Unum Group
Statistical Supplement First Quarter 2014
TABLE OF CONTENTS
(dollars in millions, except share data and where noted)
Interim Results are Unaudited
| Page | |||
| See "Appendix to Statistical Supplement" on page 16 for a summary of significant items and a reconciliation of our non-GAAP financial measures. | |||
| N.M. = not a meaningful percentage | |||
Unum Group Financial Highlights
| Three Months Ended | Year Ended | ||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||
| Consolidated U.S. GAAP Results¹ | |||||||
| Premium Income | $ | 1,938.5 | $ | 1,930.9 | $ | 7,624.7 | $ | 7,716.1 | |||||||
| Operating Revenue | $ | 2,604.8 | $ | 2,614.5 | $ | 10,347.0 | $ | 10,459.2 | |||||||
| Net Realized Investment Gain | 6.3 | 10.3 | 6.8 | 56.2 | |||||||||||
| Revenue | $ | 2,611.1 | $ | 2,624.8 | $ | 10,353.8 | $ | 10,515.4 | |||||||
| Net Income | $ | 228.9 | $ | 212.6 | $ | 858.1 | $ | 894.4 | |||||||
| Net Income Per Share: | |||||||||||||||
| Basic | $ | 0.88 | $ | 0.79 | $ | 3.24 | $ | 3.18 | |||||||
| Assuming Dilution | $ | 0.88 | $ | 0.79 | $ | 3.23 | $ | 3.17 | |||||||
| Operating Return on Equity | |||||||||||||||
| Unum US | 13.4 | % | 13.3 | % | 13.6 | % | 13.8 | % | |||||||
| Unum UK | 18.1 | % | 13.1 | % | 14.0 | % | 12.2 | % | |||||||
| Colonial Life | 18.1 | % | 17.8 | % | 16.5 | % | 16.8 | % | |||||||
| Core Operating Segments | 14.8 | % | 14.1 | % | 14.2 | % | 14.1 | % | |||||||
| Consolidated | 11.0 | % | 11.7 | % | 11.4 | % | 12.3 | % | |||||||
| Assets | $ | 61,078.6 | $ | 61,611.4 | $ | 59,403.6 | $ | 62,236.1 | |||||||
| Stockholders' Equity | $ | 8,955.7 | $ | 8,557.8 | $ | 8,659.1 | $ | 8,612.6 | |||||||
| Traditional U.S. Life Insurance Companies' Statutory Results² | |||||||||||||||
| After-tax Operating Income | $ | 130.1 | $ | 193.8 | $ | 679.6 | $ | 649.8 | |||||||
| Unclaimed Death Benefits Reserve Increase, After Tax | — | — | (62.1 | ) | — | ||||||||||
| Net Gain from Operations, After Tax | 130.1 | 193.8 | 617.5 | 649.8 | |||||||||||
| Net Realized Gain (Loss), After Tax | 2.8 | (13.3 | ) | (33.0 | ) | (25.3 | ) | ||||||||
| Net Income | $ | 132.9 | $ | 180.5 | $ | 584.5 | $ | 624.5 | |||||||
| Capital and Surplus | $ | 3,446.1 | $ | 3,446.5 | $ | 3,450.5 | $ | 3,426.5 | |||||||
| Weighted Average Risk-based Capital Ratio | 400 | % | 396 | % | 405 | % | 396 | % | |||||||
1 Generally Accepted Accounting Principles
2 Our traditional U.S. life insurance companies are Provident Life and Accident Insurance Company, Unum Life Insurance Company of America, The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company, Provident Life and Casualty Insurance Company, First Unum Life Insurance Company, and The Paul Revere Variable Annuity Insurance Company.
1
Unum Group Capital Metrics
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||||||||||||||||||
| (in millions) | per share | (in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||||||||
| Book Value | |||||||||||||||||||||||||||||||
| Total Stockholders' Equity, As Reported | $ | 8,955.7 | $ | 34.77 | $ | 8,557.8 | $ | 32.06 | $ | 8,659.1 | $ | 33.30 | $ | 8,612.6 | $ | 31.87 | |||||||||||||||
| Net Unrealized Gain on Securities | 325.3 | 1.26 | 792.4 | 2.97 | 135.7 | 0.52 | 873.5 | 3.23 | |||||||||||||||||||||||
| Net Gain on Cash Flow Hedges | 398.0 | 1.55 | 399.6 | 1.50 | 396.3 | 1.52 | 401.6 | 1.48 | |||||||||||||||||||||||
| Subtotal | 8,232.4 | 31.96 | 7,365.8 | 27.59 | 8,127.1 | 31.26 | 7,337.5 | 27.16 | |||||||||||||||||||||||
| Foreign Currency Translation Adjustment | (39.5 | ) | (0.16 | ) | (142.5 | ) | (0.53 | ) | (47.1 | ) | (0.18 | ) | (72.6 | ) | (0.26 | ) | |||||||||||||||
| Subtotal | 8,271.9 | 32.12 | 7,508.3 | 28.12 | 8,174.2 | 31.44 | 7,410.1 | 27.42 | |||||||||||||||||||||||
| Unrecognized Pension and Postretirement Benefit Costs | (229.4 | ) | (0.89 | ) | (563.8 | ) | (2.12 | ) | (229.9 | ) | (0.88 | ) | (574.5 | ) | (2.13 | ) | |||||||||||||||
| Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (AOCI) | $ | 8,501.3 | $ | 33.01 | $ | 8,072.1 | $ | 30.24 | $ | 8,404.1 | $ | 32.32 | $ | 7,984.6 | $ | 29.55 | |||||||||||||||
| Dividends Paid | $ | 38.3 | $ | 0.145 | $ | 35.7 | $ | 0.130 | $ | 146.5 | $ | 0.550 | $ | 133.8 | $ | 0.470 | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Shares Repurchased (millions) | 2.9 | 3.7 | 11.2 | 23.6 | |||||||||||
Cost of Shares Repurchased (millions)(1) | $ | 100.1 | $ | 95.1 | $ | 318.6 | $ | 500.6 | |||||||
| Price (UNM closing price on last trading day of period) | $ | 35.31 | $ | 28.25 | $ | 35.08 | $ | 20.82 | |||||||
| Leverage Ratio | 25.5 | % | 25.1 | % | 23.0 | % | 25.3 | % | |||||||
| Holding Company Cash and Marketable Securities | $ | 822 | $ | 652 | $ | 514 | $ | 805 | |||||||
(1) Includes commissions of $0.2 million and $0.6 million for the years ended December 31, 2013 and 2012, respectively, and de minimis commissions for the three months ended March 31, 2014 and 2013, respectively.
