8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 29, 2007

UNUMPROVIDENT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-11834	62-1598430
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1 Fountain Square

Chattanooga, Tennessee 37402

(Address of principal executive offices)(Zip Code)

(423) 294-1011

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 29, 2007, UnumProvident Corporation issued a press release reporting its results for the fourth quarter of 2006, a copy of which is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Also on January 29, 2007, UnumProvident Corporation posted on its website at www.unumprovident.com the Statistical Supplement relating to its financial results for the fourth quarter of 2006. A copy of the Statistical Supplement is furnished herewith as Exhibit 99.2 and incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this Item 2.02, including Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information and exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On January 29, 2007, UnumProvident Corporation posted on its website at www.unumprovident.com updated information with regard to its claim reassessment process for the fourth quarter of 2006.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this Item 7.01, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed with this Report:

99.1 Press release of UnumProvident Corporation dated January 29, 2007, of earnings for the fourth quarter of 2006.

99.2 Statistical Supplement of UnumProvident Corporation for the fourth quarter of 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UnumProvident Corporation (Registrant)
Date: January 29, 2007	By:	/s/ Charles L. Glick
		Name: Charles L. Glick Title:   Executive Vice President and General Counsel

INDEX TO EXHIBITS

EXHIBIT
99.1	Press release of UnumProvident Corporation dated January 29, 2007, of earnings for the fourth quarter of 2006.
99.2	Statistical Supplement of UnumProvident Corporation for the fourth quarter of 2006.

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE	For additional information contact:	Thomas A. H. White Senior Vice President, Investor Relations 423.294.8996
January 29, 2007		Madhavi Venkatesan Assistant Vice President, Investor Relations 423.294.1630
		Jim Sabourin Vice President, Corporate Communications 423.294.6043

UnumProvident Corporation Reports

Fourth Quarter 2006 Results

Improved Operating Trends in Unum US, Unum UK and Colonial Segments;

Leadership Roles at Unum US Announced

Chattanooga, TN – UnumProvident Corporation (NYSE: UNM) announced today its results for the fourth quarter of 2006. The Company reported net income of $276.1 million ($0.80 per diluted common share), compared to net income of $137.5 million ($0.43 per diluted common share) for the fourth quarter of 2005.

Included in the results for the fourth quarter of 2006 is income of $93.9 million after tax ($0.27 per diluted common share) resulting from debt extinguishment costs of $1.9 million after tax, income of $3.9 million after tax attributable to the receipt of interest and tax refunds on prior year tax items in excess of what was previously provided, and an income tax benefit of approximately $91.9 million primarily as the result of group relief benefits obtained from the use of net operating losses in a foreign jurisdiction in which the Company’s businesses operate. Net income also includes net realized after tax investment gains of $0.5 million in the fourth quarter of 2006 and $1.5 million in the fourth quarter of 2005. Additionally, the Company has entered into an agreement to sell GENEX Services, Inc. (GENEX). GENEX is therefore accounted for as an asset held for sale at December 31, 2006 and reported as a discontinued operation.

Adjusting for these items, income from continuing operations on an after tax basis (excluding the net realized investment gains, special tax items, and debt extinguishment costs) was $179.8 million ($0.52 per diluted common share) in the fourth quarter of 2006, compared to $133.3 million ($0.42 per diluted common share) in the fourth quarter of 2005. (See discussion of non-GAAP financial measures and the related reconciliation below.)

Thomas R. Watjen, president and chief executive officer, said, “I am very pleased with our fourth quarter results. We saw strong earnings across all of our business segments, including the Unum US group income protection line of business, which has lagged the performance of our other businesses. Though we benefited from better than expected net investment income and results in Unum UK, as well as several other items, adjusting for these items we still exceeded the consensus estimate and our own internal plans. We are maintaining the guidance we communicated at our November 2006 Investor Day meeting, and our confidence in achieving these targets continues to grow.”

The Company also announced today that Kevin P. McCarthy has been named president of the Unum US operating unit and Robert O. Best will become its chief operating officer. McCarthy formerly served as executive vice president of risk operations for what is now called Unum US while Best was most recently executive vice president of service operations and chief information officer. President and Chief Executive Officer Tom Watjen stated, “Kevin has been instrumental in helping to strengthen the Company operationally and financially in recent years and in better positioning our Unum US operations for the future. I’m confident that he and Bob will provide the leadership required to help us build on the momentum we have created the past several years.”

RESULTS BY SEGMENT

As a part of a broader branding initiative, the Company announced its intention to change its name from UnumProvident Corporation to Unum Group. While this change is pending required legal approvals, the Company has changed its operating segment names as a part of this branding initiative. As a result, the U.S. Brokerage segment has been renamed Unum US and the Unum Limited segment has been renamed Unum UK. The results of GENEX, which were previously included in the Other segment, are now reported as discontinued operations and excluded from segment results for all periods.

In the following discussions of the Company’s segment operating results, “operating revenue” excludes net realized investment gains and losses. “Operating income” or “operating loss” excludes income tax and net realized investment gains and losses.

Unum US Segment

Unum US reported operating income of $135.9 million in the fourth quarter of 2006, compared to income of $103.9 million in the fourth quarter of 2005. Premium income declined very slightly to $1,302.0 million in the fourth quarter of 2006 from $1,309.0 million in the fourth quarter of 2005.

Within this segment, group income protection reported operating income of $35.1 million in the fourth quarter of 2006 compared to $13.6 million in the fourth quarter of 2005. The benefit ratio was 94.0 percent in the fourth quarter compared to 93.9 percent in the fourth quarter 2005 and 94.5 percent in the third quarter of 2006, excluding claim reassessment charges. The Company experienced continued improvements in its claims management while submitted new claim incidence remained generally stable. Premium income in group income protection declined 0.7 percent to $625.1 million in the fourth quarter of 2006, compared to $629.7 million in the fourth quarter of 2005, due to a more disciplined approach to pricing, renewals, and risk selection. Net investment income was $168.4 million in the fourth quarter of 2006 compared to $152.3 million in the same period last year, reflecting a higher level of bond call prepayment fees in the current quarter. Sales of fully insured group long-term income protection products in the fourth quarter of 2006 increased 30.8 percent to $89.1 million, compared to $68.1 million in the year ago quarter. Sales of fully insured group short-term income protection products in the fourth quarter of 2006 increased 2.8 percent to $33.5 million, compared to $32.6 million in the year ago quarter. Premium persistency in the group long-term income protection line of business improved to 87.8 percent for full year 2006 compared to 84.8 percent for full year 2005. Premium persistency in the group short-term income protection line of business improved to 85.6 percent for full year 2006 compared to 79.6 percent for full year 2005.

Group life and accidental death and dismemberment reported a 6.4 percent increase in operating income to $46.3 million in the fourth quarter of 2006, compared to $43.5 million in the fourth quarter of 2005. Premium income declined 4.7 percent to $348.8 million in the fourth quarter of 2006, compared to $366.1 million in the fourth quarter of 2005, reflecting lower sales and persistency in recent quarters as the Company has focused on improving the profitability of the business in a competitive market environment. Sales of group life products in the fourth quarter of 2006 declined 13.7 percent to $55.4 million, compared to $64.2 million in the year ago quarter. Premium persistency in the group life line of business improved to 81.2 percent for the full year 2006, compared to 78.3 percent for the full year 2005.

Unum US supplemental and voluntary lines of business reported a 16.5 percent increase in operating income to $54.5 million in the fourth quarter of 2006, compared to $46.8 million in the fourth quarter of 2005. The improvement in earnings was driven by improved results in all three lines of business—individual income protection – recently issued, voluntary workplace benefits, and long-term care. Premium income increased 4.8 percent to $328.1 million in the fourth quarter of 2006, compared to $313.2 million in the fourth quarter of 2005. New annualized sales in the voluntary workplace benefits line of business declined 7.3 percent in the fourth quarter of 2006 compared to the fourth quarter of 2005 while sales in the individual income protection – recently issued line increased 8.6 percent and long-term care increased 46.3 percent compared with the year ago quarter.

Unum UK Segment

Unum UK reported operating income of $81.8 million in the fourth quarter of 2006, a 65.9 percent increase compared to $49.3 million in the fourth quarter of 2005. Operating income benefited from a decline in the benefit ratio to 60.2 percent in the fourth quarter of 2006 compared to 65.5 percent in the fourth quarter of 2005, resulting from lower claim incidence in the group life line of business and continued favorable risk management results in the group income protection line. Operating income also benefited from higher net investment income and a favorable year over year foreign currency exchange rate. The amortization of deferred acquisition costs in the fourth quarter of 2006 was higher than the year ago quarter reflecting the acceleration of amortization due to the run-off of a small in-force block of individual business. Premium income increased 16.5 percent to $231.0 million in the fourth quarter of 2006, compared to $198.2 million in the fourth quarter of 2005. Sales in increased 76.7 percent to $44.0 million in the fourth quarter of 2006, compared to $24.9 million in the fourth quarter of 2005. In local currency, sales in the quarter increased 58.7 percent.

Colonial Segment

Colonial reported a 30.5 percent increase in operating income to $50.5 million in the fourth quarter of 2006, compared to $38.7 million in the fourth quarter of 2005. Results in the fourth quarter of 2006 benefited from a lower benefit ratio due to continued favorable risk experience in the income protection and life lines of business. Results in the year ago quarter were negatively impacted by litigation costs of $6.8 million. Premium income increased 8.3 percent to $217.2 million in the fourth quarter of 2006, compared to $200.5 million in the fourth quarter of 2005, reflecting current and prior period sales growth and stable persistency. Sales increased 4.7 percent to $101.9 million in the fourth quarter of 2006 from $97.3 million in the fourth quarter of 2005, and for full year 2006 increased 10.0 percent to $315.1 million from $286.4 million for full year 2005. Through year-end 2006, new agent contracts increased

20.3 percent to 2,490 and new accounts increased 10.8 percent to 6,990. Average weekly producers for the year 2006 declined slightly to 1,857 compared to 1,863 in 2005, while average weekly premium per agent increased 10.3 percent to $3,263.

Individual Income Protection – Closed Block Segment

The Individual Income Protection – Closed Block segment reported operating income of $28.7 million in the fourth quarter of 2006, compared to $33.7 million in the fourth quarter of 2005. Net investment income for the fourth quarter of 2006 was $205.5 million compared to $207.5 million in the fourth quarter of 2005. The interest adjusted loss ratio increased to 93.8 percent in the fourth quarter of 2006 compared to 89.0 percent in the fourth quarter of 2005.

Other Segment

The Other segment reported operating income of $6.4 million in the fourth quarter of 2006, compared to $4.7 million in the fourth quarter of 2005, reflecting the continued wind down of product lines that are no longer actively marketed. These results exclude the results of GENEX for all periods reported.

Corporate Segment

The Corporate segment, which includes investment earnings on corporate assets not specifically allocated to a line of business, corporate interest expense, and certain other corporate expenses, reported a loss of $38.4 million in the fourth quarter of 2006, compared to a loss of $43.0 million in the fourth quarter of 2005. Interest expense in the fourth quarter 2006 was $45.8 million compared to $52.5 million in the fourth quarter of 2005. The segment results also include debt extinguishment costs of $2.7 million before tax.

OTHER INFORMATION

Sale of GENEX Services, Inc.

On January 24, 2007 the Company announced that it has entered into a definitive agreement for the sale of its wholly-owned subsidiary, GENEX, to Trident IV, L.P., a fund managed by Stone Point Capital LLC. The sale reflects the Company’s strategy to focus on its core business areas and deploy its capital to the growth of these business lines. The sale is looked upon as a favorable event for both entities as it will allow GENEX to create its own growth strategy to further build its workers’ compensation business. The sale is expected to close in the first half of 2007.

Shares Outstanding

The Company’s average number of shares (000s) outstanding, assuming dilution was 345,527.8 for the fourth quarter of 2006, compared to 318,681.4 for the fourth quarter of 2005.

Book Value

Book value per common share at December 31, 2006 was $22.53, compared to $24.66 at December 31, 2005. Excluding the net unrealized gain on securities and the net gain on cash flow hedges, book value per common share at December 31, 2006 was $20.40 compared to $20.26 at December 31, 2005.

OUTLOOK

The Company is reaffirming its 2007 operating earnings per share guidance of $1.83 to $1.87 based on the current business trends and its expectations for 2007, which includes an improvement in the benefit ratio for the Unum US group income protection line to within a range of 90 percent to 92 percent by the end of the year.

