1       526.2       519.1  
Other Expenses
    397.7       393.5       1,571.2       1,612.0       1,593.7  
Total Benefits and Expenses
    2,232.9       2,200.4       8,861.9       8,798.7       9,158.3  
                                         
Income from Continuing Operations Before
                                       
Income Taxes
    330.2       361.2       1,331.3       1,292.3       824.0  
                                         
Income Taxes
    104.8       131.4       445.2       439.7       270.8  
                                         
Net Income
  $ 225.4     $ 229.8     $ 886.1     $ 852.6     $ 553.2  
                                         
Average Number of Shares Outstanding
                                       
Basic
    312,742,274       332,270,218       325,839,020       331,266,247       341,022,792  
Dilutive Securities:
                                       
Options and Other Nonvested Stock Awards
    1,590,043       1,254,490       1,382,036       869,934       537,505  
Assuming Dilution
    314,332,317       333,524,708       327,221,056       332,136,181       341,560,297  
                                         
Actual Number of Shares Outstanding
    308,966,237       332,775,452       316,573,452       331,809,247       331,120,345  
 
2

 
 
Unum Group Sales Data
                                     
   
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
                                     
Unum US Segment
                                   
Fully Insured Products
  $ 180.0     $ 163.7       10.0 %   $ 669.4     $ 709.2     $ 701.5  
Administrative Services
                                               
Only (ASO) Products
    1.4       0.6       133.3       6.3       7.7       7.2  
Total Unum US Segment
    181.4       164.3       10.4       675.7       716.9       708.7  
                                                 
Unum UK Segment
    17.6       24.2       (27.3 )     119.2       123.2       99.5  
                                                 
Colonial Life Segment
    70.6       73.3       (3.7 )     358.8       343.8       340.2  
                                                 
Individual Disability -
                                               
Closed Block Segment
    0.1       0.2       (50.0 )     0.8       1.5       2.4  
                                                 
Total Sales
  $ 269.7     $ 262.0       2.9     $ 1,154.5     $ 1,185.4     $ 1,150.8  
 
3

 
 
Unum Group Sales Data for Unum US Segment
 
                                     
   
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Sales by Product
                                   
                                     
Fully Insured Products
                                   
Group Disability, Group Life, and AD&D
                                   
Group Long-term Disability
  $ 29.5     $ 27.6       6.9 %   $ 148.2     $ 182.1     $ 190.3  
Group Short-term Disability
    14.0       14.3       (2.1 )     80.3       83.9       71.5  
Group Life
    30.8       28.5       8.1       166.9       184.9       165.4  
AD&D
    2.5       3.5       (28.6 )     18.1       18.7       17.2  
Subtotal
    76.8       73.9       3.9       413.5       469.6       444.4  
Supplemental and Voluntary
                                               
Individual Disability - Recently Issued
    14.2       9.6       47.9       42.7       51.6       57.9  
Group Long-term Care
    7.0       5.4       29.6       25.8       22.4       32.2  
Individual Long-term Care
    -       -       -       0.2       3.7       8.4  
Voluntary Benefits
    82.0       74.8       9.6       187.2       161.9       158.6  
Subtotal
    103.2       89.8       14.9       255.9       239.6       257.1  
                                                 
Total Fully Insured Products
    180.0       163.7       10.0       669.4       709.2       701.5  
                                                 
ASO Products
    1.4       0.6       133.3       6.3       7.7       7.2  
                                                 
Total Sales
  $ 181.4     $ 164.3       10.4     $ 675.7     $ 716.9     $ 708.7  
                                                 
Sales by Market Sector
                                               
                                                 
Group Disability, Group Life, and AD&D
                                               
Core Market (< 2,000 lives)
  $ 52.4     $ 53.1       (1.3 )%   $ 294.0     $ 320.6     $ 297.2  
Large Case Market
    24.4       20.8       17.3       119.5       149.0       147.2  
Subtotal
    76.8       73.9       3.9       413.5       469.6       444.4  
                                                 
Supplemental and Voluntary
    103.2       89.8       14.9       255.9       239.6       257.1  
                                                 
Total Fully Insured Products
    180.0       163.7       10.0       669.4       709.2       701.5  
                                                 
ASO Products
    1.4       0.6       133.3       6.3       7.7       7.2  
                                                 
Total Sales
  $ 181.4     $ 164.3       10.4     $ 675.7     $ 716.9     $ 708.7  
 
3.1

 
 
Unum Group Sales Data for Unum UK Segment
 
                                     
   
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
                                     
Group Long-term Disability
  $ 8.2     $ 11.7       (29.9 )%   $ 53.1     $ 56.8     $ 68.8  
Group Life
    6.8       10.9       (37.6 )     57.3       53.8       19.6  
Supplemental and Voluntary
    2.6       1.6       62.5       8.8       12.6       11.1  
                                                 
Total Sales
  $ 17.6     $ 24.2       (27.3 )   $ 119.2     $ 123.2     $ 99.5  
                                                 
(in millions of pounds)
                                               
                                                 
Group Long-term Disability
  £ 5.1     £ 7.5       (32.0 )%   £ 34.4     £ 36.5     £ 37.6  
Group Life
    4.3       6.9       (37.7 )     37.1       33.4       10.9  
Supplemental and Voluntary
    1.6       1.0       60.0       5.7       8.0       6.0  
                                                 
Total Sales
  £ 11.0     £ 15.4       (28.6 )   £ 77.2     £ 77.9     £ 54.5  
 
Unum Group Sales Data for Colonial Life Segment
 
                                     
   
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
                                     
Accident, Sickness, and Disability
  $ 47.2     $ 48.7       (3.1 )%   $ 237.4     $ 221.1     $ 222.1  
Life
    13.3       14.3       (7.0 )     65.7       68.3       64.0  
Cancer and Critical Illness
    10.1       10.3       (1.9 )     55.7       54.4       54.1  
                                                 
Total Sales
  $ 70.6     $ 73.3       (3.7 )   $ 358.8     $ 343.8     $ 340.2  
 
3.2

 
 
Unum Group Consolidated Balance Sheets
 
                   
   
March 31,
   
December 31,
 
   
2011
   
2010
   
2009
 
Assets
                 
Investments
                 
Fixed Maturity Securities
  $ 40,315.1     $ 40,035.6     $ 37,914.4  
Mortgage Loans
    1,556.7       1,516.8       1,404.0  
Policy Loans
    2,977.6       2,996.1       2,878.0  
Other Long-term Investments
    540.1       529.3       233.5  
Short-term Investments
    600.9       1,163.1       865.5  
Total Investments
    45,990.4       46,240.9       43,295.4  
                         
Cash and Bank Deposits
    56.6       53.6       71.6  
Accounts and Premiums Receivable
    1,673.8       1,665.8       1,732.4  
Reinsurance Recoverable
    4,787.6       4,827.9       4,996.9  
Accrued Investment Income
    730.7       669.8       642.5  
Deferred Acquisition Costs
    2,542.9       2,521.1       2,482.5  
Goodwill
    201.5       201.2       201.6  
Property and Equipment
    482.7       476.8       443.5  
Other Assets
    650.6       650.6       610.6  
                         
Total Assets
  $ 57,116.8     $ 57,307.7     $ 54,477.0  
                         
Liabilities
                       
Policy and Contract Benefits
  $ 1,528.7     $ 1,565.0     $ 1,736.9  
Reserves for Future Policy and Contract Benefits
    39,685.2       39,715.0       37,740.8  
Unearned Premiums
    474.4       436.7       452.0  
Other Policyholders' Funds
    1,674.6       1,669.7       1,662.3  
Income Tax Payable
    181.4       135.7       114.5  
Deferred Income Tax
    471.2       417.2       273.2  
Short-term Debt
    -       225.1       -  
Long-term Debt - Non-recourse
    692.7       716.9       785.2  
Long-term Debt - All Other
    1,912.3       1,914.4       1,764.4  
Other Liabilities
    1,512.5       1,567.6       1,447.6  
                         
Total Liabilities
    48,133.0       48,363.3       45,976.9  
                         
Stockholders' Equity
                       
Common Stock
    35.8       36.5       36.4  
Additional Paid-in Capital
    2,572.4       2,615.4       2,587.4  
Accumulated Other Comprehensive Income (Loss)
                       
Net Unrealized Gain on Securities
    443.6       410.4       379.6  
Net Gain on Cash Flow Hedges
    351.1       361.0       370.8  
Foreign Currency Translation Adjustment
    (84.1 )     (110.9 )     (78.7 )
Unrecognized Pension and Postretirement Benefit Costs
    (313.5 )     (318.6 )     (330.7 )
Retained Earnings
    7,112.3       7,060.8       6,289.5  
Treasury Stock
    (1,133.8 )     (1,110.2 )     (754.2 )
                         