2
Unum Group Ratings
| AM Best | Fitch | Moody's | S&P | ||||
| Issuer Credit Ratings | bbb (Good) | BBB (Good) | Baa2 (Adequate) | BBB (Adequate) | |||
| Financial Strength Ratings | |||||||
| Provident Life and Accident | A (Excellent) | A (Strong) | A2 (Good) | A (Strong) | |||
| Unum Life of America | A (Excellent) | A (Strong) | A2 (Good) | A (Strong) | |||
| Colonial Life & Accident | A (Excellent) | A (Strong) | A2 (Good) | A (Strong) | |||
| Paul Revere Life | A (Excellent) | A (Strong) | A2 (Good) | A (Strong) | |||
| Unum Limited | Not Rated | Not Rated | Not Rated | A- (Strong) | |||
3
Unum Group Consolidated Statements of Income
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Revenue | |||||||||||||||
| Premium Income | $ | 1,938.5 | $ | 1,930.9 | $ | 7,624.7 | $ | 7,716.1 | |||||||
| Net Investment Income | 612.5 | 621.1 | 2,492.1 | 2,515.2 | |||||||||||
| Net Realized Investment Gain | 6.3 | 10.3 | 6.8 | 56.2 | |||||||||||
| Other Income | 53.8 | 62.5 | 230.2 | 227.9 | |||||||||||
| Total Revenue | 2,611.1 | 2,624.8 | 10,353.8 | 10,515.4 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 1,631.3 | 1,648.5 | 6,595.7 | 6,722.2 | |||||||||||
| Commissions | 236.0 | 238.2 | 909.5 | 917.2 | |||||||||||
| Interest and Debt Expense - Non-recourse Debt | 1.9 | 2.3 | 8.5 | 11.5 | |||||||||||
| Interest and Debt Expense - All Other Debt | 36.0 | 34.8 | 140.9 | 133.9 | |||||||||||
| Deferral of Acquisition Costs | (129.0 | ) | (118.2 | ) | (466.8 | ) | (467.3 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 118.6 | 123.8 | 418.9 | 378.7 | |||||||||||
| Other Expenses | 389.8 | 391.6 | 1,541.9 | 1,569.7 | |||||||||||
| Total Benefits and Expenses | 2,284.6 | 2,321.0 | 9,148.6 | 9,265.9 | |||||||||||
| Income Before Income Tax | 326.5 | 303.8 | 1,205.2 | 1,249.5 | |||||||||||
| Income Tax Expense | 97.6 | 91.2 | 347.1 | 355.1 | |||||||||||
| Net Income | $ | 228.9 | $ | 212.6 | $ | 858.1 | $ | 894.4 | |||||||
| Average Weighted Shares Outstanding | |||||||||||||||
| Basic | 259.4 | 269.4 | 264.7 | 281.4 | |||||||||||
| Assuming Dilution | 260.7 | 270.4 | 265.9 | 281.8 | |||||||||||
| Actual Number of Shares Outstanding | 257.6 | 267.0 | 260.0 | 270.2 | |||||||||||
4
Unum Group Sales Data for Unum US Segment
| Three Months Ended | Year Ended | |||||||||||||||||
| 3/31/2014 | 3/31/2013 | % Change | 12/31/2013 | 12/31/2012 | ||||||||||||||
| Sales by Product | ||||||||||||||||||
| Group Disability and Group Life and AD&D | ||||||||||||||||||
| Group Long-term Disability | $ | 32.7 | $ | 31.1 | 5.1 | % | $ | 173.3 | $ | 182.2 | ||||||||
| Group Short-term Disability | 19.8 | 15.8 | 25.3 | 101.9 | 97.4 | |||||||||||||
| Group Life and AD&D | 41.3 | 36.8 | 12.2 | 199.4 | 207.5 | |||||||||||||
| Subtotal | 93.8 | 83.7 | 12.1 | 474.6 | 487.1 | |||||||||||||
| Supplemental and Voluntary | ||||||||||||||||||
| Individual Disability - Recently Issued | 14.6 | 15.2 | (3.9 | ) | 52.2 | 57.0 | ||||||||||||
| Voluntary Benefits | 103.3 | 98.6 | 4.8 | 218.8 | 216.4 | |||||||||||||
| Subtotal | 117.9 | 113.8 | 3.6 | 271.0 | 273.4 | |||||||||||||
| Total Sales | $ | 211.7 | $ | 197.5 | 7.2 | $ | 745.6 | $ | 760.5 | |||||||||
| Sales by Market Sector | ||||||||||||||||||
| Group Disability and Group Life and AD&D | ||||||||||||||||||
| Core Market (< 2,000 lives) | $ | 60.0 | $ | 51.5 | 16.5 | % | $ | 324.4 | $ | 334.9 | ||||||||
| Large Case Market | 33.8 | 32.2 | 5.0 | 150.2 | 152.2 | |||||||||||||
| Subtotal | 93.8 | 83.7 | 12.1 | 474.6 | 487.1 | |||||||||||||
| Supplemental and Voluntary | 117.9 | 113.8 | 3.6 | 271.0 | 273.4 | |||||||||||||
| Total Sales | $ | 211.7 | $ | 197.5 | 7.2 | $ | 745.6 | $ | 760.5 | |||||||||
5
Unum Group Sales Data for Unum UK Segment
| Three Months Ended | Year Ended | |||||||||||||||||
| (in millions of dollars) | 3/31/2014 | 3/31/2013 | % Change | 12/31/2013 | 12/31/2012 | |||||||||||||