NON-GAAP RECONCILIATION

The Company analyzes its performance using non-GAAP financial measures which exclude certain items and the related tax thereon from net income. The Company believes operating income or loss, excluding realized investment gains and losses, which are recurring, and excluding certain other items specified in the non-GAAP reconciliation, is a better performance measure and a better indicator of the profitability and underlying trends in the business. Realized investment gains and losses are dependent on market conditions and general economic events and are not necessarily related to decisions regarding the Company’s underlying business. The exclusion of certain other items specified in the non-GAAP reconciliation also enhances the understanding and comparability of the Company’s performance and the underlying fundamentals in its operations, but this exclusion is not an indication that similar items may not recur. The Company believes book value per common share excluding unrealized gains and losses on securities and the net gain on cash flow hedges, which also tend to fluctuate dependent on market conditions and general economic trends, is an important measure. For reconciliation to the most directly comparable GAAP measures, refer to the attached digest of earnings.

CONFERENCE CALL INFORMATION

UnumProvident Corporation senior management will host a conference call on Tuesday, January 30, 2007 at 9:00 a.m. (EST) to discuss the results of operations for the fourth quarter and will include forward-looking information, such as guidance on future results and trends in operations, as well as other material information. The dial-in number is (800) 565-5442 for U.S. and Canada. For International, the dial-in

number is (913) 312-1298. Alternatively, a live webcast of the call will be available at www.unum.com in a listen-only mode. It is recommended that webcast viewers access the “Investor and Shareholder” section of our website and opt-in to the webcast fifteen minutes prior to the start of the call. A replay of the call will be available by telephone and on our website through Tuesday, February 6. In addition, the Company’s Statistical Supplement for the fourth quarter of 2006 is available on the Company’s website.

ABOUT UNUMPROVIDENT

UnumProvident is the largest provider of group and individual income protection insurance in the United States and United Kingdom. Through its subsidiaries, UnumProvident insures more than 25 million people and provided approximately $6.2 billion in total benefits to customers in 2006. With primary offices in Chattanooga, Tennessee, and Portland, Maine, the Company employs approximately 11,100 people worldwide. For more information, visit www.unum.com.

SAFE HARBOR STATEMENT

A “safe harbor” is provided for “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Statements in this press release, such as our earnings per share guidance and our Unum US group income protection benefit ratio guidance, which are not historical facts, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include such general matters as general economic or business conditions; events or consequences relating to terrorism and acts of war; competitive factors, including pricing pressures; legislative, regulatory, or tax changes; and the interest rate environment. More specifically, they include fluctuations in insurance reserve liabilities, projected new sales and renewals, persistency rates, incidence and recovery rates, pricing and underwriting projections and experience, retained risks in reinsurance operations, availability and cost of reinsurance, level and results of litigation, rating agency actions, regulatory actions and investigations, negative media attention, the level of pension benefit costs and funding, investment results, including credit deterioration of investments, and effectiveness of product and customer support. For further information of risks and uncertainties that could affect actual results, see the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Form 10-K for the fiscal year ended December 31, 2005 and subsequently filed Form 10-Qs. The forward-looking statements in this press release are being made as of the date of this press release and the Company expressly disclaims any obligation to update any forward-looking statement contained herein.

###

DIGEST OF EARNINGS

(Unaudited)

UnumProvident Corporation (UNM:NYSE)

and Subsidiaries

($ in millions, except share data)
	Three Months Ended December 31					Twelve Months Ended December 31
	2006			2005		2006		2005
Operating Revenue by Segment	$	2,695.4		$	2,617.8	$	10,533.1	$	10,266.0
Net Realized Investment Gain (Loss)		0.7			2.4		2.2		(6.7	)
Total Revenue	$	2,696.1		$	2,620.2	$	10,535.3	$	10,259.3
Operating Income by Segment	$	264.9		$	187.3	$	463.2	$	700.6
Net Realized Investment Gain (Loss)		0.7			2.4		2.2		(6.7	)
Income Tax (Benefit)		(8.6	)		54.9		61.8		189.9
Income from Continuing Operations		274.2			134.8		403.6		504.0
Income from Discontinued Operations, Net of Tax		1.9			2.7		7.4		9.6
Net Income	$	276.1		$	137.5	$	411.0	$	513.6
PER SHARE INFORMATION
Assuming Dilution:
Income from Continuing Operations	$	0.79		$	0.42	$	1.21	$	1.61
Income from Discontinued Operations, Net of Tax		0.01			0.01		0.02		0.03
Net Income	$	0.80		$	0.43	$	1.23	$	1.64
Basic:
Income from Continuing Operations	$	0.80		$	0.45	$	1.25	$	1.71
Income from Discontinued Operations, Net of Tax		0.01			0.01		0.02		0.03
Net Income	$	0.81		$	0.46	$	1.27	$	1.74
Weighted Average Common Shares – Basic (000s)		340,812.6			296,086.4		324,654.9		295,776.4
Weighted Average Common Shares – Assuming Dilution (000s)		345,527.8			318,681.4		334,361.7		312,512.6

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

	Three Months Ended December 31, 2006					Three Months Ended December 31, 2005
	(in millions)		Per Share *			(in millions)		Per Share *
Net Income	$	276.1	$	0.80		$	137.5	$	0.43
Net Realized Investment Gain		0.7		—			2.4		—
Income Tax Expense on Net Realized Investment Gain		0.2		—			0.9		—
Income from Discontinued Operations, Net of Tax		1.9		0.01			2.7		0.01
After-tax Operating Income from Continuing Operations Excluding Net Realized Investment Gain		273.7		0.79			133.3		0.42
Special Tax Items and Debt Extinguishment Costs		93.9		0.27			—		—
After-tax Operating Income from Continuing Operations Excluding Net Realized Investment Gain, Special Tax Items, and Debt Extinguishment Costs	$	179.8	$	0.52		$	133.3	$	0.42
	Three Months Ended September 30, 2006
	(in millions)		Benefit Ratio**
Unum US Group Income Protection
Premium Income	$	615.7
Benefits and Change in Reserves for Future Benefits		858.4		139.4	%
Regulatory Reassessment Charge		276.4
Benefits and Change in Reserves for Future Benefits,
Excluding Regulatory Reassessment Charge		582.0		94.5	%
	As of December 31
	2006					2005
	(in millions)		Per Share			(in millions)		Per Share
Book Value
Total Stockholders' Equity	$	7,718.8	$	22.53		$	7,363.9	$	24.66
Net Unrealized Gain on Securities		534.8		1.56			1,040.7		3.49
Net Gain on Cash Flow Hedges		194.2		0.57			273.3		0.91
Total Stockholders' Equity (excluding SFAS 115 and 133 adjustments)	$	6,989.8	$	20.40		$	6,049.9	$	20.26

* Assuming Dilution

** Benefits and Change in Reserves for Future Benefits as a percent of Premium Income

9

EX-99.2

Exhibit 99.2

UnumProvident

Statistical Supplement Fourth Quarter 2006

TABLE OF CONTENTS

(dollars in millions, except share data)

Interim Results are Unaudited

	Page
Financial Highlights	1
Consolidated Statements of Operations	2
Financial 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	9
Individual Income Protection - Closed Block	10
Other	11
Corporate	12
Reserves	13
Investment Fact Sheets	14
Statutory-Basis Financial Information	15
Notes to Statistical Supplement	16

Throughout this supplement, segment operating results exclude income taxes and realized investment gains and losses.

See “Notes to Statistical Supplement” on page 16 for a discussion of non-GAAP financial measures.

N.M. = not a meaningful percentage

UnumProvident Financial Highlights

	Three Months Ended				Year Ended
	12/31/2006		12/31/2005		12/31/2006		12/31/2005			12/31/2004
Financial Results
Premium Income	$	2,022.0	$	1,988.4	$	7,948.2	$	7,815.6		$	7,839.6
Segment Operating Revenue	$	2,695.4	$	2,617.8	$	10,533.1	$	10,266.0		$	10,258.6
Net Realized Investment Gain (Loss)		0.7		2.4		2.2		(6.7	)		29.2
Revenue	$	2,696.1	$	2,620.2	$	10,535.3	$	10,259.3		$	10,287.8
Income (Loss) from Continuing Operations	$	274.2	$	134.8	$	403.6	$	504.0		$	(201.4	)
Income (Loss) from Discontinued Operations, net of tax		1.9		2.7		7.4		9.6			(51.6	)
Net Income (Loss)	$	276.1	$	137.5	$	411.0	$	513.6		$	(253.0	)
Assets					$	52,823.3	$	51,866.8		$	50,832.3
Stockholders’ Equity					$	7,718.8	$	7,363.9		$	7,224.1

2006

• Full year 2006 results include claim reassessment charges of $411.4 million before tax, or $267.4 million after tax.

• Full year 2006 results include broker compensation settlement expenses of $18.5 million before tax, or $12.7 million after tax.

• Fourth quarter 2006 results include costs related to early retirement of debt of $2.7 million before tax, or $1.9 million after tax, and full year 2006 results include $25.8 million before tax, or $16.9 million after tax.

• Fourth quarter and full year 2006 results include income of $2.6 million before tax, or $3.9 million after tax, attributable to the receipt of interest and tax refunds on prior year tax items in excess of what was previously provided.

• Fourth quarter and full year 2006 results include an income tax benefit of approximately $91.9 million primarily as the result of group relief benefits obtained from the use of net operating losses in a foreign jurisdiction in which our businesses operate.

2005

• Full year 2005 results include a charge of $75.0 million before tax, or $51.6 million after tax, related to the settlement agreement with the California Department of Insurance and related matters.

• Full year 2005 results include a gain on the sale of the U.K. Netherlands branch of $5.7 million before tax, or $4.0 million after tax.

• Full year 2005 results include an income tax benefit of $42.8 million related to the reduction of income tax liabilities.

2004

• Full year 2004 results include a charge of $127.0 million before tax, or $87.8 million after tax, related to the settlement of the multistate market conduct examination.

• Full year 2004 results include a charge of $967.0 million before tax, or $701.0 million after tax, related to the restructuring of the individual income protection - closed block business.

See “Notes to Statistical Supplement” on page 16 for additional information.

1

UnumProvident Financial Highlights

	Three Months Ended				Year Ended
	12/31/2006		12/31/2005		12/31/2006		12/31/2005		12/31/2004
Per Common Share Information
Assuming Dilution:
Income (Loss) from Continuing Operations	$	0.79	$	0.42	$	1.21	$	1.61	$	(0.68	)
Income (Loss) from Discontinued Operations, net of tax		0.01		0.01		0.02		0.03		(0.18	)
Net Income (Loss)	$	0.80	$	0.43	$	1.23	$	1.64	$	(0.86	)
Basic:
Income (Loss) from Continuing Operations	$	0.80	$	0.45	$	1.25	$	1.71	$	(0.68	)
Income (Loss) from Discontinued Operations, net of tax		0.01		0.01		0.02		0.03		(0.18	)
Net Income (Loss)	$	0.81	$	0.46	$	1.27	$	1.74	$	(0.86	)
Dividends Paid	$	0.075	$	0.075	$	0.300	$	0.300	$	0.300
Book Value					$	22.53	$	24.66	$	24.36
Price (UNM closing price on last trading day of period)					$	20.78	$	22.75	$	17.94