Total Stockholders' Equity
    8,983.8       8,944.4       8,500.1  
                         
Total Liabilities and Stockholders' Equity
  $ 57,116.8     $ 57,307.7     $ 54,477.0  
 
4

 
 
Unum Group Deferred Acquisition Costs by Segment
 
                         
   
Unum US
   
Unum UK
   
Colonial Life
   
Consolidated
 
                         
Balances at December 31, 2008
  $ 1,661.8     $ 54.7     $ 755.9     $ 2,472.4  
Capitalized
    335.5       29.1       229.0       593.6  
Amortized
    (317.2 )     (30.5 )     (178.5 )     (526.2 )
Adjustment Related to Unrealized Investment Gains/Losses
    (17.7 )     -       (45.2 )     (62.9 )
Foreign Currency
    -       5.6       -       5.6  
Balances at December 31, 2009
    1,662.4       58.9       761.2       2,482.5  
Capitalized
    333.0       28.3       246.4       607.7  
Amortized
    (332.9 )     (27.0 )     (187.2 )     (547.1 )
Adjustment Related to Unrealized Investment Gains/Losses
    (4.6 )     -       (15.4 )     (20.0 )
Foreign Currency
    -       (2.0 )     -       (2.0 )
Balances at December 31, 2010
    1,657.9       58.2       805.0       2,521.1  
Capitalized
    88.1       6.7       63.5       158.3  
Amortized
    (83.3 )     (7.2 )     (47.8 )     (138.3 )
Adjustment Related to Unrealized Investment Gains/Losses
    0.2       -       -       0.2  
Foreign Currency
    -       1.6       -       1.6  
Balances at March 31, 2011
  $ 1,662.9     $ 59.3     $ 820.7     $ 2,542.9  
 
4.1

 
 
Unum Group Balance Sheets by Segment - March 31, 2011
 
                                                       
   
Unum US
                               
         
Group Life
                                           
         
and Accidental
   
Supplemental
                     
Individual
             
   
Group
   
Death &
   
and
   
Total
         
Colonial
   
Disability -
   
Corporate
       
   
Disability
   
Dismemberment
   
Voluntary
   
Unum US
   
Unum UK
   
Life
   
Closed Block
   
and Other
   
Consolidated
 
Assets
                                                     
Investments
  $ 9,892.5     $ 2,379.8     $ 9,807.3     $ 22,079.6     $ 3,149.5     $ 2,072.2     $ 12,369.6     $ 6,319.5     $ 45,990.4  
Deferred Acquisition Costs
    119.1       96.1       1,447.7       1,662.9       59.3       820.7       -       -       2,542.9  
Goodwill
    2.5       -       187.5       190.0       11.5       -       -       -       201.5  
All Other
    742.3       147.3       192.4       1,082.0       261.9       230.0       3,043.3       3,764.8       8,382.0  
Total Assets
  $ 10,756.4     $ 2,623.2     $ 11,634.9     $ 25,014.5     $ 3,482.2     $ 3,122.9     $ 15,412.9     $ 10,084.3     $ 57,116.8  
                                                                         
Liabilities
                                                                       
Reserves and Policyholder Benefits
  $ 8,732.9     $ 1,640.2     $ 8,383.9     $ 18,757.0     $ 2,455.6     $ 1,690.5     $ 13,113.9     $ 7,345.9     $ 43,362.9  
Debt
    80.0       -       -       80.0       -       -       612.7       1,912.3       2,605.0  
All Other
    309.6       66.8       459.7       836.1       131.2       261.2       185.5       751.1       2,165.1  
Total Liabilities
    9,122.5       1,707.0       8,843.6       19,673.1       2,586.8       1,951.7       13,912.1       10,009.3       48,133.0  
                                                                         
Other Allocated Stockholders' Equity
    1,548.1       883.7       2,681.7       5,113.5       764.5       1,097.4       1,323.0       (109.3 )     8,189.1  
Net Unrealized Gain/Loss on Securities and
                                                                       
Net Gain on Cash Flow Hedges
    85.8       32.5       109.6       227.9       130.9       73.8       177.8       184.3       794.7  
Total Allocated Stockholders' Equity
    1,633.9       916.2       2,791.3       5,341.4       895.4       1,171.2       1,500.8       75.0       8,983.8  
Total Liabilities and Allocated
                                                                       
Stockholders' Equity
  $ 10,756.4     $ 2,623.2     $ 11,634.9     $ 25,014.5     $ 3,482.2     $ 3,122.9     $ 15,412.9     $ 10,084.3     $ 57,116.8  
                                                                         
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements.
 
 
4.2

 
 
Unum Group Balance Sheets by Segment - December 31, 2010
 
                                                       
   
Unum US
                               
         
Group Life
                                           
         
and Accidental
   
Supplemental
                     
Individual
             
   
Group
   
Death &
   
and
   
Total
         
Colonial
   
Disability -
   
Corporate
       
   
Disability
   
Dismemberment
   
Voluntary
   
Unum US
   
Unum UK
   
Life
   
Closed Block
   
and Other
   
Consolidated
 
Assets
                                                     
Investments
  $ 9,965.9     $ 2,326.0     $ 9,694.1     $ 21,986.0     $ 3,042.0     $ 2,007.8     $ 12,470.0     $ 6,735.1     $ 46,240.9  
Deferred Acquisition Costs
    119.0       93.8       1,445.1       1,657.9       58.2       805.0       -       -       2,521.1  
Goodwill
    2.5       -       187.5       190.0       11.2       -       -       -       201.2  
All Other
    718.9       186.2       137.9       1,043.0       274.9       234.5       3,039.1       3,753.0       8,344.5  
Total Assets
  $ 10,806.3     $ 2,606.0     $ 11,464.6     $ 24,876.9     $ 3,386.3     $ 3,047.3     $ 15,509.1     $ 10,488.1     $ 57,307.7  
                                                                         
Liabilities
                                                                       
Reserves and Policyholder Benefits
  $ 8,793.9     $ 1,647.9     $ 8,326.6     $ 18,768.4     $ 2,391.2     $ 1,660.8     $ 13,168.5     $ 7,397.5     $ 43,386.4  
Debt
    82.5       -       -       82.5       -       -       634.4       2,139.5       2,856.4  
All Other
    302.9       53.5       451.2       807.6       109.4       242.1       200.3       761.1       2,120.5  
Total Liabilities
    9,179.3       1,701.4       8,777.8       19,658.5       2,500.6       1,902.9       14,003.2       10,298.1       48,363.3  
                                                                         
Other Allocated Stockholders' Equity
    1,535.8       867.0       2,624.2       5,027.0       757.7       1,071.0       1,310.2       7.1       8,173.0  
Net Unrealized Gain/Loss on Securities and
                                                                       
Net Gain on Cash Flow Hedges
    91.2       37.6       62.6       191.4       128.0       73.4       195.7       182.9       771.4  
Total Allocated Stockholders' Equity
    1,627.0       904.6       2,686.8       5,218.4       885.7       1,144.4       1,505.9       190.0       8,944.4  
Total Liabilities and Allocated
                                                                       
Stockholders' Equity
  $ 10,806.3     $ 2,606.0     $ 11,464.6     $ 24,876.9     $ 3,386.3     $ 3,047.3     $ 15,509.1     $ 10,488.1     $ 57,307.7  
                                                                         
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements.
 