| Sales by Product | ||||||||||||||||||
| Group Long-term Disability | $ | 12.3 | $ | 10.9 | 12.8 | % | $ | 50.5 | $ | 51.2 | ||||||||
| Group Life | 4.0 | 4.5 | (11.1 | ) | 21.4 | 38.0 | ||||||||||||
| Supplemental | 1.0 | 1.0 | — | 3.9 | 4.9 | |||||||||||||
| Total Sales | $ | 17.3 | $ | 16.4 | 5.5 | $ | 75.8 | $ | 94.1 | |||||||||
| Sales by Market Sector | ||||||||||||||||||
| Group Long-term Disability and Group Life | ||||||||||||||||||
| Core Market (< 500 lives) | $ | 7.6 | $ | 8.5 | (10.6 | )% | $ | 38.9 | $ | 38.7 | ||||||||
| Large Case Market | 8.7 | 6.9 | 26.1 | 33.0 | 50.5 | |||||||||||||
| Subtotal | 16.3 | 15.4 | 5.8 | 71.9 | 89.2 | |||||||||||||
| Supplemental | 1.0 | 1.0 | — | 3.9 | 4.9 | |||||||||||||
| Total Sales | $ | 17.3 | $ | 16.4 | 5.5 | $ | 75.8 | $ | 94.1 | |||||||||
| (in millions of pounds) | ||||||||||||||||||
| Sales by Product | ||||||||||||||||||
| Group Long-term Disability | £ | 7.4 | £ | 7.0 | 5.7 | % | £ | 32.2 | £ | 32.3 | ||||||||
| Group Life | 2.4 | 2.9 | (17.2 | ) | 13.7 | 24.1 | ||||||||||||
| Supplemental | 0.6 | 0.6 | — | 2.5 | 3.1 | |||||||||||||
| Total Sales | £ | 10.4 | £ | 10.5 | (1.0 | ) | £ | 48.4 | £ | 59.5 | ||||||||
| Sales by Market Sector | ||||||||||||||||||
| Group Long-term Disability and Group Life | ||||||||||||||||||
| Core Market (< 500 lives) | £ | 4.5 | £ | 5.5 | (18.2 | )% | £ | 24.9 | £ | 24.4 | ||||||||
| Large Case Market | 5.3 | 4.4 | 20.5 | 21.0 | 32.0 | |||||||||||||
| Subtotal | 9.8 | 9.9 | (1.0 | ) | 45.9 | 56.4 | ||||||||||||
| Supplemental | 0.6 | 0.6 | — | 2.5 | 3.1 | |||||||||||||
| Total Sales | £ | 10.4 | £ | 10.5 | (1.0 | ) | £ | 48.4 | £ | 59.5 | ||||||||
5. 1
Unum Group Sales Data for Colonial Life Segment
| Three Months Ended | Year Ended | |||||||||||||||||
| 3/31/2014 | 3/31/2013 | % Change | 12/31/2013 | 12/31/2012 | ||||||||||||||
| Sales by Product | ||||||||||||||||||
| Accident, Sickness, and Disability | $ | 46.7 | $ | 43.9 | 6.4 | % | $ | 238.2 | $ | 233.0 | ||||||||
| Life | 14.2 | 13.5 | 5.2 | 68.1 | 67.3 | |||||||||||||
| Cancer and Critical Illness | 11.1 | 10.2 | 8.8 | 61.3 | 61.6 | |||||||||||||
| Total Sales | $ | 72.0 | $ | 67.6 | 6.5 | $ | 367.6 | $ | 361.9 | |||||||||
| Sales by Market Sector | ||||||||||||||||||
| Commercial | ||||||||||||||||||
| Core Market (< 1,000 lives) | $ | 51.7 | $ | 50.8 | 1.8 | % | $ | 246.0 | $ | 248.3 | ||||||||
| Large Case Market | 9.7 | 5.7 | 70.2 | 49.0 | 40.9 | |||||||||||||
| Subtotal | 61.4 | 56.5 | 8.7 | 295.0 | 289.2 | |||||||||||||
| Public Sector | 10.6 | 11.1 | (4.5 | ) | 72.6 | 72.7 | ||||||||||||
| Total Sales | $ | 72.0 | $ | 67.6 | 6.5 | $ | 367.6 | $ | 361.9 | |||||||||
5. 2
Unum Group Consolidated Balance Sheets
| March 31 | December 31 | ||||||
| 2014 | 2013 | ||||||
| Assets | |||||||
| Investments | |||||||
| Fixed Maturity Securities | $ | 43,666.8 | $ | 42,344.4 | |||
| Mortgage Loans | 1,843.3 | 1,815.1 | |||||
| Policy Loans | 3,268.3 | 3,276.0 | |||||
| Other Long-term Investments | 565.0 | 566.0 | |||||
| Short-term Investments | 1,189.5 | 913.4 | |||||
| Total Investments | 50,532.9 | 48,914.9 | |||||
| Other Assets | |||||||
| Cash and Bank Deposits | 76.2 | 94.1 | |||||
| Accounts and Premiums Receivable | 1,664.4 | 1,647.8 | |||||
| Reinsurance Recoverable | 4,837.6 | 4,806.5 | |||||
| Accrued Investment Income | 756.3 | 700.2 | |||||
| Deferred Acquisition Costs | 1,832.3 | 1,829.2 | |||||
| Goodwill | 201.0 | 200.9 | |||||
| Property and Equipment | 519.4 | 511.9 | |||||
| Income Tax Receivable | — | 50.3 | |||||
| Other Assets | 658.5 | 647.8 | |||||
| Total Assets | $ | 61,078.6 | $ | 59,403.6 | |||
| Liabilities | |||||||
| Policy and Contract Benefits | $ | 1,569.2 | $ | 1,511.0 | |||
| Reserves for Future Policy and Contract Benefits | 43,932.5 | 43,099.1 | |||||
| Unearned Premiums | 472.2 | 413.8 | |||||