1.1

UnumProvident Consolidated Statements of Operations

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Revenue
Premium Income	$	2,022.0		$	1,988.4		$	7,948.2		$	7,815.6		$	7,839.6
Net Investment Income		601.4			564.9			2,320.6			2,188.3			2,158.7
Net Realized Investment Gain (Loss)		0.7			2.4			2.2			(6.7	)		29.2
Other Income		72.0			64.5			264.3			262.1			260.3
Total Revenue		2,696.1			2,620.2			10,535.3			10,259.3			10,287.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		1,812.9			1,802.6			7,577.2			7,083.2			7,248.4
Commissions		205.5			195.3			819.0			804.7			842.3
Interest and Debt Expense - Nonrecourse Debt		1.3			—			1.3			—			—
Interest and Debt Expense - All Other Debt		44.5			52.5			190.5			208.0			207.1
Cost Related to Early Retirement of Debt		2.7			—			25.8			—			—
Deferral of Policy Acquisition Costs		(135.4	)		(117.3	)		(528.2	)		(519.4	)		(557.3	)
Amortization of Deferred Policy Acquisition Costs		124.9			114.3			478.6			463.7			436.7
Amortization of Value of Business Acquired		2.0			3.2			8.0			15.1			15.8
Impairment of Intangible Assets		—			—			—			—			856.4
Other Operating Expenses		372.1			379.9			1,497.7			1,510.1			1,514.1
Total Benefits and Expenses		2,430.5			2,430.5			10,069.9			9,565.4			10,563.5
Income (Loss) from Continuing Operations Before Income Taxes		265.6			189.7			465.4			693.9			(275.7	)
Income Taxes (Benefit)		(8.6	)		54.9			61.8			189.9			(74.3	)
Income (Loss) from Continuing Operations		274.2			134.8			403.6			504.0			(201.4	)
Income (Loss) from Discontinued Operations, net of tax		1.9			2.7			7.4			9.6			(51.6	)
Net Income (Loss)	$	276.1		$	137.5		$	411.0		$	513.6		$	(253.0	)
Average Number of Shares Outstanding
Basic		340,812,551			296,086,409			324,654,923			295,776,405			295,224,305
Dilutive Securities:
Purchase Contracts		3,006,443			19,893,947			8,153,001			14,297,834			—
Options and Other Dilutive Securities		1,708,851			2,701,071			1,553,820			2,438,404			—
Assuming Dilution		345,527,845			318,681,427			334,361,744			312,512,643			295,224,305
Actual Number of Shares Outstanding								342,627,521			298,557,764			296,545,913

2

UnumProvident Sales Data

	Three Months Ended						Year Ended
	12/31/2006		12/31/2005		% Change		12/31/2006		12/31/2005		12/31/2004
Unum US Segment
Fully Insured Products
Group Long-term Income Protection	$	89.1	$	68.1	30.8	%	$	208.5	$	180.4	$	180.4
Group Short-term Income Protection		33.5		32.6	2.8			74.1		74.8		79.5
Group Life		55.4		64.2	(13.7	)		149.8		157.8		166.5
Accidental Death & Dismemberment		6.0		6.3	(4.8	)		13.7		14.7		12.8
Individual Income Protection - Recently Issued		16.4		15.1	8.6			55.4		53.8		61.6
Group Long-term Care		11.3		6.4	76.6			25.1		21.1		18.7
Individual Long-term Care		2.6		3.1	(16.1	)		11.0		13.0		19.5
Voluntary Workplace Benefits		25.5		27.5	(7.3	)		134.2		130.2		114.1
Total Fully Insured Products		239.8		223.3	7.4			671.8		645.8		653.1
Administrative Services Only (ASO) Products
Group Long-term Income Protection		3.2		0.3	N.M.			3.7		1.8		1.1
Group Short-term Income Protection		6.4		3.6	77.8			10.0		5.8		7.3
Total ASO Products		9.6		3.9	146.2			13.7		7.6		8.4
Unum US Segment		249.4		227.2	9.8			685.5		653.4		661.5
Unum UK Segment
Group Long-term Income Protection		39.8		17.5	127.4			79.1		91.2		103.3
Group Life		2.8		5.8	(51.7	)		16.5		33.0		68.1
Individual Income Protection		1.4		1.6	(12.5	)		5.5		8.1		11.1
Unum UK Segment		44.0		24.9	76.7			101.1		132.3		182.5
Colonial Segment
Income Protection		60.0		60.0	—			194.4		176.8		172.5
Life		22.1		19.5	13.3			66.6		60.6		58.6
Cancer and Critical Illness		19.8		17.8	11.2			54.1		49.0		47.4
Colonial Segment		101.9		97.3	4.7			315.1		286.4		278.5
Individual Income Protection - Closed Block Segment		0.9		1.7	(47.1	)		4.4		6.5		7.8
Total Sales from Continuing Operations		396.2		351.1	12.8			1,106.1		1,078.6		1,130.3
Sales from Discontinued Operations		—		—	—			—		—		10.1
Total	$	396.2	$	351.1	12.8		$	1,106.1	$	1,078.6	$	1,140.4

3

UnumProvident Consolidated Balance Sheets

	December 31,
	2006			2005
Assets
Investments
Fixed Maturity Securities	$	35,001.5		$	34,856.8
Mortgage Loans		944.0			739.4
Real Estate		17.9			18.2
Policy Loans		3,429.5			3,201.4
Other Long-term Investments		122.0			122.8
Short-term Investments		648.4			417.9
Total Investments		40,163.3			39,356.5
Cash and Bank Deposits		121.3			67.1
Accounts and Premiums Receivable		2,057.1			1951.6
Reinsurance Receivable		5,512.2			5,609.2
Accrued Investment Income		646.8			618.7
Deferred Policy Acquisition Costs		2,983.1			2,913.3
Value of Business Acquired		78.2			78.5
Goodwill		204.1			202.4
Other Assets		916.4			932.6
Other Assets - Discontinued Operations		112.3			107.3
Separate Account Assets		28.5			29.6
Total Assets	$	52,823.3		$	51,866.8
Liabilities
Policy and Contract Benefits	$	2,220.4		$	2,063.4
Reserves for Future Policy and Contract Benefits		35,689.4			34,041.5
Unearned Premiums		520.1			481.8
Other Policyholders’ Funds		2,019.1			2,235.5
Income Tax		611.7			1,002.3
Long-term Debt - Nonrecourse		130.0			—
Long-term Debt - All Other		2,529.6			3,261.6
Other Liabilities		1,326.7			1,360.3
Other Liabilities - Discontinued Operations		29.0			26.9
Separate Account Liabilities		28.5			29.6
Total Liabilities		45,104.5			44,502.9
Stockholders’ Equity
Common Stock		34.4			30.1
Additional Paid-in Capital		2,200.0			1,627.9
Accumulated Other Comprehensive Income		612.8			1,163.5
Retained Earnings		4,925.8			4,610.4
Treasury Stock		(54.2	)		(54.2	)
Deferred Compensation		—			(13.8	)
Total Stockholders’ Equity		7,718.8			7,363.9
Total Liabilities and Stockholders’ Equity	$	52,823.3		$	51,866.8

4

UnumProvident Deferred Policy Acquisition Costs by Segment

	Unum US			Unum UK			Colonial			Individual Income Protection - Closed Block			Other			Consolidated
Balances at December 31, 2003	$	2,142.1		$	138.3		$	488.4		$	282.2		$	0.9		$	3,051.9
Capitalized		346.0			37.7			173.7			—			(0.1	)		557.3
Amortized		(286.3	)		(19.2	)		(131.2	)		—			—			(436.7	)
Impairment		—			—			—			(282.2	)		—			(282.2	)
Foreign Currency and Other		(5.6	)		(1.9	)		—			—			(0.3	)		(7.8	)
Balances at December 31, 2004		2,196.2			154.9			530.9			—			0.5			2,882.5
Capitalized		311.9			34.1			173.4			—			—			519.4
Amortized		(306.9	)		(21.6	)		(134.7	)		—			(0.5	)		(463.7	)
Foreign Currency and Other		—			(24.9	)		—			—			—			(24.9	)
Balances at December 31, 2005		2,201.2			142.5			569.6			—			—			2,913.3
Capitalized		306.2			34.4			187.6			—			—			528.2
Amortized		(302.2	)		(32.0	)		(144.4	)		—			—			(478.6	)
Foreign Currency and Other		—			20.2			—			—			—			20.2
Balances at December 31, 2006	$	2,205.2		$	165.1		$	612.8		$	—		$	—		$	2,983.1

4.1

UnumProvident Balance Sheets by Segment - December 31, 2006

	Unum US								Unum UK		Colonial		Individual Income Protection - Closed Block		Corporate, Other, and Discontinued Operations			Consolidated
	Group Income Protection		Group Life and Accidental Death & Dismemberment		Supplemental and Voluntary		Total Unum US
Assets
Investments	$	9,618.2	$	2,272.1	$	5,093.6	$	16,983.9	$	3,216.9	$	1,524.8	$	12,244.8	$	6,192.9		$	40,163.3
Deferred Policy Acquisition Costs		571.9		273.1		1,360.2		2,205.2		165.1		612.8		—		—			2,983.1
Value of Business Acquired		—		—		2.4		2.4		60.8		15.0		—		—			78.2
Goodwill		2.5		—		187.5		190.0		14.1		—		—		—			204.1
All Other		968.4		104.6		446.3		1,519.3		447.3		202.4		3,364.7		3,860.9			9,394.6
Total Assets	$	11,161.0	$	2,649.8	$	7,090.0	$	20,900.8	$	3,904.2	$	2,355.0	$	15,609.5	$	10,053.8		$	52,823.3
Liabilities
Reserves and Policyholder Benefits	$	8,756.5	$	1,564.8	$	4,548.5	$	14,869.8	$	2,750.9	$	1,382.5	$	12,684.3	$	8,761.5		$	40,449.0
Debt		—		—		—		—		—		—		—		2,659.6			2,659.6
All Other		365.3		82.3		398.4		846.0		179.5		147.5		26.2		796.7			1,995.9
Total Liabilities		9,121.8		1,647.1		4,946.9		15,715.8		2,930.4		1,530.0		12,710.5		12,217.8			45,104.5
Other Allocated Stockholders’ Equity		2,012.3		973.6		1,834.5		4,820.4		899.6		791.5		2,640.0		(2,161.7	)		6,989.8
Unrealized Gain on Securities		26.9		29.1		308.6		364.6		74.2		33.5		259.0		(2.3	)		729.0
Total Allocated Stockholders’ Equity		2,039.2		1,002.7		2,143.1		5,185.0		973.8		825.0		2,899.0		(2,164.0	)		7,718.8
Total Liabilities and Allocated Stockholders’ Equity	$	11,161.0	$	2,649.8	$	7,090.0	$	20,900.8	$	3,904.2	$	2,355.0	$	15,609.5	$	10,053.8		$	52,823.3

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

UnumProvident Balance Sheets by Segment - December 31, 2005

	Unum US								Unum UK		Colonial		Individual Income Protection - Closed Block		Corporate, Other, and Discontinued Operations			Consolidated
	Group Income Protection		Group Life and Accidental Death & Dismemberment		Supplemental and Voluntary		Total Unum US
Assets
Investments	$	9,498.2	$	2,342.0	$	4,477.8	$	16,318.0	$	2,789.8	$	1,552.3	$	12,535.3	$	6,161.1		$	39,356.5
Deferred Policy Acquisition Costs		593.8		300.4		1,307.0		2,201.2		142.5		569.6		—		—			2,913.3
Value of Business Acquired		—		—		2.7		2.7		59.8		16.0		—		—			78.5
Goodwill		2.5		—		187.5		190.0		12.4		—		—		—			202.4
All Other		843.6		211.3		419.3		1,474.2		330.8		93.7		3,256.8		4,160.6			9,316.1
Total Assets	$	10,938.1	$	2,853.7	$	6,394.3	$	20,186.1	$	3,335.3	$	2,231.6	$	15,792.1	$	10,321.7		$	51,866.8
Liabilities
Reserves and Policyholder Benefits	$	8,298.7	$	1,624.3	$	3,930.5	$	13,853.5	$	2,343.0	$	1,288.0	$	12,631.8	$	8,705.9		$	38,822.2
Debt		—		—		—		—		—		—		—		3,261.6			3,261.6
All Other		437.3		118.7		448.8		1,004.8		253.2		138.6		171.1		851.4			2,419.1
Total Liabilities		8,736.0		1,743.0		4,379.3		14,858.3		2,596.2		1,426.6		12,802.9		12,818.9			44,502.9
Other Allocated Stockholders’ Equity		2,018.9		1,065.3		1,608.3		4,692.5		650.7		753.6		2,540.0		(2,586.9	)		6,049.9
Unrealized Gain on Securities		183.2		45.4		406.7		635.3		88.4		51.4		449.2		89.7			1,314.0
Total Allocated Stockholders’ Equity		2,202.1		1,110.7		2,015.0		5,327.8		739.1		805.0		2,989.2		(2,497.2	)		7,363.9
Total Liabilities and Allocated Stockholders’ Equity	$	10,938.1	$	2,853.7	$	6,394.3	$	20,186.1	$	3,335.3	$	2,231.6	$	15,792.1	$	10,321.7		$	51,866.8