 
4.3

 
 
Unum Group Financial Results by Segment
 
                                     
   
Three Months Ended
   
Year Ended
 
 
 
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
% Change
 
Premium Income
             
 
               
 
 
Unum US
  $ 1,219.4     $ 1,216.1       0.3 %   $ 4,854.6     $ 4,873.1       (0.4 )%
Unum UK
    167.1       165.8       0.8       650.6       686.1       (5.2 )
Colonial Life
    280.4       265.1       5.8       1,075.7       1,015.1       6.0  
Individual Disability - Closed Block
    202.3       214.0       (5.5 )     847.0       898.5       (5.7 )
Corporate and Other
    0.3       2.2       (86.4 )     3.5       2.7       29.6  
      1,869.5       1,863.2       0.3       7,431.4       7,475.5       (0.6 )
Net Investment Income
                                               
Unum US
    321.6       304.6       5.6       1,263.8       1,200.5       5.3  
Unum UK
    44.9       39.8       12.8       170.5       124.5       36.9  
Colonial Life
    31.3       29.9       4.7       122.5       114.3       7.2  
Individual Disability - Closed Block
    182.0       190.7       (4.6 )     746.4       740.6       0.8  
Corporate and Other
    38.9       48.0       (19.0 )     192.3       166.7       15.4  
      618.7       613.0       0.9       2,495.5       2,346.6       6.3  
Other Income
                                               
Unum US
    31.0       30.5       1.6       123.3       118.7       3.9  
Unum UK
    0.1       0.5       (80.0 )     1.2       2.4       (50.0 )
Colonial Life
    0.1       0.2       (50.0 )     0.7       0.5       40.0  
Individual Disability - Closed Block
    22.6       21.5       5.1       90.7       100.8       (10.0 )
Corporate and Other
    5.9       7.1       (16.9 )     25.7       34.8       (26.1 )
      59.7       59.8       (0.2 )     241.6       257.2       (6.1 )
Total Operating Revenue
                                               
Unum US
    1,572.0       1,551.2       1.3       6,241.7       6,192.3       0.8  
Unum UK
    212.1       206.1       2.9       822.3       813.0       1.1  
Colonial Life
    311.8       295.2       5.6       1,198.9       1,129.9       6.1  
Individual Disability - Closed Block
    406.9       426.2       (4.5 )     1,684.1       1,739.9       (3.2 )
Corporate and Other
    45.1       57.3       (21.3 )     221.5       204.2       8.5  
      2,547.9       2,536.0       0.5       10,168.5       10,079.3       0.9  
 
5

 
 
Unum Group Financial Results by Segment
 
                                     
   
Three Months Ended
   
Year Ended
 
 
 
3/31/2011
   
3/31/2010
   
% Change
   
12/31/2010
   
12/31/2009
   
% Change
 
Benefits and Expenses
                                   
Unum US
  $ 1,362.9     $ 1,352.0       0.8 %   $ 5,415.7     $ 5,417.3       - %
Unum UK
    163.4       145.5       12.3       613.5       563.4       8.9  
Colonial Life
    242.8       222.2       9.3       916.7       849.0       8.0  
Individual Disability - Closed Block
    397.0       414.5       (4.2 )     1,639.9       1,705.6       (3.9 )
Corporate and Other
    66.8       66.2       0.9       276.1       263.4       4.8  
      2,232.9       2,200.4       1.5       8,861.9       8,798.7       0.7  
Income (Loss) Before Income Taxes and
                                               
Net Realized Investment Gain (Loss)
                                               
Unum US
    209.1       199.2       5.0       826.0       775.0       6.6  
Unum UK
    48.7       60.6       (19.6 )     208.8       249.6       (16.3 )
Colonial Life
    69.0       73.0       (5.5 )     282.2       280.9       0.5  
Individual Disability - Closed Block
    9.9       11.7       (15.4 )     44.2       34.3       28.9  
Corporate and Other
    (21.7 )     (8.9 )     (143.8 )     (54.6 )     (59.2 )     7.8  
      315.0       335.6       (6.1 )     1,306.6       1,280.6       2.0  
Income Taxes
    99.3       122.3       (18.8 )     436.2       428.2       1.9  
                                                 
Income Before Net Realized Investment Gain (Loss)
    215.7       213.3       1.1       870.4       852.4       2.1  
                                                 
Net Realized Investment Gain (Loss)
    15.2       25.6       40.6       24.7       11.7       111.1  
                                                 
Tax Expense (Benefit) on Net Realized Investment
                                               
Gain (Loss)
    5.5       9.1       (39.6 )     9.0       11.5       (21.7 )
                                                 
Net Income
  $ 225.4     $ 229.8       (1.9 )   $ 886.1     $ 852.6       3.9  
 
5.1

 
 
Unum Group Quarterly Historical Financial Results by Segment
 
                                                       
 
 
3/31/11
   
12/31/10
   
9/30/10
   
6/30/10
   
3/31/10
   
12/31/09
   
9/30/09
   
6/30/09
   
3/31/09
 
Premium Income
                                                     
Unum US
  $ 1,219.4     $ 1,211.4     $ 1,210.6     $ 1,216.5     $ 1,216.1     $ 1,207.9     $ 1,215.2     $ 1,223.7     $ 1,226.3  
Unum UK
    167.1       170.5       161.4       152.9       165.8       180.0       169.7       173.4       163.0  
Colonial Life
    280.4       273.6       269.3       267.7       265.1       257.4       253.5       250.8       253.4  
Individual Disability - Closed Block
    202.3       212.0       208.5       212.5       214.0       219.4       221.5       228.0       229.6  
Corporate and Other
    0.3       0.7       0.4       0.2       2.2       1.0       1.2       -       0.5  
      1,869.5       1,868.2       1,850.2       1,849.8       1,863.2       1,865.7       1,861.1       1,875.9       1,872.8  
Net Investment Income
                                                                       
Unum US
    321.6       327.6       312.9       318.7       304.6       302.3       302.8       304.1       291.3  
Unum UK
    44.9       48.6       39.0       43.1       39.8       40.8       22.5       34.3       26.9  
Colonial Life
    31.3       31.4       31.9       29.3       29.9       28.9       29.4       28.4       27.6  
Individual Disability - Closed Block
    182.0       182.9       185.5       187.3       190.7       182.4       184.4       187.4       186.4  
Corporate and Other
    38.9       43.8       49.1       51.4       48.0       41.3       40.5       43.4       41.5  
      618.7       634.3       618.4       629.8       613.0       595.7       579.6       597.6       573.7  
Other Income
                                                                       
Unum US
    31.0       32.7       29.7       30.4       30.5       28.3       28.8       30.0       31.6  
Unum UK
    0.1       0.1       0.2       0.4       0.5       0.6       0.6       0.6       0.6  
Colonial Life
    0.1       0.2       0.2       0.1       0.2       0.1       0.1       0.2       0.1  
Individual Disability - Closed Block
    22.6       23.4       22.7       23.1       21.5       23.8       24.3       25.8       26.9  
Corporate and Other
    5.9       6.7       5.4       6.5       7.1       8.3       8.1       10.6       7.8  
      59.7       63.1       58.2       60.5       59.8       61.1       61.9       67.2       67.0  
Total Operating Revenue
                                                                       
Unum US
    1,572.0       1,571.7       1,553.2       1,565.6       1,551.2       1,538.5       1,546.8       1,557.8       1,549.2  
Unum UK
    212.1       219.2       200.6       196.4       206.1       221.4       192.8       208.3       190.5  
Colonial Life
    311.8       305.2       301.4       297.1       295.2       286.4       283.0       279.4       281.1  
Individual Disability - Closed Block
    406.9       418.3       416.7       422.9       426.2       425.6       430.2       441.2       442.9  
Corporate and Other
    45.1       51.2       54.9       58.1       57.3       50.6       49.8       54.0       49.8  
      2,547.9       2,565.6       2,526.8       2,540.1       2,536.0       2,522.5       2,502.6       2,540.7       2,513.5  
 
6

 
 
Unum Group Quarterly Historical Financial Results by Segment
 
                                                       
 
 
3/31/11
   
12/31/10
   
9/30/10
   
6/30/10
   
3/31/10
   
12/31/09
   
9/30/09
   
6/30/09
   
3/31/09
 
Benefits and Expenses
                                                     
Unum US
  $ 1,362.9     $ 1,365.6     $ 1,348.5     $ 1,349.6     $ 1,352.0     $ 1,335.5     $ 1,349.7     $ 1,366.5     $ 1,365.6  
Unum UK
    163.4       171.1       153.4       143.5       145.5       160.1       134.1       141.0       128.2  
Colonial Life
    242.8       244.4       226.9       223.2       222.2       218.1       212.6       208.1       210.2  
Individual Disability - Closed Block
    397.0       408.0       406.9       410.5       414.5       419.8       423.0       431.2       431.6  
Corporate and Other
    66.8       68.5       65.7       75.7       66.2       67.2       63.5       70.0       62.7  
      2,232.9       2,257.6       2,201.4       2,202.5       2,200.4       2,200.7       2,182.9       2,216.8       2,198.3  
Income (Loss) Before Income Taxes and
                                                                       
Net Realized Investment Gain (Loss)
                                                                       
Unum US
    209.1       206.1       204.7       216.0       199.2       203.0       197.1       191.3       183.6  
Unum UK
    48.7       48.1       47.2       52.9       60.6       61.3       58.7       67.3       62.3  
Colonial Life
    69.0       60.8       74.5       73.9       73.0       68.3       70.4       71.3       70.9  
Individual Disability - Closed Block
    9.9       10.3       9.8       12.4       11.7       5.8       7.2       10.0       11.3  
Corporate and Other
    (21.7 )     (17.3 )     (10.8 )     (17.6 )     (8.9 )     (16.6 )     (13.7 )     (16.0 )     (12.9 )
      315.0       308.0       325.4       337.6       335.6       321.8       319.7       323.9       315.2  
Income Taxes
    99.3       99.4       105.5       109.0       122.3       103.5       108.1       108.1       108.5  
                                                                         