| Other Policyholders’ Funds | 1,672.2 | 1,658.4 | |||||
| Income Tax Payable | 17.3 | — | |||||
| Deferred Income Tax | 312.6 | 144.3 | |||||
| Short-term Debt | 61.6 | 76.5 | |||||
| Long-term Debt - Non-recourse | 425.0 | 440.0 | |||||
| Long-term Debt - All Other | 2,523.2 | 2,172.0 | |||||
| Other Liabilities | 1,137.1 | 1,229.4 | |||||
| Total Liabilities | 52,122.9 | 50,744.5 | |||||
| Stockholders’ Equity | |||||||
| Common Stock | 36.1 | 36.1 | |||||
| Additional Paid-in Capital | 2,640.8 | 2,634.1 | |||||
| Accumulated Other Comprehensive Income | 454.4 | 255.0 | |||||
| Retained Earnings | 8,273.8 | 8,083.2 | |||||
| Treasury Stock | (2,449.4 | ) | (2,349.3 | ) | |||
| Total Stockholders’ Equity | 8,955.7 | 8,659.1 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 61,078.6 | $ | 59,403.6 | |||
6
Unum Group Deferred Acquisition Costs by Segment
| Unum US | Unum UK | Colonial Life | Consolidated | ||||||||||||
| Balances at December 31, 2012 | 1,024.3 | 38.8 | 692.4 | 1,755.5 | |||||||||||
| Capitalized | 252.0 | 9.8 | 205.0 | 466.8 | |||||||||||
| Amortized | (230.0 | ) | (14.7 | ) | (174.2 | ) | (418.9 | ) | |||||||
| Adjustment Related to Unrealized Investment Gains | 5.2 | — | 20.2 | 25.4 | |||||||||||
| Foreign Currency | — | 0.4 | — | 0.4 | |||||||||||
| Balances at December 31, 2013 | 1,051.5 | 34.3 | 743.4 | 1,829.2 | |||||||||||
| Capitalized | 74.3 | 2.2 | 52.5 | 129.0 | |||||||||||
| Amortized | (70.9 | ) | (3.2 | ) | (44.5 | ) | (118.6 | ) | |||||||
| Adjustment Related to Unrealized Investment Losses | (0.6 | ) | — | (6.7 | ) | (7.3 | ) | ||||||||
| Balances at March 31, 2014 | $ | 1,054.3 | $ | 33.3 | $ | 744.7 | $ | 1,832.3 | |||||||
6. 1
Unum Group Balance Sheets by Segment - March 31, 2014
| Unum US | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Investments | $ | 9,261.5 | $ | 2,518.3 | $ | 4,091.0 | $ | 15,870.8 | $ | 3,476.8 | $ | 2,566.9 | $ | 26,282.5 | $ | 2,335.9 | $ | 50,532.9 | |||||||||||||||||
| Deferred Acquisition Costs | 59.3 | 51.8 | 943.2 | 1,054.3 | 33.3 | 744.7 | — | — | 1,832.3 | ||||||||||||||||||||||||||
| Goodwill | 1.5 | — | 187.5 | 189.0 | 12.0 | — | — | — | 201.0 | ||||||||||||||||||||||||||
| All Other | 687.6 | 219.6 | 496.6 | 1,403.8 | 271.3 | 230.9 | 6,114.8 | 491.6 | 8,512.4 | ||||||||||||||||||||||||||
| Total Assets | $ | 10,009.9 | $ | 2,789.7 | $ | 5,718.3 | $ | 18,517.9 | $ | 3,793.4 | $ | 3,542.5 | $ | 32,397.3 | $ | 2,827.5 | $ | 61,078.6 | |||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Reserves and Policyholder Benefits | $ | 8,239.9 | $ | 1,703.0 | $ | 3,600.4 | $ | 13,543.3 | $ | 3,021.6 | $ | 2,076.8 | $ | 29,004.4 | $ | — | $ | 47,646.1 | |||||||||||||||||
| Debt | 2.5 | — | — | 2.5 | — | — | 435.5 | 2,571.8 | 3,009.8 | ||||||||||||||||||||||||||
| All Other | 284.2 | 81.6 | 352.5 | 718.3 | 67.3 | 230.1 | (58.0 | ) | 509.3 | 1,467.0 | |||||||||||||||||||||||||
| Total Liabilities | 8,526.6 | 1,784.6 | 3,952.9 | 14,264.1 | 3,088.9 | 2,306.9 | 29,381.9 | 3,081.1 | 52,122.9 | ||||||||||||||||||||||||||
| Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Other Allocated Stockholders' Equity | 1,484.0 | 967.6 | 1,644.0 | 4,095.6 | 669.7 | 1,141.3 | 2,730.1 | (404.3 | ) | 8,232.4 | |||||||||||||||||||||||||
| Net Unrealized Gain/Loss on Securities and Net Gain on Cash Flow Hedges | (0.7 | ) | 37.5 | 121.4 | 158.2 | 34.8 | 94.3 | 285.3 | 150.7 | 723.3 | |||||||||||||||||||||||||
| Total Allocated Stockholders' Equity | 1,483.3 | 1,005.1 | 1,765.4 | 4,253.8 | 704.5 | 1,235.6 | 3,015.4 | (253.6 | ) | 8,955.7 | |||||||||||||||||||||||||
| Total Liabilities and Allocated Stockholders' Equity | $ | 10,009.9 | $ | 2,789.7 | $ | 5,718.3 | $ | 18,517.9 | $ | 3,793.4 | $ | 3,542.5 | $ | 32,397.3 | $ | 2,827.5 | $ | 61,078.6 | |||||||||||||||||
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.