4.3

UnumProvident Financial Results by Segment

	Three Months Ended							Year Ended
	12/31/2006		12/31/2005			% Change		12/31/2006		12/31/2005		% Change
Premium Income
Unum US	$	1,302.0	$	1,309.0		(0.5	)%	$	5,196.0	$	5,229.0	(0.6	)%
Unum UK		231.0		198.2		16.5			842.8		785.3	7.3
Colonial		217.2		200.5		8.3			842.1		787.0	7.0
Individual Income Protection - Closed Block		269.8		279.3		(3.4	)		1,062.8		1,011.7	5.1
Other		2.0		1.4		42.9			4.5		2.6	73.1
		2,022.0		1,988.4		1.7			7,948.2		7,815.6	1.7
Net Investment Income
Unum US		284.6		255.4		11.4			1,063.1		998.2	6.5
Unum UK		50.9		37.7		35.0			174.6		154.2	13.2
Colonial		24.0		24.3		(1.2	)		93.6		96.0	(2.5	)
Individual Income Protection - Closed Block		205.5		207.5		(1.0	)		828.7		770.0	7.6
Other		28.1		29.1		(3.4	)		113.2		120.5	(6.1	)
Corporate		8.3		10.9		(23.9	)		47.4		49.4	(4.0	)
		601.4		564.9		6.5			2,320.6		2,188.3	6.0
Other Income
Unum US		27.7		28.6		(3.1	)		108.5		108.6	(0.1	)
Unum UK		0.1		—		N.M.			0.1		6.1	(98.4	)
Colonial		0.2		0.9		(77.8	)		1.1		4.4	(75.0	)
Individual Income Protection - Closed Block		29.4		25.0		17.6			105.1		95.2	10.4
Other		8.8		10.6		(17.0	)		33.8		36.0	(6.1	)
Corporate		5.8		(0.6	)	N.M.			15.7		11.8	33.1
		72.0		64.5		11.6			264.3		262.1	0.8
Total Operating Revenue
Unum US		1,614.3		1,593.0		1.3			6,367.6		6,335.8	0.5
Unum UK		282.0		235.9		19.5			1,017.5		945.6	7.6
Colonial		241.4		225.7		7.0			936.8		887.4	5.6
Individual Income Protection - Closed Block		504.7		511.8		(1.4	)		1,996.6		1,876.9	6.4
Other		38.9		41.1		(5.4	)		151.5		159.1	(4.8	)
Corporate		14.1		10.3		36.9			63.1		61.2	3.1
		2,695.4		2,617.8		3.0			10,533.1		10,266.0	2.6

5

UnumProvident Financial Results by Segment

	Three Months Ended								Year Ended
	12/31/2006			12/31/2005			% Change		12/31/2006			12/31/2005			% Change
Benefits and Expenses
Unum US	$	1,478.4		$	1,489.1		(0.7	)%	$	6,271.9		$	5,948.1		5.4	%
Unum UK		200.2			186.6		7.3			759.7			757.9		0.2
Colonial		190.9			187.0		2.1			738.1			719.3		2.6
Individual Income Protection - Closed Block		476.0			478.1		(0.4	)		1,925.3			1,797.0		7.1
Other		32.5			36.4		(10.7	)		127.1			129.1		(1.5	)
Corporate		52.5			53.3		(1.5	)		247.8			214.0		15.8
		2,430.5			2,430.5		—			10,069.9			9,565.4		5.3
Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss)
Unum US		135.9			103.9		30.8			95.7			387.7		(75.3	)
Unum UK		81.8			49.3		65.9			257.8			187.7		37.3
Colonial		50.5			38.7		30.5			198.7			168.1		18.2
Individual Income Protection - Closed Block		28.7			33.7		(14.8	)		71.3			79.9		(10.8	)
Other		6.4			4.7		36.2			24.4			30.0		(18.7	)
Corporate		(38.4	)		(43.0	)	10.7			(184.7	)		(152.8	)	(20.9	)
		264.9			187.3		41.4			463.2			700.6		(33.9	)
Income Taxes (Benefit)		(8.8	)		54.0		(116.3	)		61.1			192.3		(68.2	)
Income from Continuing Operations Before Net Realized Investment Gain (Loss)		273.7			133.3		105.3			402.1			508.3		(20.9	)
Net Realized Investment Gain (Loss)		0.7			2.4		(70.8	)		2.2			(6.7	)	132.8
Tax Expense (Benefit) on Net Realized Investment Gain (Loss)		0.2			0.9		(77.8	)		0.7			(2.4	)	129.2
Income from Discontinued Operations, net of tax		1.9			2.7		(29.6	)		7.4			9.6		(22.9	)
Net Income	$	276.1		$	137.5		100.8		$	411.0		$	513.6		(20.0	)

Note: See “Notes to Statistical Supplement” on page 16 for additional information.

5.1

UnumProvident Quarterly Historical Financial Results by Segment

	12/31/06		9/30/06		6/30/06			3/31/06		12/31/05			9/30/05			6/30/05			3/31/05		12/31/04
Premium Income
Unum US	$	1,302.0	$	1,278.6	$	1,311.6		$	1,303.8	$	1,309.0		$	1,293.5		$	1,317.3		$	1,309.2	$	1,349.3
Unum UK		231.0		219.7		200.7			191.4		198.2			204.0			193.1			190.0		177.0
Colonial		217.2		212.8		209.5			202.6		200.5			197.4			195.6			193.5		189.5
Individual Income Protection - Closed Block		269.8		257.8		264.2			271.0		279.3			257.6			232.8			242.0		239.3
Other		2.0		0.1		1.2			1.2		1.4			(0.3	)		1.2			0.3		9.2
		2,022.0		1,969.0		1,987.2			1,970.0		1,988.4			1,952.2			1,940.0			1,935.0		1,964.3
Net Investment Income
Unum US		284.6		261.9		258.9			257.7		255.4			248.4			250.4			244.0		260.9
Unum UK		50.9		45.8		39.9			38.0		37.7			39.2			39.6			37.7		37.4
Colonial		24.0		23.6		23.4			22.6		24.3			23.4			23.3			25.0		24.5
Individual Income Protection - Closed Block		205.5		207.0		214.0			202.2		207.5			192.9			189.7			179.9		203.6
Other		28.1		28.0		28.4			28.7		29.1			29.5			32.8			29.1		31.0
Corporate		8.3		12.5		12.0			14.6		10.9			13.8			12.4			12.3		7.1
		601.4		578.8		576.6			563.8		564.9			547.2			548.2			528.0		564.5
Other Income
Unum US		27.7		27.3		28.1			25.4		28.6			27.8			25.2			27.0		23.2
Unum UK		0.1		—		(0.1	)		0.1		—			5.7			(0.1	)		0.5		0.5
Colonial		0.2		0.2		0.4			0.3		0.9			1.3			1.0			1.2		0.6
Individual Income Protection - Closed Block		29.4		25.5		23.9			26.3		25.0			25.7			19.8			24.7		31.2
Other		8.8		8.3		8.4			8.3		10.6			8.1			8.0			9.3		3.6
Corporate		5.8		3.5		3.0			3.4		(0.6	)		3.1			4.2			5.1		19.3
		72.0		64.8		63.7			63.8		64.5			71.7			58.1			67.8		78.4
Total Operating Revenue
Unum US		1,614.3		1,567.8		1,598.6			1,586.9		1,593.0			1,569.7			1,592.9			1,580.2		1,633.4
Unum UK		282.0		265.5		240.5			229.5		235.9			248.9			232.6			228.2		214.9
Colonial		241.4		236.6		233.3			225.5		225.7			222.1			219.9			219.7		214.6
Individual Income Protection - Closed Block		504.7		490.3		502.1			499.5		511.8			476.2			442.3			446.6		474.1
Other		38.9		36.4		38.0			38.2		41.1			37.3			42.0			38.7		43.8
Corporate		14.1		16.0		15.0			18.0		10.3			16.9			16.6			17.4		26.4
		2,695.4		2,612.6		2,627.5			2,597.6		2,617.8			2,571.1			2,546.3			2,530.8		2,607.2

6

UnumProvident Quarterly Historical Financial Results by Segment

	12/31/06			9/30/06			6/30/06			3/31/06			12/31/05			9/30/05			6/30/05			3/31/05			12/31/04
Benefits and Expenses
Unum US	$	1,478.4		$	1,741.0		$	1,494.1		$	1,558.4		$	1,489.1		$	1,497.8		$	1,481.5		$	1,479.7		$	1,617.7
Unum UK		200.2			200.0			184.4			175.1			186.6			199.1			191.3			180.9			168.2
Colonial		190.9			184.5			183.4			179.3			187.0			180.1			176.3			175.9			174.6
Individual Income Protection - Closed Block		476.0			495.6			468.9			484.8			478.1			480.8			414.6			423.5			436.3
Other		32.5			28.6			32.6			33.4			36.4			28.6			31.5			32.6			39.5
Corporate		52.5			65.1			68.7			61.5			53.3			49.9			54.2			56.6			57.9
		2,430.5			2,714.8			2,432.1			2,492.5			2,430.5			2,436.3			2,349.4			2,349.2			2,494.2
Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss)
Unum US		135.9			(173.2	)		104.5			28.5			103.9			71.9			111.4			100.5			15.7
Unum UK		81.8			65.5			56.1			54.4			49.3			49.8			41.3			47.3			46.7
Colonial		50.5			52.1			49.9			46.2			38.7			42.0			43.6			43.8			40.0
Individual Income Protection - Closed Block		28.7			(5.3	)		33.2			14.7			33.7			(4.6	)		27.7			23.1			37.8
Other		6.4			7.8			5.4			4.8			4.7			8.7			10.5			6.1			4.3
Corporate		(38.4	)		(49.1	)		(53.7	)		(43.5	)		(43.0	)		(33.0	)		(37.6	)		(39.2	)		(31.5	)
		264.9			(102.2	)		195.4			105.1			187.3			134.8			196.9			181.6			113.0
Income Taxes (Benefit)		(8.8	)		(33.8	)		68.5			35.2			54.0			38.8			70.2			29.3			(2.4	)
Income (Loss) from Continuing Operations Before Net Realized Investment Gain (Loss)		273.7			(68.4	)		126.9			69.9			133.3			96.0			126.7			152.3			115.4
Net Realized Investment Gain (Loss)		0.7			4.8			(5.8	)		2.5			2.4			(71.4	)		65.5			(3.2	)		25.8
Tax Expense (Benefit) on Net Realized Investment Gain (Loss)		0.2			1.7			(2.2	)		1.0			0.9			(25.1	)		22.9			(1.1	)		9.0
Income from Discontinued Operations, net of tax		1.9			1.6			1.9			2.0			2.7			2.9			2.0			2.0			2.3
Net Income (Loss)	$	276.1		$	(63.7	)	$	125.2		$	73.4		$	137.5		$	52.6		$	171.3		$	152.2		$	134.5
Per Common Share - Assuming Dilution
Income (Loss) from Continuing Operations	$	0.79		$	(0.19	)	$	0.37		$	0.22		$	0.42		$	0.16		$	0.55		$	0.49		$	0.44
Income from Discontinued Operations, net of tax		0.01			—			0.01			0.01			0.01			0.01			—			—			0.01
Net Income (Loss)	$	0.80		$	(0.19	)	$	0.38		$	0.23		$	0.43		$	0.17		$	0.55		$	0.49		$	0.45

Note: See “Notes to Statistical Supplement” on page 16 for additional information.

6.1

UnumProvident Financial Results for Unum US Segment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income	$	1,302.0		$	1,309.0		$	5,196.0		$	5,229.0		$	5,421.6
Net Investment Income		284.6			255.4			1,063.1			998.2			965.8
Other Income		27.7			28.6			108.5			108.6			89.8
Total Operating Revenue		1,614.3			1,593.0			6,367.6			6,335.8			6,477.2
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		1,107.5			1,105.7			4,752.1			4,419.3			4,614.4
Commissions		125.2			115.8			505.2			501.6			538.3
Deferral of Policy Acquisition Costs		(78.0	)		(67.7	)		(306.2	)		(311.9	)		(346.0	)
Amortization of Deferred Policy Acquisition Costs		71.9			73.7			302.2			306.9			286.3
Amortization of Value of Business Acquired		0.1			0.1			0.3			0.3			0.2
Operating Expenses		251.7			261.5			1,018.3			1,031.9			1,048.5
Total Benefits and Expenses		1,478.4			1,489.1			6,271.9			5,948.1			6,141.7
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	135.9		$	103.9		$	95.7		$	387.7		$	335.5
Operating Ratios
Benefit Ratio		85.1	%		84.5	%		91.5	%		84.5	%		85.1	%
Operating Expense Ratio		19.3	%		20.0	%		19.6	%		19.7	%		19.3	%
Before-tax Profit Margin		10.4	%		7.9	%		1.8	%		7.4	%		6.2	%
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	135.9		$	103.9		$	95.7		$	387.7		$	335.5
Settlement Agreements Claim Reassessment - Reserve Charge		—			—			(349.2	)		—			—
Settlement Agreements Claim Reassessment - Operating Expense Charge		—			—			(15.0	)		—			—
California Settlement Agreement and Related Matters - Reserve Charge		—			—			—			(29.6	)		—
California Settlement Agreement and Related Matters - Operating Expense Charge		—			—			—			(11.1	)		—
Multistate Market Conduct Examination Settlement Agreements - Reserve Charge		—			—			—			—			(80.8	)
Multistate Market Conduct Examination Settlement Agreements - Operating Expense Charge		—			—			—			—			(37.6	)
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	135.9		$	103.9		$	459.9		$	428.4		$	453.9
Operating Ratios, as Adjusted
Benefit Ratio		85.1	%		84.5	%		84.7	%		83.9	%		83.6	%
Operating Expense Ratio		19.3	%		20.0	%		19.3	%		19.5	%		18.6	%
Before-tax Profit Margin		10.4	%		7.9	%		8.9	%		8.2	%		8.4	%

See “Notes to Statistical Supplement” on page 16 for additional information.