Income Before Net Realized
                                                                       
Investment Gain (Loss)
    215.7       208.6       219.9       228.6       213.3       218.3       211.6       215.8       206.7  
                                                                         
Net Realized Investment Gain (Loss)
    15.2       27.5       1.1       (29.5 )     25.6       (25.9 )     14.9       87.3       (64.6 )
                                                                         
Tax Expense (Benefit) on Net Realized
                                                                       
Investment Gain (Loss)
    5.5       10.3       0.2       (10.6 )     9.1       (7.0 )     5.4       35.9       (22.8 )
                                                                         
Net Income
  $ 225.4     $ 225.8     $ 220.8     $ 209.7     $ 229.8     $ 199.4     $ 221.1     $ 267.2     $ 164.9  
                                                                         
Net Income Per Common Share -
                                                                       
Assuming Dilution
  $ 0.72     $ 0.71     $ 0.68     $ 0.63     $ 0.69     $ 0.60     $ 0.66     $ 0.80     $ 0.50  
 
6.1

 
 
Unum Group Financial Results for Unum US Segment
 
                               
 
 
Three Months Ended
   
Year Ended
 
 
 
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
  $ 1,219.4     $ 1,216.1     $ 4,854.6     $ 4,873.1     $ 4,963.0  
Net Investment Income
    321.6       304.6       1,263.8       1,200.5       1,136.4  
Other Income
    31.0       30.5       123.3       118.7       132.7  
Total Operating Revenue
    1,572.0       1,551.2       6,241.7       6,192.3       6,232.1  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    960.7       952.6       3,849.4       3,855.9       3,998.4  
Commissions
    139.3       136.2       525.6       516.6       518.6  
Interest and Debt Expense
    0.3       0.3       1.2       2.0       4.2  
Deferral of Acquisition Costs
    (88.1 )     (87.9 )     (333.0 )     (335.5 )     (329.7 )
Amortization of Deferred Acquisition Costs
    83.3       86.6       332.9       317.2       320.3  
Other Expenses
    267.4       264.2       1,039.6       1,061.1       1,036.2  
Total Benefits and Expenses
    1,362.9       1,352.0       5,415.7       5,417.3       5,548.0  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 209.1     $ 199.2     $ 826.0     $ 775.0     $ 684.1  
                                         
Operating Ratios
                                       
Benefit Ratio
    78.8 %     78.3 %     79.3 %     79.1 %     80.6 %
Other Expense Ratio
    21.9 %     21.7 %     21.4 %     21.8 %     20.9 %
Before-tax Profit Margin
    17.1 %     16.4 %     17.0 %     15.9 %     13.8 %
 
7

 
 
Unum Group Financial Results for Unum US Group Disability
 
                               
 
 
Three Months Ended
   
Year Ended
 
 
 
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Group Long-term Disability
  $ 397.0     $ 415.6     $ 1,639.4     $ 1,726.9     $ 1,838.5  
Group Short-term Disability
    111.0       106.2       430.9       432.8       435.1  
Total Premium Income
    508.0       521.8       2,070.3       2,159.7       2,273.6  
Net Investment Income
    147.7       151.3       614.6       629.4       631.3  
Other Income
    22.2       21.7       86.7       88.9       100.2  
Total Operating Revenue
    677.9       694.8       2,771.6       2,878.0       3,005.1  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    426.3       439.3       1,747.8       1,862.8       2,043.9  
Commissions
    40.8       41.1       159.7       162.2       165.9  
Interest and Debt Expense
    0.3       0.3       1.2       2.0       4.2  
Deferral of Acquisition Costs
    (15.2 )     (16.0 )     (59.0 )     (62.5 )     (59.4 )
Amortization of Deferred Acquisition Costs
    15.1       16.4       63.5       67.3       76.7  
Other Expenses
    137.1       137.9       543.7       572.6       572.4  
Total Benefits and Expenses
    604.4       619.0       2,456.9       2,604.4       2,803.7  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 73.5     $ 75.8     $ 314.7     $ 273.6     $ 201.4  
                                         
Operating Ratios
                                       
Benefit Ratio
    83.9 %     84.2 %     84.4 %     86.3 %     89.9 %
Other Expense Ratio
    27.0 %     26.4 %     26.3 %     26.5 %     25.2 %
Before-tax Profit Margin
    14.5 %     14.5 %     15.2 %     12.7 %     8.9 %
                                         
Premium Persistency:
                                       
Group Long-term Disability
    89.7 %     90.0 %     89.4 %     86.9 %     87.8 %
Group Short-term Disability
    90.7 %     89.4 %     88.6 %     86.8 %     82.1 %
                                         
Case Persistency:
                                       
Group Long-term Disability
    89.2 %     88.6 %     88.4 %     87.4 %     89.2 %
Group Short-term Disability
    87.7 %     87.6 %     87.3 %     86.5 %     88.2 %
 
7.1

 
 
Unum Group Financial Results for Unum US Group Life and Accidental Death and Dismemberment
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Group Life
  $ 273.4     $ 270.1     $ 1,090.3     $ 1,057.7     $ 1,062.8  
Accidental Death & Dismemberment
    27.1       26.0       106.1       104.9       127.6  
Total Premium Income
    300.5       296.1       1,196.4       1,162.6       1,190.4  
Net Investment Income
    34.2       31.8       129.6       126.5       126.0  
Other Income
    0.5       0.6       2.4       1.9       2.3  
Total Operating Revenue
    335.2       328.5       1,328.4       1,291.0       1,318.7  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    210.2       206.5       839.9       815.5       827.6  
Commissions
    23.5       22.3       89.3       85.4       85.4  
Deferral of Acquisition Costs
    (13.1 )     (12.8 )     (49.3 )     (48.1 )     (40.3 )
Amortization of Deferred Acquisition Costs
    10.8       12.0       43.3       45.9       55.0  
Other Expenses
    51.0       49.3       196.5       197.6       180.1  
Total Benefits and Expenses
    282.4       277.3       1,119.7       1,096.3       1,107.8  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 52.8     $ 51.2     $ 208.7     $ 194.7     $ 210.9  
                                         
Operating Ratios
                                       
Benefit Ratio
    70.0 %     69.7 %     70.2 %     70.1 %     69.5 %
Other Expense Ratio
    17.0 %     16.6 %     16.4 %     17.0 %     15.1 %
Before-tax Profit Margin
    17.6 %     17.3 %     17.4 %     16.7 %     17.7 %
                                         
Premium Persistency:
                                       
Group Life
    86.4 %     92.3 %     91.5 %     86.9 %     83.8 %
Accidental Death & Dismemberment
    86.1 %     90.9 %     90.7 %     88.1 %     86.4 %
                                         
Case Persistency:
                                       
Group Life
    88.3 %     88.3 %     88.3 %     87.2 %     89.1 %
Accidental Death & Dismemberment
    88.5 %     88.6 %     88.4 %     87.2 %     89.2 %
 
7.2

 
 
Unum Group Financial Results for Unum US Supplemental and Voluntary
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Individual Disability - Recently Issued
  $ 115.1     $ 118.4     $ 457.9     $ 463.7     $ 471.5  
Long-term Care
    150.6       149.2       599.2       594.7       580.7  
Voluntary Benefits
    145.2       130.6       530.8       492.4       446.8  
Total Premium Income
    410.9       398.2       1,587.9       1,550.8       1,499.0  
Net Investment Income
    139.7       121.5       519.6       444.6       379.1  
Other Income
    8.3       8.2       34.2       27.9       30.2  
Total Operating Revenue
    558.9       527.9       2,141.7       2,023.3       1,908.3  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    324.2       306.8       1,261.7       1,177.6       1,126.9  
Commissions
    75.0       72.8       276.6       269.0       267.3  
Deferral of Acquisition Costs
    (59.8 )     (59.1 )     (224.7 )     (224.9 )     (230.0 )
Amortization of Deferred Acquisition Costs
    57.4       58.2       226.1       204.0       188.6  
Other Expenses
    79.3       77.0       299.4       290.9       283.7  
Total Benefits and Expenses
    476.1       455.7       1,839.1       1,716.6       1,636.5  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 82.8     $ 72.2     $ 302.6     $ 306.7     $ 271.8  
                                         