6. 2
Unum Group Balance Sheets by Segment - December 31, 2013
| Unum US | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Investments | $ | 9,485.0 | $ | 2,478.2 | $ | 4,005.7 | $ | 15,968.9 | $ | 3,413.1 | $ | 2,487.6 | $ | 25,498.0 | $ | 1,547.3 | $ | 48,914.9 | |||||||||||||||||
| Deferred Acquisition Costs | 55.9 | 49.9 | 945.7 | 1,051.5 | 34.3 | 743.4 | — | — | 1,829.2 | ||||||||||||||||||||||||||
| Goodwill | 1.5 | — | 187.5 | 189.0 | 11.9 | — | — | — | 200.9 | ||||||||||||||||||||||||||
| All Other | 509.7 | 204.5 | 460.7 | 1,174.9 | 194.8 | 251.9 | 6,066.2 | 770.8 | 8,458.6 | ||||||||||||||||||||||||||
| Total Assets | $ | 10,052.1 | $ | 2,732.6 | $ | 5,599.6 | $ | 18,384.3 | $ | 3,654.1 | $ | 3,482.9 | $ | 31,564.2 | $ | 2,318.1 | $ | 59,403.6 | |||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Reserves and Policyholder Benefits | $ | 8,208.9 | $ | 1,689.3 | $ | 3,514.0 | $ | 13,412.2 | $ | 2,940.7 | $ | 2,046.9 | $ | 28,282.5 | $ | — | $ | 46,682.3 | |||||||||||||||||
| Debt | 4.7 | — | — | 4.7 | — | — | 455.1 | 2,228.7 | 2,688.5 | ||||||||||||||||||||||||||
| All Other | 275.4 | 65.2 | 339.3 | 679.9 | 66.9 | 213.2 | (87.9 | ) | 501.6 | 1,373.7 | |||||||||||||||||||||||||
| Total Liabilities | 8,489.0 | 1,754.5 | 3,853.3 | 14,096.8 | 3,007.6 | 2,260.1 | 28,649.7 | 2,730.3 | 50,744.5 | ||||||||||||||||||||||||||
| Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Other Allocated Stockholders' Equity | 1,564.3 | 952.1 | 1,651.9 | 4,168.3 | 622.2 | 1,147.4 | 2,698.2 | (509.0 | ) | 8,127.1 | |||||||||||||||||||||||||
| Net Unrealized Gain/Loss on Securities and Net Gain on Cash Flow Hedges | (1.2 | ) | 26.0 | 94.4 | 119.2 | 24.3 | 75.4 | 216.3 | 96.8 | 532.0 | |||||||||||||||||||||||||
| Total Allocated Stockholders' Equity | 1,563.1 | 978.1 | 1,746.3 | 4,287.5 | 646.5 | 1,222.8 | 2,914.5 | (412.2 | ) | 8,659.1 | |||||||||||||||||||||||||
| Total Liabilities and Allocated Stockholders' Equity | $ | 10,052.1 | $ | 2,732.6 | $ | 5,599.6 | $ | 18,384.3 | $ | 3,654.1 | $ | 3,482.9 | $ | 31,564.2 | $ | 2,318.1 | $ | 59,403.6 | |||||||||||||||||
6. 3
Unum Group Financial Results by Segment
| Three Months Ended | Year Ended | ||||||||||||||||||||
| 3/31/2014 | 3/31/2013 | % Change | 12/31/2013 | 12/31/2012 | % Change | ||||||||||||||||
| Premium Income | |||||||||||||||||||||
| Unum US | $ | 1,152.5 | $ | 1,139.7 | 1.1 | % | $ | 4,517.1 | $ | 4,456.5 | 1.4 | % | |||||||||
| Unum UK | 151.7 | 143.8 | 5.5 | 556.6 | 694.6 | (19.9 | ) | ||||||||||||||
| Colonial Life | 316.4 | 307.1 | 3.0 | 1,232.2 | 1,194.5 | 3.2 | |||||||||||||||
| Closed Block | 317.9 | 340.3 | (6.6 | ) | 1,318.8 | 1,370.5 | (3.8 | ) | |||||||||||||
| 1,938.5 | 1,930.9 | 0.4 | 7,624.7 | 7,716.1 | (1.2 | ) | |||||||||||||||
| Net Investment Income | |||||||||||||||||||||
| Unum US | 226.4 | 235.7 | (3.9 | ) | 929.6 | 952.3 | (2.4 | ) | |||||||||||||
| Unum UK | 33.6 | 30.8 | 9.1 | 148.5 | 170.8 | (13.1 | ) | ||||||||||||||
| Colonial Life | 36.9 | 39.7 | (7.1 | ) | 145.4 | 138.6 | 4.9 | ||||||||||||||
| Closed Block | 316.3 | 313.1 | 1.0 | 1,272.3 | 1,230.5 | 3.4 | |||||||||||||||
| Corporate | (0.7 | ) | 1.8 | (138.9 | ) | (3.7 | ) | 23.0 | (116.1 | ) | |||||||||||
| 612.5 | 621.1 | (1.4 | ) | 2,492.1 | 2,515.2 | (0.9 | ) | ||||||||||||||
| Other Income | |||||||||||||||||||||
| Unum US | 30.9 | 36.7 | (15.8 | ) | 128.3 | 124.6 | 3.0 | ||||||||||||||
| Unum UK | (0.1 | ) | 0.1 | N.M. | 0.1 | 0.1 | — | ||||||||||||||
| Colonial Life | (0.1 | ) | — | (100.0 | ) | 0.2 | 0.3 | (33.3 | ) | ||||||||||||
| Closed Block | 21.6 | 24.1 | (10.4 | ) | 93.9 | 100.1 | (6.2 | ) | |||||||||||||
| Corporate | 1.5 | 1.6 | (6.3 | ) | 7.7 | 2.8 | 175.0 | ||||||||||||||
| 53.8 | 62.5 | (13.9 | ) | 230.2 | 227.9 | 1.0 | |||||||||||||||
| Total Operating Revenue | |||||||||||||||||||||
| Unum US | 1,409.8 | 1,412.1 | (0.2 | ) | 5,575.0 | 5,533.4 | 0.8 | ||||||||||||||
| Unum UK | 185.2 | 174.7 | 6.0 | 705.2 | 865.5 | (18.5 | ) | ||||||||||||||
| Colonial Life | 353.2 | 346.8 | 1.8 | 1,377.8 | 1,333.4 | 3.3 | |||||||||||||||
| Closed Block | 655.8 | 677.5 | (3.2 | ) | 2,685.0 | 2,701.1 | (0.6 | ) | |||||||||||||