7

UnumProvident Financial Results for Unum US Group Income Protection

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income
Group Long-term Income Protection	$	493.8		$	493.2		$	1,953.3		$	1,961.6		$	2,028.6
Group Short-term Income Protection		131.3			136.5			530.2			566.3			616.1
Total Premium Income		625.1			629.7			2,483.5			2,527.9			2,644.7
Net Investment Income		168.4			152.3			621.9			605.7			595.8
Other Income		20.6			21.3			82.3			80.3			69.6
Total Operating Revenue		814.1			803.3			3,187.7			3,213.9			3,310.1
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		587.6			591.1			2,702.5			2,397.7			2,533.1
Commissions		43.0			40.1			175.8			175.1			199.0
Deferral of Policy Acquisition Costs		(16.1	)		(12.8	)		(64.5	)		(64.6	)		(77.1	)
Amortization of Deferred Policy Acquisition Costs		20.8			23.5			86.4			92.2			93.5
Operating Expenses		143.7			147.8			588.6			582.5			619.6
Total Benefits and Expenses		779.0			789.7			3,488.8			3,182.9			3,368.1
Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses	$	35.1		$	13.6		$	(301.1	)	$	31.0		$	(58.0	)
Operating Ratios
Benefit Ratio		94.0	%		93.9	%		108.8	%		94.8	%		95.8	%
Operating Expense Ratio		23.0	%		23.5	%		23.7	%		23.0	%		23.4	%
Before-tax Profit (Loss) Margin		5.6	%		2.2	%		(12.1	)%		1.2	%		(2.2	)%
Persistency - Group Long-term Income Protection								87.8	%		84.8	%		84.8	%
Persistency - Group Short-term Income Protection								85.6	%		79.6	%		80.6	%

7.1

UnumProvident Financial Results for Unum US Group Income Protection - Continued

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	35.1		$	13.6		$	(301.1	)	$	31.0		$	(58.0	)
Settlement Agreements Claim Reassessment - Reserve Charge		—			—			(349.2	)		—			—
Settlement Agreements Claim Reassessment - Operating Expense Charge		—			—			(15.0	)		—			—
California Settlement Agreement and Related Matters - Reserve Charge		—			—			—			(27.3	)		—
California Settlement Agreement and Related Matters - Operating Expense Charge		—			—			—			(10.1	)		—
Multistate Market Conduct Examination Settlement Agreements - Reserve Charge		—			—			—			—			(80.2	)
Multistate Market Conduct Examination Settlement Agreements - Operating Expense Charge		—			—			—			—			(36.5	)
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	35.1		$	13.6		$	63.1		$	68.4		$	58.7
Operating Ratios, as Adjusted
Benefit Ratio		94.0	%		93.9	%		94.8	%		93.8	%		92.7	%
Operating Expense Ratio		23.0	%		23.5	%		23.1	%		22.6	%		22.0	%
Before-tax Profit Margin		5.6	%		2.2	%		2.5	%		2.7	%		2.2	%

See “Notes to Statistical Supplement” on page 16 for additional information.

7.2

UnumProvident Financial Results for Unum US Group Life and Accidental Death and Dismemberment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income
Group Life	$	311.0		$	326.3		$	1,248.1		$	1,306.8		$	1,441.0
Accidental Death & Dismemberment		37.8			39.8			151.6			156.4			182.4
Total Premium Income		348.8			366.1			1,399.7			1,463.2			1,623.4
Net Investment Income		35.6			37.7			141.3			151.9			147.9
Other Income (Loss)		—			0.3			—			2.0			(0.6	)
Total Operating Revenue		384.4			404.1			1,541.0			1,617.1			1,770.7
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		264.9			279.8			1,067.3			1,111.9			1,244.3
Commissions		23.0			20.9			90.1			97.8			106.2
Deferral of Policy Acquisition Costs		(9.0	)		(6.1	)		(37.7	)		(42.7	)		(47.0	)
Amortization of Deferred Policy Acquisition Costs		16.2			18.1			65.0			73.0			67.0
Operating Expenses		43.0			47.9			178.3			188.3			186.8
Total Benefits and Expenses		338.1			360.6			1,363.0			1,428.3			1,557.3
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	46.3		$	43.5		$	178.0		$	188.8		$	213.4
Operating Ratios
Benefit Ratio		75.9	%		76.4	%		76.3	%		76.0	%		76.6	%
Operating Expense Ratio		12.3	%		13.1	%		12.7	%		12.9	%		11.5	%
Before-tax Profit Margin		13.3	%		11.9	%		12.7	%		12.9	%		13.1	%
Persistency - Group Life								81.2	%		78.3	%		84.0	%
Persistency - Accidental Death & Dismemberment								82.8	%		76.9	%		80.3	%

7.3

UnumProvident Financial Results for Unum US Supplemental and Voluntary

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income
Individual Income Protection - Recently Issued	$	105.9		$	103.6		$	438.5		$	425.1		$	415.6
Long-term Care		126.5			122.2			492.4			473.2			444.5
Voluntary Workplace Benefits		95.7			87.4			381.9			339.6			293.4
Total Premium Income		328.1			313.2			1,312.8			1,237.9			1,153.5
Net Investment Income		80.6			65.4			299.9			240.6			222.1
Other Income		7.1			7.0			26.2			26.3			20.8
Total Operating Revenue		415.8			385.6			1,638.9			1,504.8			1,396.4
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		255.0			234.8			982.3			909.7			837.0
Commissions		59.2			54.8			239.3			228.7			233.1
Deferral of Policy Acquisition Costs		(52.9	)		(48.8	)		(204.0	)		(204.6	)		(221.9	)
Amortization of Deferred Policy Acquisition Costs		34.9			32.1			150.8			141.7			125.8
Amortization of Value of Business Acquired		0.1			0.1			0.3			0.3			0.2
Operating Expenses		65.0			65.8			251.4			261.1			242.1
Total Benefits and Expenses		361.3			338.8			1,420.1			1,336.9			1,216.3
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	54.5		$	46.8		$	218.8		$	167.9		$	180.1
Operating Ratios
Benefit Ratios
Individual Income Protection - Recently Issued		61.5	%		58.2	%		58.0	%		57.5	%		57.7	%
Long-term Care		101.7	%		94.9	%		99.2	%		93.0	%		88.8	%
Voluntary Workplace Benefits		64.1	%		66.9	%		62.7	%		66.3	%		69.0	%
Operating Expense Ratio		19.8	%		21.0	%		19.1	%		21.1	%		21.0	%
Before-tax Profit Margin		16.6	%		14.9	%		16.7	%		13.6	%		15.6	%
Interest Adjusted Loss Ratios
Individual Income Protection - Recently Issued		45.7	%		43.8	%		43.5	%		44.4	%		46.1	%
Long-term Care		74.3	%		71.7	%		73.1	%		70.9	%		70.8	%

7.4

UnumProvident Financial Results for Unum US Supplemental and Voluntary - Continued

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Persistency - Individual Income Protection - Recently Issued								90.5	%		89.6	%		90.7	%
Persistency - Long-term Care								95.3	%		95.8	%		95.5	%
Persistency - Voluntary Workplace Benefits								80.9	%		81.1	%		81.0	%
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	54.5		$	46.8		$	218.8		$	167.9		$	180.1
California Settlement Agreement and Related Matters - Reserve Charge		—			—			—			(2.3	)		—
California Settlement Agreement and Related Matters - Operating Expense Charge		—			—			—			(1.0	)		—
Multistate Market Conduct Examination Settlement Agreements - Reserve Charge		—			—			—			—			(0.6	)
Multistate Market Conduct Examination Settlement Agreements - Operating Expense Charge		—			—			—			—			(1.1	)
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	54.5		$	46.8		$	218.8		$	171.2		$	181.8
Operating Ratios, as Adjusted
Benefit Ratios
Individual Income Protection - Recently Issued		61.5	%		58.2	%		58.0	%		57.0	%		57.6	%
Long-term Care		101.7	%		94.9	%		99.2	%		93.0	%		88.8	%
Voluntary Workplace Benefits		64.1	%		66.9	%		62.7	%		66.3	%		69.0	%
Operating Expense Ratio		19.8	%		21.0	%		19.1	%		21.0	%		20.9	%
Before-tax Profit Margin		16.6	%		14.9	%		16.7	%		13.8	%		15.8	%
Interest Adjusted Loss Ratios, as Adjusted
Individual Income Protection - Recently Issued		45.7	%		43.8	%		43.5	%		43.8	%		46.0	%
Long-term Care		74.3	%		71.7	%		73.1	%		70.9	%		70.8	%

See “Notes to Statistical Supplement” on page 16 for additional information.

7.5

UnumProvident Financial Results for Unum UK Segment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income
Group Long-term Income Protection	$	171.7		$	149.5		$	638.9		$	582.9		$	501.8
Group Life		50.4			41.1			171.0			164.1			117.9
Individual Income Protection		8.9			7.6			32.9			38.3			39.4
Total Premium Income		231.0			198.2			842.8			785.3			659.1
Net Investment Income		50.9			37.7			174.6			154.2			139.6
Other Income		0.1			—			0.1			6.1			3.1
Total Operating Revenue		282.0			235.9			1,017.5			945.6			801.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		139.0			129.9			553.5			545.8			464.5
Commissions		12.8			15.4			49.7			56.4			48.9
Deferral of Policy Acquisition Costs		(8.8	)		(7.3	)		(34.4	)		(34.1	)		(37.7	)
Amortization of Deferred Policy Acquisition Costs		15.0			5.6			32.0			21.6			19.2
Amortization of Value of Business Acquired		1.6			3.4			6.6			14.2			14.4
Operating Expenses		40.6			39.6			152.3			154.0			141.2
Total Benefits and Expenses		200.2			186.6			759.7			757.9			650.5
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	81.8		$	49.3		$	257.8		$	187.7		$	151.3
Operating Ratios
Benefit Ratio		60.2	%		65.5	%		65.7	%		69.5	%		70.5	%
Operating Expense Ratio		17.6	%		20.0	%		18.1	%		19.6	%		21.4	%
Before-tax Profit Margin		35.4	%		24.9	%		30.6	%		23.9	%		23.0	%
Persistency - Group Long-term Income Protection								90.4	%		94.2	%		92.1	%
Persistency - Group Life								69.1	%		86.3	%		83.0	%
Persistency - Individual Income Protection								88.2	%		88.4	%		86.7	%
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	81.8		$	49.3		$	257.8		$	187.7		$	151.3
Gain on Sale of Netherlands Branch		—			—			—			5.7			—
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	81.8		$	49.3		$	257.8		$	182.0		$	151.3
Operating Ratio, as Adjusted
Before-tax Profit Margin		35.4	%		24.9	%		30.6	%		23.2	%		23.0	%

See “Notes to Statistical Supplement” on page 16 for additional information.