Operating Ratios
                                       
Benefit Ratios
                                       
Individual Disability - Recently Issued
    52.2 %     50.5 %     53.3 %     51.4 %     53.3 %
Long-term Care
    126.4 %     116.8 %     121.0 %     111.6 %     106.1 %
Voluntary Benefits
    50.8 %     55.7 %     55.1 %     56.0 %     58.0 %
Other Expense Ratio
    19.3 %     19.3 %     18.9 %     18.8 %     18.9 %
Before-tax Profit Margin
    20.2 %     18.1 %     19.1 %     19.8 %     18.1 %
                                         
Interest Adjusted Loss Ratios
                                       
Individual Disability - Recently Issued
    30.9 %     30.7 %     32.5 %     32.5 %     35.9 %
Long-term Care
    83.0 %     78.5 %     80.8 %     76.5 %     75.5 %
                                         
Premium Persistency:
                                       
Individual Disability - Recently Issued
    89.8 %     89.8 %     90.7 %     89.6 %     90.7 %
Long-term Care
    95.6 %     95.4 %     95.8 %     95.1 %     95.5 %
Voluntary Benefits
    79.5 %     80.0 %     80.1 %     79.9 %     80.4 %
 
7.3

 
 
Unum Group Financial Results for Unum UK Segment
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Group Long-term Disability
  $ 103.4     $ 109.3     $ 421.2     $ 482.4     $ 656.3  
Group Life
    47.6       42.8       171.6       147.8       174.6  
Supplemental and Voluntary
    16.1       13.7       57.8       55.9       58.4  
Total Premium Income
    167.1       165.8       650.6       686.1       889.3  
Net Investment Income
    44.9       39.8       170.5       124.5       181.9  
Other Income
    0.1       0.5       1.2       2.4       2.0  
Total Operating Revenue
    212.1       206.1       822.3       813.0       1,073.2  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    115.8       104.6       435.8       373.6       511.4  
Commissions
    10.9       10.3       44.1       46.7       59.0  
Deferral of Acquisition Costs
    (6.7 )     (6.6 )     (28.3 )     (29.1 )     (37.4 )
Amortization of Deferred Acquisition Costs
    7.2       6.8       27.0       30.5       32.4  
Other Expenses
    36.2       30.4       134.9       141.7       183.8  
Total Benefits and Expenses
    163.4       145.5       613.5       563.4       749.2  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 48.7     $ 60.6     $ 208.8     $ 249.6     $ 324.0  
                                         
Operating Ratios
                                       
Benefit Ratio
    69.3 %     63.1 %     67.0 %     54.5 %     57.5 %
Other Expense Ratio
    21.7 %     18.3 %     20.7 %     20.7 %     20.7 %
Before-tax Profit Margin
    29.1 %     36.6 %     32.1 %     36.4 %     36.4 %
                                         
Persistency:
                                       
Group Long-term Disability
    83.5 %     90.5 %     91.3 %     88.5 %     87.4 %
Group Life
    85.7 %     94.7 %     92.7 %     80.1 %     74.9 %
Supplemental and Voluntary
    89.3 %     90.1 %     88.9 %     88.2 %     87.7 %
 
8

 
 
Unum Group Financial Results for Unum UK Segment - Continued
 
                               
(in millions of pounds, except exchange rate)
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Group Long-term Disability
  £ 64.5     £ 70.0     £ 272.3     £ 309.0     £ 353.7  
Group Life
    29.7       27.4       110.9       94.1       93.3  
Supplemental and Voluntary
    10.0       8.7       37.4       35.6       31.6  
Total Premium Income
    104.2       106.1       420.6       438.7       478.6  
Net Investment Income
    28.0       25.4       110.2       79.6       98.5  
Other Income
    0.1       0.4       0.9       1.6       1.2  
Total Operating Revenue
    132.3       131.9       531.7       519.9       578.3  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    72.3       66.9       281.4       238.3       275.8  
Commissions
    6.8       6.6       28.5       29.8       31.9  
Deferral of Acquisition Costs
    (4.2 )     (4.2 )     (18.3 )     (18.5 )     (20.1 )
Amortization of Deferred Acquisition Costs
    4.5       4.3       17.4       19.5       17.9  
Other Expenses
    22.6       19.5       87.4       90.2       99.6  
Total Benefits and Expenses
    102.0       93.1       396.4       359.3       405.1  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  £ 30.3     £ 38.8     £ 135.3     £ 160.6     £ 173.2  
                                         
Weighted Average Pound/Dollar Exchange Rate
    1.607       1.562       1.543       1.554       1.871  
 
8.1

 
 
Unum Group Financial Results for Colonial Life Segment
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
                             
Accident, Sickness, and Disability
  $ 172.3     $ 162.8     $ 661.0     $ 625.8     $ 606.9  
Life
    46.2       43.5       176.5       165.6       157.4  
Cancer and Critical Illness
    61.9       58.8       238.2       223.7       213.0  
Total Premium Income
    280.4       265.1       1,075.7       1,015.1       977.3  
Net Investment Income
    31.3       29.9       122.5       114.3       105.7  
Other Income
    0.1       0.2       0.7       0.5       0.4  
Total Operating Revenue
    311.8       295.2       1,198.9       1,129.9       1,083.4  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    144.1       124.8       534.7       480.6       464.0  
Commissions
    61.2       57.7       232.6       215.3       211.8  
Deferral of Acquisition Costs
    (63.5 )     (60.4 )     (246.4 )     (229.0 )     (223.8 )
Amortization of Deferred Acquisition Costs
    47.8       47.8       187.2       178.5       166.4  
Other Expenses
    53.2       52.3       208.6       203.6       196.9  
Total Benefits and Expenses
    242.8       222.2       916.7       849.0       815.3  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 69.0     $ 73.0     $ 282.2     $ 280.9     $ 268.1  
                                         
Operating Ratios
                                       
Benefit Ratio
    51.4 %     47.1 %     49.7 %     47.3 %     47.5 %
Other Expense Ratio
    19.0 %     19.7 %     19.4 %     20.1 %     20.1 %
Before-tax Profit Margin
    24.6 %     27.5 %     26.2 %     27.7 %     27.4 %
                                         
Persistency:
                                       
Accident, Sickness, and Disability
    75.0 %     76.2 %     75.9 %     74.4 %     75.8 %
Life
    86.0 %     85.0 %     86.0 %     84.7 %     84.7 %
Cancer and Critical Illness
    84.6 %     84.6 %     84.9 %     83.8 %     84.0 %
 
9

 
 
Unum Group Financial Results for Individual Disability - Closed Block Segment
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
  $ 202.3     $ 214.0     $ 847.0     $ 898.5     $ 952.3  
Net Investment Income
    182.0       190.7       746.4       740.6       767.5  
Other Income
    22.6       21.5       90.7       100.8       98.6  
Total Operating Revenue
    406.9       426.2       1,684.1       1,739.9       1,818.4  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    352.3       364.6       1,451.3       1,489.6       1,544.8  
Commissions
    12.6       13.7       52.0       58.1       62.7  
Interest and Debt Expense
    2.7       2.8       11.7       16.6       35.1  
Other Expenses
    29.4       33.4       124.9       141.3       148.1  
Total Benefits and Expenses
    397.0       414.5       1,639.9       1,705.6       1,790.7  
                                         
Operating Income Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ 9.9     $ 11.7     $ 44.2     $ 34.3     $ 27.7  
                                         
Operating Ratios
                                       
Interest Adjusted Loss Ratio
    84.7 %     84.5 %     85.0 %     81.6 %     82.2 %
Other Expense Ratio
    14.5 %     15.6 %     14.7 %     15.7 %     15.6 %
Before-tax Profit Margin
    4.9 %     5.5 %     5.2 %     3.8 %     2.9 %
Premium Persistency
    92.8 %     93.3 %     93.0 %     93.2 %     93.8 %
 
10

 
 
Unum Group Financial Results for Corporate and Other Segment
 
                               
 
 
Three Months Ended
   
Year Ended
 
   
3/31/2011
   
3/31/2010
   
12/31/2010
   
12/31/2009
   
12/31/2008
 
Operating Revenue
                             
Premium Income
  $ 0.3     $ 2.2     $ 3.5     $ 2.7     $ 1.4  
Net Investment Income
    38.9       48.0       192.3       166.7       197.5  
Other Income
    5.9       7.1       25.7       34.8       42.2  
Total Operating Revenue
    45.1       57.3       221.5       204.2       241.1  
                                         