| Corporate | 0.8 | 3.4 | (76.5 | ) | 4.0 | 25.8 | (84.5 | ) | |||||||||||||
| $ | 2,604.8 | $ | 2,614.5 | (0.4 | ) | $ | 10,347.0 | $ | 10,459.2 | (1.1 | ) | ||||||||||
7
Unum Group Financial Results by Segment - Continued
| Three Months Ended | Year Ended | ||||||||||||||||||||
| 3/31/2014 | 3/31/2013 | % Change | 12/31/2013 | 12/31/2012 | % Change | ||||||||||||||||
| Benefits and Expenses | |||||||||||||||||||||
| Unum US | $ | 1,199.0 | $ | 1,204.0 | (0.4 | )% | $ | 4,706.4 | $ | 4,686.3 | 0.4 | % | |||||||||
| Unum UK | 148.7 | 143.4 | 3.7 | 573.2 | 734.2 | (21.9 | ) | ||||||||||||||
| Colonial Life | 273.8 | 271.4 | 0.9 | 1,113.0 | 1,059.1 | 5.1 | |||||||||||||||
| Closed Block | 626.7 | 650.2 | (3.6 | ) | 2,575.6 | 2,605.6 | (1.2 | ) | |||||||||||||
| Corporate | 35.0 | 37.1 | (5.7 | ) | 147.5 | 134.3 | 9.8 | ||||||||||||||
| 2,283.2 | 2,306.1 | (1.0 | ) | 9,115.7 | 9,219.5 | (1.1 | ) | ||||||||||||||
| Income (Loss) Before Income Tax, Net Realized Investment Gain, and Non-operating Retirement-related Loss | |||||||||||||||||||||
| Unum US | 210.8 | 208.1 | 1.3 | 868.6 | 847.1 | 2.5 | |||||||||||||||
| Unum UK | 36.5 | 31.3 | 16.6 | 132.0 | 131.3 | 0.5 | |||||||||||||||
| Colonial Life | 79.4 | 75.4 | 5.3 | 264.8 | 274.3 | (3.5 | ) | ||||||||||||||
| Closed Block | 29.1 | 27.3 | 6.6 | 109.4 | 95.5 | 14.6 | |||||||||||||||
| Corporate | (34.2 | ) | (33.7 | ) | (1.5 | ) | (143.5 | ) | (108.5 | ) | (32.3 | ) | |||||||||
| 321.6 | 308.4 | 4.3 | 1,231.3 | 1,239.7 | (0.7 | ) | |||||||||||||||
| Income Tax Expense | 95.9 | 92.8 | 3.3 | 355.7 | 352.2 | 1.0 | |||||||||||||||
| Income Before Net Realized Investment Gain and Non-operating Retirement-related Loss | 225.7 | 215.6 | 4.7 | 875.6 | 887.5 | (1.3 | ) | ||||||||||||||
| Net Realized Investment Gain, Net of Tax | 4.1 | 6.7 | (38.8 | ) | 3.9 | 37.1 | (89.5 | ) | |||||||||||||
| Non-operating Retirement-related Loss, Net of Tax | (0.9 | ) | (9.7 | ) | 90.7 | (21.4 | ) | (30.2 | ) | 29.1 | |||||||||||
| Net Income | $ | 228.9 | $ | 212.6 | 7.7 | $ | 858.1 | $ | 894.4 | (4.1 | ) | ||||||||||
7. 1
Unum Group Quarterly Historical Financial Results by Segment
| 3/31/14 | 12/31/13 | 9/30/13 | 6/30/13 | 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | |||||||||||||||||||||||||||
| Premium Income | |||||||||||||||||||||||||||||||||||
| Unum US | $ | 1,152.5 | $ | 1,121.3 | $ | 1,124.6 | $ | 1,131.5 | $ | 1,139.7 | $ | 1,117.6 | $ | 1,111.9 | $ | 1,115.0 | $ | 1,112.0 | |||||||||||||||||
| Unum UK | 151.7 | 137.9 | 137.3 | 137.6 | 143.8 | 175.5 | 175.2 | 173.2 | 170.7 | ||||||||||||||||||||||||||
| Colonial Life | 316.4 | 308.1 | 309.1 | 307.9 | 307.1 | 301.9 | 299.4 | 296.9 | 296.3 | ||||||||||||||||||||||||||
| Closed Block | 317.9 | 323.4 | 326.3 | 328.8 | 340.3 | 342.2 | 342.9 | 342.5 | 342.9 | ||||||||||||||||||||||||||
| 1,938.5 | 1,890.7 | 1,897.3 | 1,905.8 | 1,930.9 | 1,937.2 | 1,929.4 | 1,927.6 | 1,921.9 | |||||||||||||||||||||||||||
| Net Investment Income | |||||||||||||||||||||||||||||||||||
| Unum US | 226.4 | 229.7 | 233.1 | 231.1 | 235.7 | 240.5 | 236.3 | 236.9 | 238.6 | ||||||||||||||||||||||||||
| Unum UK | 33.6 | 42.0 | 30.3 | 45.4 | 30.8 | 50.3 | 34.8 | 49.2 | 36.5 | ||||||||||||||||||||||||||
| Colonial Life | 36.9 | 35.1 | 36.3 | 34.3 | 39.7 | 35.1 | 33.9 | 34.0 | 35.6 | ||||||||||||||||||||||||||
| Closed Block | 316.3 | 327.7 | 315.4 | 316.1 | 313.1 | 317.1 | 307.3 | 304.5 | 301.6 | ||||||||||||||||||||||||||
| Corporate | (0.7 | ) | (5.1 | ) | 0.4 | (0.8 | ) | 1.8 | — | 6.9 | 8.9 | 7.2 | |||||||||||||||||||||||
| 612.5 | 629.4 | 615.5 | 626.1 | 621.1 | 643.0 | 619.2 | 633.5 | 619.5 | |||||||||||||||||||||||||||
| Other Income | |||||||||||||||||||||||||||||||||||
| Unum US | 30.9 | 29.3 | 30.2 | 32.1 | 36.7 | 31.5 | 31.3 | 30.7 | 31.1 | ||||||||||||||||||||||||||
| Unum UK | (0.1 | ) | — | 0.1 | (0.1 | ) | 0.1 | — | — | — | 0.1 | ||||||||||||||||||||||||
| Colonial Life | (0.1 | ) | 0.1 | — | 0.1 | — | 0.1 | — | 0.1 | 0.1 | |||||||||||||||||||||||||
| Closed Block | 21.6 | 22.4 | 23.6 | 23.8 | 24.1 | 21.2 | 26.4 | 26.6 | 25.9 | ||||||||||||||||||||||||||
| Corporate | 1.5 | 5.0 | 0.3 | 0.8 | 1.6 | 0.6 | 0.4 | 1.5 | 0.3 | ||||||||||||||||||||||||||