8

UnumProvident Financial Results for Colonial Segment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income
Income Protection	$	136.4		$	129.1		$	533.3		$	508.9		$	486.2
Life		34.8			29.2			130.5			114.0			106.9
Cancer and Critical Illness		46.0			42.2			178.3			164.1			147.9
Total Premium Income		217.2			200.5			842.1			787.0			741.0
Net Investment Income		24.0			24.3			93.6			96.0			94.5
Other Income		0.2			0.9			1.1			4.4			2.3
Total Operating Revenue		241.4			225.7			936.8			887.4			837.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		113.5			113.5			441.4			433.2			408.3
Commissions		47.1			43.0			184.9			170.7			173.9
Deferral of Policy Acquisition Costs		(48.6	)		(42.3	)		(187.6	)		(173.4	)		(173.7	)
Amortization of Deferred Policy Acquisition Costs		38.0			34.5			144.4			134.7			131.2
Amortization of Value of Business Acquired		0.3			(0.3	)		1.1			0.6			1.2
Operating Expenses		40.6			38.6			153.9			153.5			141.3
Total Benefits and Expenses		190.9			187.0			738.1			719.3			682.2
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	50.5		$	38.7		$	198.7		$	168.1		$	155.6
Operating Ratios
Benefit Ratio		52.3	%		56.6	%		52.4	%		55.0	%		55.1	%
Operating Expense Ratio		18.7	%		19.3	%		18.3	%		19.5	%		19.1	%
Before-tax Profit Margin		23.3	%		19.3	%		23.6	%		21.4	%		21.0	%
Persistency - Income Protection								74.9	%		75.3	%		75.6	%
Persistency - Life								84.2	%		84.1	%		84.1	%
Persistency - Cancer and Critical Illness								82.3	%		83.2	%		82.6	%

9

UnumProvident Financial Results for Individual Income Protection - Closed Block Segment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Premium Income	$	269.8		$	279.3		$	1,062.8		$	1,011.7		$	986.6
Net Investment Income		205.5			207.5			828.7			770.0			799.1
Other Income		29.4			25.0			105.1			95.2			100.3
Total Operating Revenue		504.7			511.8			1,996.6			1,876.9			1,886.0
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		421.7			420.4			1,709.7			1,562.7			1,618.9
Commissions		18.5			20.3			76.2			74.9			76.3
Impairment of Intangible Assets		—			—			—			—			856.4
Operating Expenses		35.8			37.4			139.4			159.4			157.2
Total Benefits and Expenses		476.0			478.1			1,925.3			1,797.0			2,708.8
Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses	$	28.7		$	33.7		$	71.3		$	79.9		$	(822.8	)
Operating Ratios
Interest Adjusted Loss Ratio		93.8	%		89.0	%		97.3	%		89.3	%		93.4	%
Persistency								94.0	%		94.5	%		94.5	%
Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	28.7		$	33.7		$	71.3		$	79.9		$	(822.8	)
Settlement Agreements Claim Reassessment - Reserve Charge		—			—			(47.2	)		—			—
California Settlement Agreement and Related Matters - Reserve Charge		—			—			—			(23.1	)		—
California Settlement Agreement and Related Matters - Operating Expense Charge		—			—			—			(11.2	)		—
Multistate Market Conduct Examination Settlement Agreements - Reserve Charge		—			—			—			—			(3.7	)
Multistate Market Conduct Examination Settlement Agreements - Operating Expense Charge		—			—			—			—			(4.9	)
Individual Income Protection - Closed Block Restructuring - Reserve Charge		—			—			—			—			(110.6	)
Individual Income Protection - Closed Block Restructuring - Intangible Asset Impairment Charge		—			—			—			—			(856.4	)
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	28.7		$	33.7		$	118.5		$	114.2		$	152.8
Interest Adjusted Loss Ratio, as Adjusted		93.8	%		89.0	%		92.9	%		87.3	%		87.5	%

See “Notes to Statistical Supplement” on page 16 for additional information.

10

UnumProvident Financial Results for Other Segment

	Three Months Ended					Year Ended
	12/31/2006			12/31/2005		12/31/2006		12/31/2005		12/31/2004
Operating Revenue
Premium Income	$	2.0		$	1.4	$	4.5	$	2.6	$	31.3
Net Investment Income		28.1			29.1		113.2		120.5		127.3
Other Income		8.8			10.6		33.8		36.0		31.2
Total Operating Revenue		38.9			41.1		151.5		159.1		189.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits		31.2			33.1		120.5		122.2		142.3
Commissions		1.9			0.8		3.0		1.1		4.9
Deferral of Policy Acquisition Costs		—			—		—		—		0.1
Amortization of Deferred Policy Acquisition Costs		—			0.5		—		0.5		—
Operating Expenses		(0.6	)		2.0		3.6		5.3		13.3
Total Benefits and Expenses		32.5			36.4		127.1		129.1		160.6
Operating Income Before Income Taxes and Net Realized Investment Gains and Losses	$	6.4		$	4.7	$	24.4	$	30.0	$	29.2

11

UnumProvident Financial Results for Corporate Segment

	Three Months Ended						Year Ended
	12/31/2006			12/31/2005			12/31/2006			12/31/2005			12/31/2004
Operating Revenue
Net Investment Income	$	8.3		$	10.9		$	47.4		$	49.4		$	32.4
Other Income (Loss)		5.8			(0.6	)		15.7			11.8			33.6
Total Operating Revenue		14.1			10.3			63.1			61.2			66.0
Benefits and Expenses
Interest and Debt Expense - Nonrecourse Debt		1.3			—			1.3			—			—
Interest and Debt Expense - All Other Debt		44.5			52.5			190.5			208.0			207.1
Cost Related to Early Retirement of Debt		2.7			—			25.8			—			—
Unallocated Operating Expenses		4.0			0.8			30.2			6.0			12.6
Total Benefits and Expenses		52.5			53.3			247.8			214.0			219.7
Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses	$	(38.4	)	$	(43.0	)	$	(184.7	)	$	(152.8	)	$	(153.7	)
Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Reported	$	(38.4	)	$	(43.0	)	$	(184.7	)	$	(152.8	)	$	(153.7	)
Broker Compensation Settlement		—			—			(18.5	)		—			—
Interest on Federal Income Tax Refund		2.6			—			2.6			—			—
Cost Related to Early Retirement of Debt		(2.7	)		—			(25.8	)		—			—
Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted	$	(38.3	)	$	(43.0	)	$	(143.0	)	$	(152.8	)	$	(153.7	)

See “Notes to Statistical Supplement” on page 16 for additional information.

12

UnumProvident Reserves

	December 31, 2006
	Gross												Total Reinsurance Ceded		Total Net
	Policy Reserves		%		Claim Reserves				%		Total (1)
					Incurred		IBNR
Group Income Protection	$	—	—	%	$	7,563.0	$	790.3	34.3	%	$	8,353.3	$	101.5	$	8,251.8
Group Life and Accidental Death & Dismemberment		63.1	0.5			736.5		202.2	3.9			1,001.8		2.7		999.1
Individual Income Protection - Recently Issued		431.8	3.2			718.9		71.5	3.3			1,222.2		76.7		1,145.5
Long-term Care		2,067.2	15.2			195.0		31.6	0.9			2,293.8		57.1		2,236.7
Voluntary Workplace Benefits		787.9	5.8			22.3		36.3	0.2			846.5		13.3		833.2
Unum US Segment		3,350.0	24.7			9,235.7		1,131.9	42.6			13,717.6		251.3		13,466.3
Unum UK Segment		28.9	0.2			2,252.8		286.4	10.4			2,568.1		142.4		2,425.7
Colonial Segment		1,021.3	7.5			234.5		100.8	1.4			1,356.6		36.7		1,319.9
Individual Income Protection - Closed Block Segment		1,777.8	13.1			9,794.9		443.9	42.1			12,016.6		1,498.7		10,517.9
Other Segment		6,444.3	47.4			561.4		282.1	3.5			7,287.8		5,686.4		1,601.4
Unrealized Adjustment to Reserves for Future Policy and Contract Benefits		963.1	7.1			—		—	—			963.1		—		963.1
Consolidated	$	13,585.4	100.0	%	$	22,079.3	$	2,245.1	100.0	%	$	37,909.8	$	7,615.5	$	30,294.3

(1) Equals the sum of “Policy and Contract Benefits” and “Reserves for Future Policy and Contract Benefits,” as reported in our consolidated balance sheets. See Note 7 of our “Notes to Consolidated Financial Statements” for a reconciliation.

The increase in the Unum US segment and Individual Income Protection—Closed Block segment IBNR from December 31, 2005 is due to the 2006 revised claim reassessment reserve estimates related to the multistate market conduct examination settlement agreement and California settlement agreement. The increase in Unum US IBNR is offset in part due to a slight decline in insured lives in the group income protection, group life, and accidental death and dismemberment lines of business.

The increase in Unum US Policy and Claim Reserves Incurred from December 31, 2005 is due to growth in the disabled life reserves in the Unum US group income protection line of business and growth in the active life reserves for the Unum US long-term care and individual income protection - recently issued lines of business.

The increase in Policy and Claim Reserves Incurred from December 31, 2005 for the Unum UK segment is due primarily to growth in insured lives and fluctuation in the foreign exchange rate.

The unrealized adjustment to reserves to reflect the changes that would be necessary to policyholder liabilities if the unrealized gains and losses related to our available-for-sale securities had been realized decreased Policy Reserves approximately $158.2 million during 2006, primarily in the Unum US group income protection line of business and the Individual Income Protection - Closed Block segment.

13

UnumProvident Reserves

	December 31, 2005
	Gross												Total Reinsurance Ceded		Total Net
	Policy Reserves		%		Claim Reserves				%		Total (1)
					Incurred		IBNR
Group Income Protection	$	—	—	%	$	7,207.9	$	698.6	34.3	%	$	7,906.5	$	112.4	$	7,794.1
Group Life and Accidental Death & Dismemberment		63.2	0.5			669.9		237.6	3.9			970.7		4.5		966.2
Individual Income Protection - Recently Issued		393.7	3.0			604.8		77.8	3.0			1,076.3		70.3		1,006.0
Long-term Care		1,683.9	12.9			165.2		32.1	0.9			1,881.2		52.5		1,828.7
Voluntary Workplace Benefits		734.8	5.6			23.0		32.3	0.2			790.1		12.6		777.5
Unum US Segment		2,875.6	22.0			8,670.8		1,078.4	42.3			12,624.8		252.3		12,372.5
Unum UK Segment		24.4	0.2			1,866.8		242.9	9.2			2,134.1		117.9		2,016.2
Colonial Segment		955.9	7.3			224.3		83.7	1.3			1,263.9		38.3		1,225.6
Individual Income Protection - Closed Block Segment		1,880.0	14.4			9,588.5		428.9	43.5			11,897.4		1,492.4		10,405.0
Other Segment		6,200.0	47.5			623.8		239.6	3.7			7,063.4		5,436.1		1,627.3
Unrealized Adjustment to Reserves for Future Policy and Contract Benefits		1,121.3	8.6			—		—	—			1,121.3		—		1,121.3
Consolidated	$	13,057.2	100.0	%	$	20,974.2	$	2,073.5	100.0	%	$	36,104.9	$	7,337.0	$	28,767.9

(1) Equals the sum of “Policy and Contract Benefits” and “Reserves for Future Policy and Contract Benefits,” as reported in our consolidated balance sheets. See Note 7 of our “Notes to Consolidated Financial Statements” for a reconciliation.