Benefits and Expenses
                                       
Benefits and Change in Reserves for Future Benefits
    20.1       22.3       82.9       91.9       107.8  
Commissions
    0.3       0.4       1.1       0.4       1.2  
Interest and Debt Expense
    34.9       30.3       128.9       106.8       117.4  
Other Expenses
    11.5       13.2       63.2       64.3       28.7  
Total Benefits and Expenses
    66.8       66.2       276.1       263.4       255.1  
                                         
Operating Loss Before Income Taxes and
                                       
Net Realized Investment Gains and Losses
  $ (21.7 )   $ (8.9 )   $ (54.6 )   $ (59.2 )   $ (14.0 )
 
11

 
 
Unum Group Reserves
 
                                                 
   
March 31, 2011
 
   
Gross
   
Total
       
   
Policy
         
Claim Reserves
               
Reinsurance
   
Total
 
   
Reserves
   
%
   
Incurred
   
IBNR
   
%
   
Total
   
Ceded
   
Net
 
                                                 
Group Disability
  $ -       - %   $ 7,402.3     $ 604.4       32.9 %   $ 8,006.7     $ 67.1     $ 7,939.6  
Group Life and Accidental Death & Dismemberment
    71.8       0.5       763.3       149.5       3.7       984.6       2.6       982.0  
Individual Disability - Recently Issued
    537.4       3.9       1,021.4       98.9       4.6       1,657.7       88.5       1,569.2  
Long-term Care
    3,992.1       28.6       404.9       39.3       1.8       4,436.3       48.8       4,387.5  
Voluntary Benefits
    1,077.6       7.7       24.0       59.8       0.4       1,161.4       25.2       1,136.2  
Unum US Segment
    5,678.9       40.7       9,615.9       951.9       43.4       16,246.7       232.2       16,014.5  
                                                                 
Unum UK Segment
    27.1       0.2       2,107.5       148.5       9.3       2,283.1       108.1       2,175.0  
                                                                 
Colonial Life Segment
    1,336.6       9.6       235.4       81.6       1.3       1,653.6       15.8       1,637.8  
                                                                 
Individual Disability - Closed Block Segment
    1,214.3       8.7       10,349.0       304.5       43.8       11,867.8       1,471.0       10,396.8  
                                                                 
Corporate and Other Segment
    5,695.9       40.8       336.5       196.7       2.2       6,229.1       4,836.5       1,392.6  
                                                                 
Subtotal, Excluding Unrealized Adjustment
  $ 13,952.8       100.0 %   $ 22,644.3     $ 1,683.2       100.0 %     38,280.3       6,663.6       31,616.7  
                                                                 
Unrealized Adjustment to Reserves for
                                                               
Unrealized Gain on Securities
                                            2,933.6       157.1       2,776.5  
                                                                 
Consolidated
                                          $ 41,213.9     $ 6,820.7     $ 34,393.2  
 
12

 
 
Unum Group Reserves
 
                                                 
   
December 31, 2010
 
   
Gross
   
Total
       
   
Policy
         
Claim Reserves
               
Reinsurance
   
Total
 
   
Reserves
   
%
   
Incurred
   
IBNR
   
%
   
Total
   
Ceded
   
Net
 
                                                 
Group Disability
  $ -       - %   $ 7,480.2     $ 590.2       33.2 %   $ 8,070.4     $ 69.4     $ 8,001.0  
Group Life and Accidental Death & Dismemberment
    72.9       0.5       783.7       152.8       3.8       1,009.4       1.5       1,007.9  
Individual Disability - Recently Issued
    534.5       3.9       1,005.1       99.9       4.5       1,639.5       88.3       1,551.2  
Long-term Care
    3,867.1       27.9       391.6       38.5       1.8       4,297.2       47.8       4,249.4  
Voluntary Benefits
    1,060.3       7.7       24.1       59.0       0.4       1,143.4       24.8       1,118.6  
Unum US Segment
    5,534.8       40.0       9,684.7       940.4       43.7       16,159.9       231.8       15,928.1  
                                                                 
Unum UK Segment
    26.6       0.2       2,057.6       142.7       9.0       2,226.9       105.6       2,121.3  
                                                                 
Colonial Life Segment
    1,318.0       9.5       228.9       78.6       1.3       1,625.5       17.8       1,607.7  
                                                                 
Individual Disability - Closed Block Segment
    1,249.1       9.0       10,335.3       309.6       43.7       11,894.0       1,457.4       10,436.6  
                                                                 
Corporate and Other Segment
    5,703.8       41.3       364.7       196.9       2.3       6,265.4       4,860.1       1,405.3  
                                                                 
Subtotal, Excluding Unrealized Adjustment
  $ 13,832.3       100.0 %   $ 22,671.2     $ 1,668.2       100.0 %     38,171.7       6,672.7       31,499.0  
                                                                 
Unrealized Adjustment to Reserves for
                                                               
Unrealized Gain on Securities
                                            3,108.3       159.0       2,949.3  
                                                                 
Consolidated
                                          $ 41,280.0     $ 6,831.7     $ 34,448.3  
 
12.1

 
 
Unum Group Investment Fact Sheet at March 31, 2011
 
                               
                               
Fixed Maturity Securities (Fair Value)
   
3/31/2011
   
Selected Statistics
 
3/31/11
   
12/31/10
 
                               
Public
    $ 25,912.1       64.3 %  
Duration Weighted Book Yield
    6.69 %     6.72 %
Asset-Backed Securities (1)
      308.9       0.8    
Average Duration (in years)
    7.52       7.55  
Residential Mortgage-Backed Securities (2)
      3,039.9       7.5    
Average Credit Quality
     A       A  
Private Placements
      4,321.2       10.7                      
High Yield
      2,866.5       7.1                      
Government Securities
      2,542.0       6.4                      
Municipal Securities
      1,267.6       3.1                      
Redeemable Preferred Stocks (3)
      56.9       0.1                      
Total
    $ 40,315.1       100.0 %                    
                                       
                                       
Quality Ratings of Fixed Maturity Securities
   
Amortized Cost
   
Fair Value
   
Schedule BA and Non-Current
               
                                       
Aaa
      14.1 %     14.2 %  
Total Non-Current Investments
  $ 59.9     $ 56.2  
Aa
      9.9       9.8    
Total Schedule BA Assets
  $ 397.3     $ 379.3  
A
      28.5       28.9                      
Baa
      40.0       40.0                      
Below Baa
      7.5       7.1                      
Total
      100.0 %     100.0 %                    
                                       
(1) Includes $0.7 million of high yield asset-backed securities.
 
(2) Includes $0.1 million of high yield mortgage-backed securities.
 
(3) Includes $7.2 million of high yield preferred stock.
 
 
13

 
 
Unum Group Investment Fact Sheet at March 31, 2011
 
                                     
Fixed Maturity Securities - By Industry Classification - Unrealized Gain (Loss)
 
                                     
Classification
 
Fair Value
   
Net
Unrealized
Gain
   
Fair Value of Fixed
Maturity Securities
with Gross
Unrealized Loss
   
Gross
Unrealized
Loss
   
Fair Value of Fixed
Maturity Securities
with Gross
Unrealized Gain
   
Gross
Unrealized
Gain
 
Basic Industry
  $ 2,175.3     $ 152.7     $ 281.4     $ 11.1     $ 1,893.9     $ 163.8  
Capital Goods
    3,491.9       328.1       336.9       11.1       3,155.0       339.2  
Communications
    2,728.0       291.8       294.1       10.3       2,433.9       302.1  
Consumer Cyclical
    1,298.2       72.5       298.2       22.3       1,000.0       94.8  
Consumer Non-Cyclical
    5,063.8       466.6       323.8       19.2       4,740.0       485.8  
Energy (Oil & Gas)
    3,303.3       396.9       129.9       1.7       3,173.4       398.6  
Financial Institutions
    3,473.6       126.4       870.1       31.0       2,603.5       157.4  
Mortgage/Asset-Backed
    3,348.8       310.5       27.3       0.9       3,321.5       311.4  
Sovereigns
    1,439.0       151.6       -       -       1,439.0       151.6  
Technology
    788.1       92.7       28.5       0.2       759.6       92.9  
Transportation
    1,040.1       119.9       59.2       2.2       980.9       122.1  
U.S. Government Agencies
                                               
and Municipalities
    2,370.6       89.4       811.8       60.7       1,558.8       150.1  
Utilities
    9,737.5       745.8       1,178.4       46.6       8,559.1       792.4  
Redeemable Preferred Stocks
    56.9       1.1       30.0       0.8       26.9       1.9  
 Total
  $ 40,315.1     $ 3,346.0     $ 4,669.6     $ 218.1     $ 35,645.5     $ 3,564.1  
 