| 53.8 | 56.8 | 54.2 | 56.7 | 62.5 | 53.4 | 58.1 | 58.9 | 57.5 | |||||||||||||||||||||||||||
| Total Operating Revenue | |||||||||||||||||||||||||||||||||||
| Unum US | 1,409.8 | 1,380.3 | 1,387.9 | 1,394.7 | 1,412.1 | 1,389.6 | 1,379.5 | 1,382.6 | 1,381.7 | ||||||||||||||||||||||||||
| Unum UK | 185.2 | 179.9 | 167.7 | 182.9 | 174.7 | 225.8 | 210.0 | 222.4 | 207.3 | ||||||||||||||||||||||||||
| Colonial Life | 353.2 | 343.3 | 345.4 | 342.3 | 346.8 | 337.1 | 333.3 | 331.0 | 332.0 | ||||||||||||||||||||||||||
| Closed Block | 655.8 | 673.5 | 665.3 | 668.7 | 677.5 | 680.5 | 676.6 | 673.6 | 670.4 | ||||||||||||||||||||||||||
| Corporate | 0.8 | (0.1 | ) | 0.7 | — | 3.4 | 0.6 | 7.3 | 10.4 | 7.5 | |||||||||||||||||||||||||
| $ | 2,604.8 | $ | 2,576.9 | $ | 2,567.0 | $ | 2,588.6 | $ | 2,614.5 | $ | 2,633.6 | $ | 2,606.7 | $ | 2,620.0 | $ | 2,598.9 | ||||||||||||||||||
8
Unum Group Quarterly Historical Financial Results by Segment - Continued
| 3/31/14 | 12/31/13 | 9/30/13 | 6/30/13 | 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | |||||||||||||||||||||||||||
| Benefits and Expenses | |||||||||||||||||||||||||||||||||||
| Unum US | $ | 1,199.0 | $ | 1,153.6 | $ | 1,168.1 | $ | 1,180.7 | $ | 1,204.0 | $ | 1,177.4 | $ | 1,163.2 | $ | 1,169.9 | $ | 1,175.8 | |||||||||||||||||
| Unum UK | 148.7 | 144.0 | 136.4 | 149.4 | 143.4 | 190.8 | 182.5 | 192.4 | 168.5 | ||||||||||||||||||||||||||
| Colonial Life | 273.8 | 294.0 | 276.4 | 271.2 | 271.4 | 268.8 | 264.6 | 263.4 | 262.3 | ||||||||||||||||||||||||||
| Closed Block | 626.7 | 646.7 | 639.6 | 639.1 | 650.2 | 651.7 | 651.0 | 647.9 | 655.0 | ||||||||||||||||||||||||||
| Corporate | 35.0 | 39.7 | 33.6 | 37.1 | 37.1 | 35.2 | 34.7 | 36.3 | 28.1 | ||||||||||||||||||||||||||
| 2,283.2 | 2,278.0 | 2,254.1 | 2,277.5 | 2,306.1 | 2,323.9 | 2,296.0 | 2,309.9 | 2,289.7 | |||||||||||||||||||||||||||
| Income (Loss) Before Income Tax, Net Realized Investment Gain (Loss), and Non-operating Retirement-related Loss | |||||||||||||||||||||||||||||||||||
| Unum US | 210.8 | 226.7 | 219.8 | 214.0 | 208.1 | 212.2 | 216.3 | 212.7 | 205.9 | ||||||||||||||||||||||||||
| Unum UK | 36.5 | 35.9 | 31.3 | 33.5 | 31.3 | 35.0 | 27.5 | 30.0 | 38.8 | ||||||||||||||||||||||||||
| Colonial Life | 79.4 | 49.3 | 69.0 | 71.1 | 75.4 | 68.3 | 68.7 | 67.6 | 69.7 | ||||||||||||||||||||||||||
| Closed Block | 29.1 | 26.8 | 25.7 | 29.6 | 27.3 | 28.8 | 25.6 | 25.7 | 15.4 | ||||||||||||||||||||||||||
| Corporate | (34.2 | ) | (39.8 | ) | (32.9 | ) | (37.1 | ) | (33.7 | ) | (34.6 | ) | (27.4 | ) | (25.9 | ) | (20.6 | ) | |||||||||||||||||
| 321.6 | 298.9 | 312.9 | 311.1 | 308.4 | 309.7 | 310.7 | 310.1 | 309.2 | |||||||||||||||||||||||||||
| Income Tax Expense | 95.9 | 82.0 | 88.3 | 92.6 | 92.8 | 84.7 | 86.7 | 84.8 | 96.0 | ||||||||||||||||||||||||||
| Income Before Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss | 225.7 | 216.9 | 224.6 | 218.5 | 215.6 | 225.0 | 224.0 | 225.3 | 213.2 | ||||||||||||||||||||||||||
| Net Realized Investment Gain (Loss), Net of Tax | 4.1 | 5.8 | (17.2 | ) | 8.6 | 6.7 | 16.4 | 13.8 | (1.4 | ) | 8.3 | ||||||||||||||||||||||||
| Non-operating Retirement-related Loss, Net of Tax | (0.9 | ) | (1.5 | ) | (1.7 | ) | (8.5 | ) | (9.7 | ) | (7.5 | ) | (7.6 | ) | (7.5 | ) | (7.6 | ) | |||||||||||||||||
| Net Income | $ | 228.9 | $ | 221.2 | $ | 205.7 | $ | 218.6 | $ | 212.6 | $ | 233.9 | $ | 230.2 | $ | 216.4 | $ | 213.9 | |||||||||||||||||
| Net Income Per Common Share - Assuming Dilution | $ | 0.88 | $ | 0.84 | $ | 0.78 | $ | 0.82 | $ | 0.79 | $ | 0.85 | $ | 0.83 | $ | 0.76 | $ | 0.73 | |||||||||||||||||
8. 1
Unum Group Financial Results for Unum US Segment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | $ | 1,152.5 | $ | 1,139.7 | $ | 4,517.1 | $ | 4,456.5 | |||||||
| Net Investment Income | 226.4 | 235.7 | 929.6 | 952.3 | |||||||||||
| Other Income | 30.9 | 36.7 | 128.3 | 124.6 | |||||||||||
| Total | 1,409.8 | 1,412.1 | 5,575.0 | 5,533.4 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 809.5 | 807.9 | 3,222.4 | 3,238.6 | |||||||||||
| Commissions | 136.5 | 135.9 | 505.2 | 507.5 | |||||||||||