13.1

UnumProvident Investment Fact Sheet at December 31, 2006

	12/31/2006
Bonds (Fair Value)
Public	$	21,217.5			61.4	%
Mortgage-backed Securities		3,973.8			11.5
Private Placements		3,829.7			11.1
High Yield		2,134.0			6.2
Government Securities		3,408.9			9.9
Municipal Securities		46.5			0.1
Open Derivatives		(54.0	)		(0.2	)
Total	$	34,556.4			100.0	%
	Book Value			Fair Value
Quality Ratings of Bonds
Aaa		23.5	%		23.1	%
Aa		7.3			7.3
A		26.3			26.6
Baa		36.5			36.8
Below Baa		6.4			6.2
Total		100.0	%		100.0	%
	12/31/06			9/30/06
Selected Statistics
Portfolio Yield*		6.73	%		6.74	%
Average Duration		8.83			9.08
Average Credit Quality		A			A
*  Bond equivalent yield is a book value and duration weighted average of the yield on the fixed income securities in the portfolio.
Schedule BA and Non-Current
Total Non-Current Investments	$	12.5		$	11.1
Total Schedule BA Assets	$	108.4		$	105.6

14

UnumProvident Investment Fact Sheet at December 31, 2006

Fixed Maturity Bonds - By Industry Classification - Unrealized Gain/Loss

Classification	Fair Value			Net Unrealized Gain (Loss)			Fair Value of Bonds with Gross Unrealized Loss			Gross Unrealized Loss		Fair Value of Bonds with Gross Unrealized Gain		Gross Unrealized Gain
Basic Industry	$	2,360.9		$	88.8		$	833.9		$	32.9	$	1,527.0	$	121.7
Canadian		268.9			57.2			—			—		268.9		57.2
Capital Goods		2,605.4			173.9			662.6			24.2		1,942.8		198.1
Communications		2,615.0			136.2			861.6			49.9		1,753.4		186.1
Consumer Cyclical		1,463.4			33.8			627.0			31.7		836.4		65.5
Consumer Non-Cyclical		4,043.3			135.4			1,751.8			68.6		2,291.5		204.0
Derivative Instruments		(54.0	)		(46.0	)		(165.8	)		165.8		111.8		119.8
Energy (Oil & Gas)		2,274.7			229.2			366.6			12.8		1,908.1		242.0
Financial Institutions		3,628.0			28.5			2,154.9			71.7		1,473.1		100.2
Mortgage/Asset Backed		3,973.8			208.2			737.0			13.8		3,236.8		222.0
Sovereigns		864.3			36.4			478.3			13.1		386.0		49.5
Technology		477.5			19.5			130.0			7.0		347.5		26.5
Transportation		993.8			98.8			130.8			2.8		863.0		101.6
U.S. Government Agencies		2,620.5			59.7			1,368.6			67.0		1,251.9		126.7
Utilities		6,420.9			308.6			2,267.3			89.5		4,153.6		398.1
Total	$	34,556.4		$	1,568.2		$	12,204.6		$	650.8	$	22,351.8	$	2,219.0

Gross Unrealized Loss on Fixed Maturity Bonds 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	$	1,583.4	$	14.4	$	51.0	$	1.6
91 through 180 days		268.7		4.2		7.2		0.2
181 through 270 days		624.6		9.6		69.2		2.5
271 days to 1 year		3,936.2		149.5		90.1		5.3
Greater than 1 year		5,070.8		412.5		503.4		51.0
Total	$	11,483.7	$	590.2	$	720.9	$	60.6

14.1

UnumProvident Statutory Capital and Surplus

	As of December 31, 2006						As of December 31, 2005
	Capital and Surplus		AVR		Capital and Surplus + AVR		Capital and Surplus + AVR
Provident Life and Accident	$	1,121.8	$	68.0	$	1,189.8	$	1,398.6
Unum Life of America		1,580.1		102.3		1,682.4		1,453.5
Paul Revere Life (1)		1,034.6		35.9		1,070.5		1,162.3
Colonial Life & Accident		370.4		12.4		382.8		360.8
Provident Life and Casualty		100.5		1.7		102.2		92.5
First Unum Life		182.8		6.0		188.8		164.1
Paul Revere Variable (1)		109.5		0.9		110.4		115.5

(1) Capital and Surplus of Paul Revere Variable is included in Paul Revere Life

15

UnumProvident Statutory Operating Results - December 31, 2006

	Year Ended
	Net Gain from Operations After Tax
	Before Infrequent or Unusual Items		Claim Reassessment Charge			Total		Net Realized Capital Gains (Losses) After Tax and Transfers to IMR			Net Income (Loss)
Provident Life and Accident	$	92.3	$	(11.2	)	$	81.1	$	(10.2	)	$	70.9
Unum Life of America		295.9		(273.8	)		22.1		(37.0	)		(14.9	)
Paul Revere Life		124.9		(11.6	)		113.3		(17.4	)		95.9
Colonial Life & Accident		108.8		—			108.8		1.8			110.6
Provident Life and Casualty		13.2		(1.8	)		11.4		(1.1	)		10.3
First Unum Life		46.3		(19.5	)		26.8		(0.6	)		26.2
Paul Revere Variable		8.0		—			8.0		0.4			8.4
Total	$	689.4	$	(317.9	)	$	371.5	$	(64.1	)	$	307.4
	Three Months Ended
	Net Gain from Operations After Tax		Net Realized Capital Gains (Losses) After Tax and Transfers to IMR			Net Income
Provident Life and Accident	$	21.3	$	2.0		$	23.3
Unum Life of America		66.1		(7.2	)		58.9
Paul Revere Life		37.7		(4.1	)		33.6
Colonial Life & Accident		34.5		1.1			35.6
Provident Life and Casualty		4.5		0.1			4.6
First Unum Life		25.7		(0.5	)		25.2
Paul Revere Variable		2.0		(0.1	)		1.9
Total	$	191.8	$	(8.7	)	$	183.1

Note: Statutory results are reported in conformity with statutory accounting principles as prescribed by the National Association of Insurance Commissioners and adopted by the applicable state laws.

15.1

UnumProvident Statutory Operating Results - December 31, 2005

	Year Ended
	Net Gain from Operations After Tax
	Before Infrequent or Unusual Items		Reinsurance Recapture			California Settlement Agreement			Total		Net Realized Capital Gains (Losses) After Tax and Transfers to IMR			Net Income
Provident Life and Accident	$	138.2	$	—		$	(14.3	)	$	123.9	$	(1.0	)	$	122.9
Unum Life of America		153.0		129.7			(27.6	)		255.1		(5.9	)		249.2
Paul Revere Life		155.5		—			(11.8	)		143.7		(13.4	)		130.3
Colonial Life & Accident		89.3		—			—			89.3		10.1			99.4
Provident Life and Casualty		10.9		—			—			10.9		1.8			12.7
First Unum Life		18.5		—			—			18.5		0.2			18.7
Paul Revere Variable		8.6		—			—			8.6		—			8.6
Total	$	574.0	$	129.7		$	(53.7	)	$	650.0	$	(8.2	)	$	641.8
	Three Months Ended
	Net Gain from Operations After Tax		Net Realized Capital Gains (Losses) After Tax and Transfers to IMR			Net Income
Provident Life and Accident	$	31.5	$	(9.7	)	$	21.8
Unum Life of America		39.9		(0.3	)		39.6
Paul Revere Life		52.4		(3.1	)		49.3
Colonial Life & Accident		21.7		5.2			26.9
Provident Life and Casualty		0.8		1.6			2.4
First Unum Life		3.7		0.7			4.4
Paul Revere Variable		2.1		—			2.1
Total	$	152.1	$	(5.6	)	$	146.5

Note: Statutory results are reported in conformity with statutory accounting principles as prescribed by the National Association of Insurance Commissioners and adopted by the applicable state laws.

15.2

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

	2006 (a)			2005			2004
Reserve Balance from Prior Year End	$	5,192.8		$	5,146.1		$	4,983.5
Reserves Ceded Each January 1 for Prior Year Incurrals		—			(453.4	)		(429.0	)
Reinsurance Recapture		891.4			—			—
Other Adjustments to Beginning Balance (see Schedule H)		15.9			(5.7	)		17.6
Reserve Balance January 1 (b)		6,100.1			4,687.0			4,572.1
Paid on Prior Year Claims		(395.9	)		(356.0	)		(362.4	)
Interest Earned on Reserves		102.1			78.7			77.7
Incurred on Prior Year Claims		45.6			49.8			(16.2	)
Reserve Charges Incurred for Settlement Agreements		68.4			—			—
Reserve Balance March 31	$	5,920.3		$	4,459.5		$	4,271.2
Reserve Balance March 31	$	5,920.3		$	4,459.5		$	4,271.2
Paid on Prior Year Claims		(348.3	)		(298.7	)		(291.5	)
Interest Earned on Reserves		99.3			74.6			73.3
Incurred on Prior Year Claims		51.4			1.0			(24.0	)
Reserve Balance June 30	$	5,722.7		$	4,236.4		$	4,029.0
Reserve Balance June 30	$	5,722.7		$	4,236.4		$	4,029.0
Paid on Prior Year Claims		(350.6	)		(261.5	)		(260.7	)
Interest Earned on Reserves		97.6			71.5			69.4
Incurred on Prior Year Claims		(11.9	)		(17.1	)		(32.7	)
Reserve Charges Incurred for Settlement Agreements		246.0			13.7			—
Reserve Balance September 30	$	5,703.8		$	4,043.0		$	3,805.0
Reserve Balance September 30	$	5,703.8		$	4,043.0		$	3,805.0
Paid on Prior Year Claims		(314.5	)		(229.8	)		(223.2	)
Interest Earned on Reserves		94.5			68.9			68.9
Incurred on Prior Year Claims		2.7			0.3			(31.3	)
Reserve Charges Incurred for Settlement Agreements		—			—			71.1
Reserve Balance December 31 on Prior Year Claims		5,486.5			3,882.4			3,690.5
Reserve Balance December 31 on Current Year Claims		1,200.1			1,310.4			1,455.6
Reserve Balance December 31 on Total Claims Incurred (c)	$	6,686.6		$	5,192.8		$	5,146.1

(a) Prior period numbers for 2006 have been restated to reflect the recapture by Unum Life Insurance Company of America, retroactive to January 1, 2006, of a ceded block of group long-term income protection claims. The results also reflect the experience for claims ceded under a modified coinsurance agreement to Tailwind Reinsurance Company as the reserves for such claims are retained by Unum Life Insurance Company of America.

(b) balances to Schedule H Part 3 Line 3.2 Column 2

(c) balances to Schedule H Part 2 Line C.1 Column 2

15.3

Reconciliation to Unum Life Insurance Company of America - Statutory Basis

Schedule H Part 3 for Group Accident and Health

	2006		2005		2004
Paid on Prior Year Claims - Full Year	$	1,409.2	$	1,146.0	$	1,137.8
(balances to Schedule H Part 3 Line 1.1 Column 2)
Incurred on Prior Year Claims - Full Year	$	402.1	$	47.7	$	(33.1	)
Interest Earned on Reserves - Full Year		393.5		293.7		289.3
Incurred on Prior Year Claims - Full Year, Excluding Interest Earned	$	795.6	$	341.4	$	256.2
(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 income protection, group accidental death & dismemberment, and group voluntary income protection, cancer, and critical illness products reported in our Unum US segment as well as the reinsurance pools reported in our Other segment.

15.4

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 (loss). 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 also believe that the exclusion of certain other items specified and presented in the reconciliations on the segment financial results pages throughout this supplement enhances the understanding and comparability of our Company’s performance and the underlying fundamentals in our operations, but this exclusion is not an indication that similar items may not recur.

Segments Renamed

As a part of a broader branding initiative, we announced our intention to change our name from UnumProvident Corporation to Unum Group. While this change is pending required legal approvals, we have changed our operating segment names as a part of this branding initiative. As a result, the U.S. Brokerage segment has been renamed Unum US and the Unum Limited segment has been renamed Unum UK.

2006 Significant Transactions and Events

Disposition

On January 20, 2007, we entered into a definitive agreement for the sale of our wholly-owned subsidiary, GENEX Services, Inc. (GENEX). We expect to close the transaction during the first half of 2007, subject to customary closing conditions. We expect this transaction to result in a small net gain. The sale reflects our desire to redeploy our capital to our core businesses and allow GENEX to further build its workers’ compensation business. The results of GENEX, which were previously included in the Other segment, are now reported as discontinued operations and excluded from segment results for all periods.

Revised Claim Reassessment Reserve Estimate

Each quarter we review our emerging experience to ensure that the reserves we established for our claim reassessment process are appropriate. This claim reassessment process was implemented as a result of the settlement agreements we entered into with state insurance regulators in the fourth quarter of 2004 and the settlement agreement we entered into with the California Department of Insurance (DOI) in the third quarter of 2005. The fourth quarter of 2004 agreements were entered into on conclusion of a multistate market conduct examination led by Maine, Massachusetts, and Tennessee relating to our disability claims handling practices. The settlement agreement we entered into with the California DOI concluded a market conduct examination and investigation of our disability claims handling practices.

Our quarterly review of our claim reassessment reserve adequacy includes an analysis of our assumptions related to (1) the number of claimants who will ultimately choose to participate in the process, (2) the number of claimants for whom payments will be made and then closed because the claimant is no longer disabled, (3) the number of claimants for whom payments will continue because the claimant remains eligible for disability payments, and (4) the average incurred cost per claimant.

(continued on next page) 16

When we performed our analysis at the end of the first quarter of 2006, our analysis was based on data available as of the end of that time period. At that time we believed that the actual results were credible enough to enable us to update our estimate of the ultimate cost related to the reassessment process and the reserves established at the time of the settlement agreements. At the end of the first quarter, we concluded that a change in our initial assumptions was warranted. The change in assumptions was primarily related to the number of claimants for whom payments will continue because the claimant remains eligible for disability payments. We therefore recorded a charge, in the first quarter of 2006, of $86.0 million before tax, or $55.9 million after tax, to reflect our then current best estimate of the ultimate cost of benefits for claims reopened in the reassessment process. The first quarter charge decreased before-tax operating results for our Unum US segment group income protection line of business $72.8 million and our Individual Income Protection – Closed Block segment $13.2 million.