Fixed Maturity Securities - Financial Institutions Classification - Unrealized Gain (Loss)
 
                                                 
Associations
  $ 13.1     $ 1.0     $ -     $ -     $ 13.1     $ 1.0  
Banking
    2,056.4       56.6       541.4       24.6       1,515.0       81.2  
Brokerage
    155.5       9.9       10.6       0.8       144.9       10.7  
Finance Non-Captive
    34.7       0.7       -       -       34.7       0.7  
Finance Captive
    201.1       5.3       19.7       1.1       181.4       6.4  
Insurance
    739.1       47.6       207.4       2.6       531.7       50.2  
Other Financial Institutions
    76.6       1.1       40.5       0.9       36.1       2.0  
Real Estate Management Services
    197.1       4.2       50.5       1.0       146.6       5.2  
 Total
  $ 3,473.6     $ 126.4     $ 870.1     $ 31.0     $ 2,603.5     $ 157.4  
 
Gross Unrealized Loss on Fixed Maturity Securities By Length of Time in Unrealized Loss Position
 
                                                 
   
Investment-Grade
           
Below-Investment-Grade
         
Category
 
Fair Value
   
Gross
Unrealized
Loss
           
Fair Value
   
Gross
Unrealized
Loss
         
Less than 91 days
  $ 1,023.0     $ 14.8             $ 77.0     $ 5.2          
91 through 180 days
    2,031.5       82.4               151.4       4.0          
181 through 270 days
    131.7       14.5               7.9       0.1          
271 days to 1 year
    22.0       1.6               42.5       3.1          
Greater than 1 year
    773.6       63.6               409.0       28.8          
 Total
  $ 3,981.8     $ 176.9             $ 687.8     $ 41.2          
 
13.1

 
 
Unum Group Investment Fact Sheet at March 31, 2011
 
                               
Asset and Mortgage-Backed Securities Portfolio
 
                               
   
Amortized
Cost
   
Fair Value
   
% of Total
Fixed Maturity
Securities
   
Average
Rating
 
                               
Asset-Backed Securities
                             
Credit Cards
  $ 287.2     $ 288.8       8.6 %     0.8 %  
AAA
 
Rate Reduction Bonds
    19.0       19.5       0.6       -    
AAA
 
Home Equity
    1.0       0.6       -       -     B  
Collateralized Debt Obligations
    -       -       -       -     -  
Total
    307.2       308.9       9.2       0.8    
AAA
 
                                       
Residential Mortgage-Backed Securities
                                     
Agency CMOs
    2,510.8       2,813.3       84.0       7.0    
AAA
 
Agency Pass-throughs
    159.2       163.8       4.9       0.4    
AAA
 
Non-agency CMOs - Prime
    61.1       62.8       1.9       0.1    
Aa2
 
Alt-A
    -       -       -       -     -  
Subprime
    -       -       -       -     -  
Collateralized Debt Obligations
    -       -       -       -     -  
Total
    2,731.1       3,039.9       90.8       7.5    
AAA
 
                                       
Commercial Mortgage-Backed Securities
    -       -       -       -     -  
                                       
Total
  $ 3,038.3     $ 3,348.8       100.0 %     8.3 %  
AAA
 
 
13.2

 
 
Unum Group Statutory Capital and Surplus
 
                         
                     
As of
 
   
As of March 31, 2011
   
December 31, 2010
 
   
Capital and
         
Capital and
   
Capital and
 
   
Surplus
   
AVR
   
Surplus + AVR
   
Surplus + AVR
 
Traditional U.S. Life Insurance Companies
                       
                         
Provident Life and Accident
  $ 664.1     $ 79.3     $ 743.4     $ 732.0  
                                 
Unum Life of America
    1,498.2       211.0       1,709.2       1,741.1  
                                 
Paul Revere Life (1)
    423.5       38.4       461.9       451.6  
                                 
Colonial Life & Accident
    490.8       23.5       514.3       514.2  
                                 
Provident Life and Casualty
    146.3       7.3       153.6       149.5  
                                 
First Unum Life
    251.4       9.6       261.0       248.2  
                                 
Paul Revere Variable (1)
    35.6       0.5       36.1       35.6  
                                 
(1) Capital and Surplus of Paul Revere Variable is included in Paul Revere Life
 
                                 
Special Purpose Reinsurance Vehicles
                               
                                 
Tailwind Reinsurance Company
  $ 76.5     $ 0.1     $ 76.6     $ 81.5  
                                 
Northwind Reinsurance Company
    1,202.5       3.3       1,205.8       1,198.6  
                                 
UnumProvident International Ltd.
    533.8       -       533.8       530.4  
 
14

 
 
Unum Group Statutory Operating Results
 
                                     
   
Three Months Ended March 31
 
   
Net Gain (Loss) from
   
Net Realized Investment Gains (Losses)
             
   
Operations After Tax
   
After Tax and Transfers to IMR
   
Net Income (Loss)
 
   
2011
   
2010
   
2011
   
2010
   
2011
   
2010
 
Traditional U.S. Life Insurance Companies
                                   
Provident Life and Accident
  $ 52.3     $ 46.8     $ (2.7 )   $ (1.7 )   $ 49.6     $ 45.1  
Unum Life of America
    43.3       51.7       (8.8 )     (6.9 )     34.5       44.8  
Paul Revere Life
    12.2       14.9       8.2       (0.6 )     20.4       14.3  
Colonial Life & Accident
    25.7       30.6       (0.3 )     -       25.4       30.6  
Provident Life and Casualty
    4.0       2.2       -       -       4.0       2.2  
First Unum Life
    11.9       8.0       0.1       0.1       12.0       8.1  
Paul Revere Variable
    0.7       0.6       0.1       -       0.8       0.6  
Total, as reported
    150.1       154.8       (3.4 )     (9.1 )     146.7       145.7  
Intercompany Dividends
    (4.9 )     -       -       -       (4.9 )     -  
Total, as adjusted
  $ 145.2     $ 154.8     $ (3.4 )   $ (9.1 )   $ 141.8     $ 145.7  
                                                 
Special Purpose Reinsurance Vehicles
                                               
Tailwind Reinsurance Company
  $ 3.2     $ (0.5 )   $ -     $ -     $ 3.2     $ (0.5 )
Northwind Reinsurance Company
    31.6       23.6       -       -       31.6       23.6  
UnumProvident International Ltd.
    1.7       (4.6 )     1.8       1.7       3.5       (2.9 )
Total
  $ 36.5     $ 18.5     $ 1.8     $ 1.7     $ 38.3     $ 20.2  
                                                 
Note: Statutory results for our domestic insurers are reported in conformity with statutory accounting principles as prescribed by the National Association of Insurance Commissioners and adopted by the applicable state laws. For UnumProvident International Ltd., results are reported in conformity with accounting principles as prescribed by applicable Bermuda laws.
 
 
14.1

 
 
Unum Life Insurance Company of America - Statutory Basis
 
Group Accident and Health Statutory Claim Reserves and Liabilities, Net of Ceded
 
On Claims Incurred Prior to January 1
 
                   
   
2011
   
2010
   
2009
 
                   
Reserve Balance from Prior Year End
  $ 6,829.4     $ 6,880.9     $ 6,982.6  
Other Adjustments to Beginning Balance (see Schedule H)
    -       (4.5 )     (5.2 )
Reserve Balance January 1 (a)
    6,829.4       6,876.4       6,977.4  
Paid on Prior Year Claims
    (390.5 )     (374.3 )     (386.4 )
Interest Earned on Reserves
    110.7       113.0       113.0  
Incurred on Prior Year Claims
    (122.3 )     (113.1 )     (103.0 )
Reserve Balance March 31
  $ 6,427.3     $ 6,502.0     $ 6,601.0  
                         
Reserve Balance March 31
          $ 6,502.0     $ 6,601.0  
Paid on Prior Year Claims
            (324.2 )     (335.6 )
Interest Earned on Reserves
            108.2       108.3  
Incurred on Prior Year Claims
            (117.5 )     (104.3 )
Reserve Balance June 30
          $ 6,168.5     $ 6,269.4  
                         
Reserve Balance June 30
          $ 6,168.5     $ 6,269.4  
Paid on Prior Year Claims
            (304.0 )     (307.6 )
Interest Earned on Reserves
            103.1       103.9  
Incurred on Prior Year Claims
            (75.1 )     (69.2 )
Reserve Balance September 30
          $ 5,892.5     $ 5,996.5  
                         
Reserve Balance September 30
          $ 5,892.5     $ 5,996.5  
Paid on Prior Year Claims
            (282.9 )     (271.6 )
Interest Earned on Reserves
            99.0       101.9  
Incurred on Prior Year Claims
            (76.9 )     (83.7 )
Reserve Balance December 31 on Prior Year Claims
            5,631.7       5,743.1  
Reserve Balance December 31 on Current Year Claims
            1,197.7       1,137.8  
Reserve Balance December 31 on Total Claims Incurred (b)
          $ 6,829.4     $ 6,880.9  
                         
(a) balances to Schedule H Part 3 Line 3.2 Column 2
         
(b) balances to Schedule H Part 2 Line C.1 Column 2
         
 
14.2

 
 
Reconciliation to Unum Life Insurance Company of America - Statutory Basis
 
Schedule H Part 3 for Group Accident and Health
 
                   
   
2010
   
2009
   
2008
 
                   
Paid on Prior Year Existing Claims - Full Year
  $ 1,285.4     $ 1,301.2     $ 1,347.1  
(balances to Schedule H Part 3 Line 1.1 Column 2)
                       
                         
Incurred on Prior Year Claims - Full Year
  $ (382.6 )   $ (360.2 )   $ (230.8 )
Interest Earned on Reserves - Full Year
    423.3       427.1       418.5  
Incurred on Prior Year Claims - Full Year, Excluding Interest Earned
  $ 40.7     $ 66.9     $ 187.7  
(balances to Schedule H Part 3 Line 3.3 Column 2)
                       
                         
Note: Group A&H for Unum Life Insurance Company of America includes group long- and short-term disability, group accidental death & dismemberment, and group voluntary disability, cancer, and critical illness products reported in our Unum US segment as well as the reinsurance pools reported in our Corporate and Other segment.
 
 
14.3

 
 
Notes to Statistical Supplement

Non-GAAP Financial Measures
We analyze our Company’s performance using non-GAAP financial measures which exclude certain items and the related tax thereon from net income.  We believe operating income or loss excluding realized investment gains and losses, which are recurring, is a better performance measure and a better indicator of the profitability and underlying trends in our business.  Realized investment gains and losses are dependent on market conditions and general economic events and are not necessarily related to decisions regarding our Company’s underlying business.  We believe book value per common share excluding the components of Accumulated Other Comprehensive Income, certain of which tend to fluctuate depending on market conditions and general economic trends, are important measures.

2011 Significant Transactions and Events

Share Repurchase Program

On February 2, 2011, our board of directors authorized the repurchase of up to $1.0 billion of Unum Group’s common stock, in addition to the amount remaining to be repurchased under the May 2010 $500.0 million authorization (see 2010 Significant Transactions and Events on page 15.1 for further discussion of the 2010 authorization).  The $1.0 billion share repurchase program has an expiration date of August 2012.

On February 4, 2011, we repurchased 7.1 million shares, at a cost of $200.0 million, using an accelerated repurchase agreement with a financial counterparty.  As part of this transaction, we simultaneously entered into a forward contract indexed to the price of Unum Group common stock, which subjected the transaction to a future price adjustment.  Under the terms of the repurchase agreement, we were to receive, or be required to pay, a price adjustment based on the volume weighted average price of Unum Group common stock during the term of the agreement, less a discount.  Any price adjustment payable to us was to be settled in shares of Unum Group common stock.  Any price adjustment we would have been required to pay would have been settled in either cash or common stock.  The final price adjustment settlement occurred on March 18, 2011 resulting in the delivery to us of 0.6 million additional shares.  In total, we repurchased 7.7 million shares pursuant to the accelerated repurchase agreement, which completed the $500.0 million repurchase authorization and initiated the $1.0 billion repurchase program.

In addition to these repurchases, we repurchased an additional 0.9 million shares on the open market at a cost of $23.6 million, for a total repurchase of 8.6 million shares at a cost of $223.6 million during the three months ended March 31, 2011.  The dollar value of shares remaining under the $1.0 billion repurchase program at March 31, 2011 is $920.7 million.

Pursuant to these repurchase programs, we retired 7.7 million shares during the first three months of 2011.  All other repurchased shares have been classified as treasury stock and accounted for using the cost method.
 
(continued on next page)
 
15

 
Financing

During the first three months of 2011, the remaining $225.1 million of our 7.625% senior notes due March 2011 matured.  We also made principal payments of $21.7 million and $2.5 million on our senior secured non-recourse floating rate notes issued by Northwind Holdings, LLC (Northwind) and Tailwind Holdings, LLC (Tailwind), respectively during the three months ended March 31, 2011.

2010 Significant Transactions and Events

Share Repurchase Program

In May 2010, our board of directors authorized the repurchase of up to $500.0 million of Unum Group’s common stock.  The share repurchase program has an expiration date of May 2011.  During 2010, we repurchased 16.4 million shares, at a cost of $356.0 million, including commissions of $0.3 million, under this share repurchase program.

Financing

In 2010, we issued $400.0 million of unsecured senior notes in a public offering.  These notes, due in 2020, bear interest at a fixed rate of 5.625% and are payable semi-annually.  The notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt.  In addition, these notes are effectively subordinated to any indebtedness of our subsidiaries.    

During 2010, we made principal payments of $58.3 million and $10.0 million on our senior secured non-recourse floating rate notes issued by Northwind and Tailwind, respectively.  We also purchased and retired $10.0 million of our 7.08% medium-term notes due 2024.

Tax Law Change

In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law.  Among other things, the new legislation reduces the tax benefits available to an employer that receives a postretirement prescription drug coverage subsidy from the federal government under the Medicare Prescription Drug, Improvement and Modernization Act of 2003.  Under the new legislation, to the extent our future postretirement prescription drug coverage expenses are reimbursed under the subsidy program, the expenses covered by the subsidy will no longer be tax deductible after 2012.  Employers that receive the subsidy must recognize the deferred tax effects relating to the future postretirement prescription drug coverage in the period the legislation was enacted.  Our income tax expense for 2010 includes a non-cash tax charge of $10.2 million which was recorded in the first quarter of 2010 to reflect the impact of the tax law change.
 
(continued on next page)
 
15.1

 
2009 Significant Transactions and Events

Financing

In September 2009, we issued $350.0 million of unsecured senior notes in a public offering.  These notes, due in 2016, bear interest at a fixed rate of 7.125% and are payable semi-annually.  The notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt.

During 2009, we made principal payments of $48.0 million and $10.0 million on our senior secured non-recourse variable rate notes issued by Northwind and Tailwind, respectively.  We also purchased and retired the remaining $132.2 million of our 5.859% senior notes due May 2009, $1.2 million aggregate principal of our 7.19% medium-term notes due 2028, and $0.6 million aggregate principal of our 6.75% notes due 2028 and repaid $58.3 million of reverse repurchase agreements outstanding at December 31, 2008.
 
Accounting Developments

Accounting Standards Codification (ASC) 105 “Generally Accepted Accounting Principles”

In June 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  Securities and Exchange Commission (SEC) rules and interpretive releases, which may not be included in their entirety within the Codification, will remain as authoritative GAAP for SEC registrants.  We adopted Codification effective July 1, 2009.  This adoption of Codification had no effect on our financial position or results of operations.

ASC 320 “Investments - Debt and Equity Securities”

In April 2009, the FASB issued a new accounting standard, now included in ASC 320, which amends the other-than-temporary impairment guidance for debt securities and expands and increases the frequency of previously existing disclosures for other-than-temporary impairments.  The measure of impairment remains fair value.  Under the standard, an other-than-temporaryimpairment must be recognized in earnings for a debt security in an unrealized loss position when an entity either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery.  We adopted this standard effective April 1, 2009.  The cumulative effect of applying the provisions of this standard increased the April 1, 2009 opening balance of retained earnings $14.3 million, net of tax of $7.7 million, with a corresponding adjustment to accumulated other comprehensive income (loss).

(continued on next page)
 
15.2

 
2008 Significant Transactions and Events

Stock Repurchase Agreement

During 2007, our board of directors authorized the repurchase of up to $700.0 million of Unum Group’s common stock.  During 2008, we repurchased $700.0 million or 29.9 million shares of common stock under this share repurchase program. 

Financing

During 2008, we purchased and retired $17.8 million of our outstanding 5.859% notes due May 2009 and $175.0 million of our 5.997% senior notes due May 2008.  We made principal payments of $59.3 million and $10.0 million on our senior secured non-recourse variable rate notes issued by Northwind and Tailwind, respectively.  We also purchased and retired $36.6 million of our 6.85% senior debentures due 2015.  The costs associated with this debt reduction decreased our 2008 income approximately $0.4 million before tax, or $0.3 million after tax.
 
 
 
 
15.3