During our third quarter of 2006 review, we concluded that some of our assumptions needed to be modified to reflect emerging experience and that a charge should be recorded. By the end of the third quarter we had either completed the reassessment or had analyzed the pending inventory for approximately 55 percent of the total number of claims expected to be reassessed during the reassessment process. The most recent months’ experience indicated that the assumption used to estimate the number of claimants for whom payments will be made needed to be revised, as did the assumption for the average cost. That is, significantly more claims were qualifying for benefit payment, and the average cost per claimant was slightly higher than previously assumed.

Our third quarter review also indicated that we needed to adjust the amount previously recorded for the incremental direct operating expenses to conduct the reassessment process because of the additional time now estimated to complete the process. Our review indicated that no adjustment was needed for the amount previously recorded for the additional benefit costs and reserves for claims that were already incurred and in inventory that were anticipated to increase as a result of the claim process changes being implemented.

Based on our analysis, in the third quarter of 2006 we recorded an additional charge of $325.4 million before tax, or $211.5 million after tax. The charge was comprised of $310.4 million to reflect our revised estimate of future obligations for benefit costs for claims reopened in the reassessment and $15.0 million for additional incremental direct operating expenses to conduct the reassessment process. The third quarter charge decreased before-tax operating results for our Unum US segment group income protection line of business $291.4 million and our Individual Income Protection – Closed Block segment $34.0 million.

Broker Compensation Settlement

On October 31, 2006, we reached a settlement agreement on broker compensation with the Office of the New York Attorney General (NYAG) that directly resolves all issues raised by the NYAG in its review of our broker compensation practices. The review was part of a larger investigation of broker compensation practices in the insurance industry. We also resolved litigation filed by the California Insurance Commissioner against our Company and other insurers regarding disclosure practices in broker compensation. We have agreed to eliminate all contingent compensation programs for our group product lines. Additionally, we are expanding our disclosure of broker compensation programs. We had previously taken a number of steps to enhance transparency by establishing, in March 2005, disclosure policies that provided customers with a means of obtaining information about the compensation paid to their brokers. As part of the settlement, we agreed to a fine of $1.9 million, the establishment of a fund of $15.5 million to provide restitution for any customer determined to be harmed by past practices, and certain other expenses approximating $1.1 million.

Income Tax

Included in the fourth quarter 2006 operating results is income of $2.6 million before tax and approximately $3.9 million after tax attributable to the receipt of interest and tax refunds on prior year tax items in excess of what was previously provided.

Additionally, in the fourth quarter 2006 we recognized an income tax benefit of approximately $91.9 million primarily as the result of group relief benefits obtained from the use of net operating losses in a foreign jurisdiction in which our businesses operate.

(continued on next page) 16.1

Financing

In the second quarter of 2006, pursuant to a cash tender offer, we purchased $50.0 million of our outstanding 7.405% capital securities due 2038 and $250.0 million aggregate principal amount of our outstanding 7.625% notes due 2011. The cost of the cash tender offer decreased second quarter 2006 income by $17.8 million before tax, or $11.6 million after tax. In the fourth quarter of 2006, we purchased $32.0 million of our outstanding 6.850% notes due 2015 on the open market. The cost of the debt purchase decreased fourth quarter 2006 income by $2.7 million before tax, or $1.9 million after tax.

The scheduled remarketing of the senior note element of the adjustable conversion-rate equity security units (units) occurred in February 2006, as stipulated by the terms of the original offering, and we reset the interest rate on $575.0 million of senior notes due May 15, 2008 to 5.997%. We purchased $400.0 million of the senior notes in the remarketing which were subsequently retired. The associated write-off of deferred debt costs decreased first quarter 2006 income by $5.3 million before tax, or $3.4 million after tax. In May 2006, we settled the purchase contract element of the units by issuing 43.3 million shares of common stock. We received proceeds of approximately $575.0 million from the transaction.

In November 2006, Tailwind Holdings, LLC, a wholly-owned subsidiary of UnumProvident, issued $130.0 million of senior, secured notes in a private placement. Interest on the notes is variable based upon a London Interbank Offered Rate (LIBOR) plus a margin. None of UnumProvident or any other affiliate of Tailwind Holdings is an obligor or guarantor on the notes.

Accounting Principle Changes

Effective January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004) (SFAS 123(R)), Share-Based Payment. SFAS 123(R) focuses primarily on accounting for transactions in which an entity obtains employee service in exchange for share-based payments. The adoption of SFAS 123(R) did not have a material effect on our financial position or results of operations.

Effective December 31, 2006, we adopted the provisions of Statement of Financial Accounting Standards No. 158 (SFAS 158), Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit pension and other postretirement plans as an asset or liability in its balance sheet and to recognize changes in that funded status through comprehensive income. Also, under SFAS 158, defined benefit pension and other postretirement plan assets and obligations are to be measured as of the date of the employer’s fiscal year-end. The adoption of SFAS 158, which resulted in an $84.1 million decrease in accumulated other comprehensive income in stockholders’ equity, had no effect on our results of operations.

2005 Significant Transactions and Events

California Settlement Agreement and Amendment of the Multistate Market Conduct Examination Settlement Agreements

In the third quarter of 2005, certain of our U.S. insurance subsidiaries entered into a settlement agreement with the California DOI, concluding a market conduct examination and investigation of the subsidiaries’ disability claims handling practices. The California DOI had chosen not to join the 2004 multistate settlement agreements. As part of the settlement with the California DOI, we paid a civil penalty of $8.0 million and agreed to change certain practices and policy provisions related to our California business. The settlement also incorporates claims handling practices previously covered by the multistate settlement agreements and includes certain additional claim handling changes.

(continued on next page) 16.2

Based on the settlement agreement and related matters, in the third quarter of 2005 we recorded a charge of $75.0 million before tax, or $51.6 million after tax, comprised of four elements: $14.3 million of incremental direct operating expenses to conduct the reassessment process; $37.3 million for benefit costs and reserves from claims reopened from the reassessment; $15.4 million for additional benefit costs and reserves for claims already incurred and currently in inventory that are anticipated as a result of the claim process changes being implemented; and the $8.0 million civil penalty. The charge decreased before-tax operating results for the Unum US segment group income protection line of business and supplemental and voluntary lines of business $37.4 million and $3.3 million, respectively, and the Individual Income Protection – Closed Block segment $34.3 million.

Income Tax

In the third quarter of 2005, we recognized an income tax benefit of approximately $10.8 million related to the finalization of income tax reviews of our U.K. subsidiaries.

During the first quarter of 2005, the Internal Revenue Service completed its examination of tax years 1999 through 2001 and issued its revenue agent’s report (RAR) in April 2005. Income tax liabilities of approximately $32.0 million that related primarily to interest on the timing of expense deductions were released in the first quarter of 2005, all of which was reflected as a reduction to income tax expense.

Disposition

During the third quarter of 2005, our wholly-owned subsidiary, Unum Limited, completed the sale of its Netherlands branch. The gain on the sale was approximately $5.7 million before tax and $4.0 million after tax.

Financing

During 2005, we repaid $227.0 million of maturing debt. In November 2005, we completed a long-term debt offering, issuing $400.0 million of 6.85% senior notes due November 15, 2015.

Closed Block Reinsurance Recapture

During the third quarter of 2005, we recaptured a closed block of individual income protection business originally ceded to Centre Life Reinsurance Ltd. in 1996. The recaptured business included approximately $1.6 billion in invested assets and $185.0 million of annual premium. The effective date of the recapture was August 8, 2005. The underlying operating results of the reinsurance contract, prior to recapture, were reflected in other income. The recapture therefore did not have a material impact on operating income for our Individual Income Protection – Closed Block segment.

(continued on next page) 16.3

2004 Significant Transactions and Events

Settlement of Multistate Market Conduct Examination

During 2004, certain of our U.S. insurance subsidiaries entered into settlement agreements with state insurance regulators upon conclusion of a multistate market conduct examination led by Maine, Massachusetts, and Tennessee relating to our disability claims handling practices. A total of 48 states and the District of Columbia are parties to the settlement agreements. In addition, the U.S. Department of Labor, which had been conducting an inquiry relating to certain ERISA plans, is a party to the settlement agreements, and the NYAG, which had engaged in its own investigation of our claims handling practices, notified us that it was in support of the settlement and was, therefore, closing its investigation on this issue. The examination report did not make any findings of violations of law or market conduct regulations. However, the examination report did identify areas of concern. These became the focus of specific changes and enhancements to our disability claims handling operations which are designed to assure each claim decision is made in a consistently high quality manner.

The primary components of the settlement agreements include enhancements to our claims handling procedures; a reassessment process for claimants of certain previously denied or closed claims who elect to participate; additional corporate and board governance to support the oversight of the reassessment process and general claims handling practices; and payment of a fine in the amount of $15.0 million that was allocated among the states and jurisdictions that joined the agreements and a potential fine of $145.0 million in the future if certain standards are not met in examinations at the end of approximately two years.

In the fourth quarter of 2004, we recorded a charge of $127.0 million before tax, or $87.8 million after tax, comprised of four elements: $27.5 million of incremental direct operating expenses to conduct the two-year reassessment process; $44.0 million for benefit costs and reserves from claims reopened from the reassessment; $40.5 million for additional benefit costs and reserves for claims already incurred and currently in inventory that are anticipated as a result of the claim process changes being implemented; and the $15.0 million fine. The charge decreased before-tax operating results for the Unum US segment group income protection and individual income protection – recently issued lines of business $116.7 million and $1.7 million, respectively, and the Individual Income Protection – Closed Block segment $8.6 million.

Disposition

During the second quarter of 2004, we closed the sale of our Canadian operations. Financial results for the Canadian branch are reported as discontinued operations. The loss recognized during 2004 was $60.8 million after tax.

Restructuring of Individual Income Protection – Closed Block Business

In the first quarter of 2004, we restructured our individual income protection – closed block business and entered into reinsurance agreements which effectively provide approximately 60 percent reinsurance coverage for our overall consolidated risk above a specified retention limit. We have not yet reached the retention limit and do not currently anticipate that once reached, our losses would exceed the maximum risk limit for the reinsurer and revert back to us. The reinsurance receivable for this contract, as reported in our consolidated statements of financial condition, was approximately $599.6 million at December 31, 2006.

In conjunction with the restructuring of the individual income protection – closed block business, effective January 1, 2004, we modified our reporting segments to include a separate segment for this business. The reporting, monitoring, and management of the closed block of individual income protection business as a discrete segment is consistent with our financial restructuring and separation of this business from the lines of business which actively market new products. In the past, this business had been reported in combination with the individual income protection – recently issued line of business. Prior to 2004, detailed separate financial metrics and models were unavailable to appropriately manage this block of business separately from the recently issued individual income protection block of business.

(continued on next page) 16.4

The separation of the closed block business into a separate reporting segment required us to perform, separately for the individual income protection – closed block business and individual income protection – recently issued business, impairment testing for goodwill and loss recognition testing for the recoverability of deferred policy acquisition costs and value of business acquired. As required under GAAP, prior to the change in reporting segments, these tests were performed for the individual income protection line of business on a combined basis. The testing indicated impairment of the individual income protection – closed block deferred policy acquisition costs, value of business acquired, and goodwill balances of $282.2 million, $367.1 million, and $207.1 million, respectively. These impairment charges, $856.4 million before tax and $629.1 million after tax, were recorded in the first quarter of 2004.

Also as part of the restructuring, we analyzed our reserve assumptions related to our individual income protection – closed block reserves as a stand-alone segment. Previously these reserves were analyzed for the individual income protection line of business on a combined basis. Included in the analysis was a review of morbidity assumptions, primarily claim resolution rates, and claim reserve discount rate assumptions. Based upon this analysis, we lowered the claim reserve discount rate to reflect the segmentation of the investment portfolio between the individual income protection – recently issued business and the individual income protection – closed block business, the duration of the assets and the related policy liabilities. Based on this analysis, in the first quarter of 2004 we increased our individual income protection – closed block claim reserves by $110.6 million before tax, or $71.9 million after tax, to reflect our current estimate of future benefit obligations.

16.5