| Deferral of Acquisition Costs | (74.3 | ) | (64.0 | ) | (252.0 | ) | (249.2 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 70.9 | 76.7 | 230.0 | 196.5 | |||||||||||
| Other Expenses | 256.4 | 247.5 | 1,000.8 | 992.9 | |||||||||||
| Total | 1,199.0 | 1,204.0 | 4,706.4 | 4,686.3 | |||||||||||
| Income Before Income Tax and Net Realized Investment Gains and Losses | 210.8 | 208.1 | 868.6 | 847.1 | |||||||||||
| Unclaimed Death Benefits (UDB) Reserve Increase | — | — | 75.4 | — | |||||||||||
| Group Life Waiver of Premium Benefit (Waiver) Reserve Reduction | — | — | (85.0 | ) | — | ||||||||||
| Operating Income | $ | 210.8 | $ | 208.1 | $ | 859.0 | $ | 847.1 | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratio | 70.2 | % | 70.9 | % | 71.3 | % | 72.7 | % | |||||||
| Benefit Ratio Excluding the UDB and Waiver Reserve Adjustments | 71.6 | % | |||||||||||||
| Other Expense Ratio | 22.2 | % | 21.7 | % | 22.2 | % | 22.3 | % | |||||||
| Income Ratio | 18.3 | % | 18.3 | % | 19.2 | % | 19.0 | % | |||||||
| Operating Income Ratio | 18.3 | % | 18.3 | % | 19.0 | % | 19.0 | % | |||||||
9
Unum Group Financial Results for Unum US Group Disability
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Group Long-term Disability | $ | 383.5 | $ | 392.7 | $ | 1,553.9 | $ | 1,578.8 | |||||||
| Group Short-term Disability | 137.3 | 131.0 | 519.6 | 476.7 | |||||||||||
| Total Premium Income | 520.8 | 523.7 | 2,073.5 | 2,055.5 | |||||||||||
| Net Investment Income | 132.4 | 141.5 | 550.1 | 576.9 | |||||||||||
| Other Income | 21.8 | 27.8 | 95.6 | 93.7 | |||||||||||
| Total | 675.0 | 693.0 | 2,719.2 | 2,726.1 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 432.5 | 441.4 | 1,732.9 | 1,741.6 | |||||||||||
| Commissions | 41.4 | 43.6 | 164.0 | 159.3 | |||||||||||
| Deferral of Acquisition Costs | (9.9 | ) | (6.7 | ) | (29.6 | ) | (26.3 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 6.5 | 5.2 | 21.1 | 18.3 | |||||||||||
| Other Expenses | 136.0 | 131.6 | 532.4 | 540.1 | |||||||||||
| Total | 606.5 | 615.1 | 2,420.8 | 2,433.0 | |||||||||||
| Operating Income | $ | 68.5 | $ | 77.9 | $ | 298.4 | $ | 293.1 | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratio | 83.0 | % | 84.3 | % | 83.6 | % | 84.7 | % | |||||||
| Other Expense Ratio | 26.1 | % | 25.1 | % | 25.7 | % | 26.3 | % | |||||||
| Operating Income Ratio | 13.2 | % | 14.9 | % | 14.4 | % | 14.3 | % | |||||||
| Persistency: | |||||||||||||||
| Group Long-term Disability | 88.9 | % | 88.9 | % | 87.2 | % | 90.7 | % | |||||||
| Group Short-term Disability | 88.1 | % | 89.8 | % | 88.0 | % | 88.0 | % | |||||||
9. 1
Unum Group Financial Results for Unum US Group Life and Accidental Death & Dismemberment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Group Life | $ | 309.9 | $ | 302.2 | $ | 1,213.9 | $ | 1,182.1 | |||||||
| Accidental Death & Dismemberment | 30.6 | 30.9 | 121.6 | 115.3 | |||||||||||
| Total Premium Income | 340.5 | 333.1 | 1,335.5 | 1,297.4 | |||||||||||
| Net Investment Income | 35.2 | 35.7 | 142.6 | 146.9 | |||||||||||
| Other Income | 0.4 | 0.5 | 1.8 | 1.9 | |||||||||||
| Total | 376.1 | 369.3 | 1,479.9 | 1,446.2 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 239.3 | 235.3 | 909.9 | 936.4 | |||||||||||
| Commissions | 28.5 | 28.4 | 108.9 | 104.6 | |||||||||||
| Deferral of Acquisition Costs | (7.2 | ) | (5.7 | ) | (24.7 | ) | (22.4 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 5.3 | 4.1 | 15.6 | 13.6 | |||||||||||
| Other Expenses | 50.4 | 49.3 | 198.2 | 193.1 | |||||||||||
| Total | 316.3 | 311.4 | 1,207.9 | 1,225.3 | |||||||||||
| Income Before Income Tax and Net Realized Investment Gains and Losses | 59.8 | 57.9 | 272.0 | 220.9 | |||||||||||
| UDB Reserve Increase | — | — | 49.1 | — | |||||||||||
| Waiver Reserve Reduction | — | — | (85.0 | ) | — | ||||||||||
| Operating Income | $ | 59.8 | $ | 57.9 | $ | 236.1 | $ | 220.9 | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratio | 70.3 | % | 70.6 | % | 68.1 | % | 72.2 | % | |||||||
| Benefit Ratio Excluding the UDB and Waiver Reserve Adjustments | 70.8 | % | |||||||||||||
| Other Expense Ratio | 14.8 | % | 14.8 | % | 14.8 | % | 14.9 | % | |||||||
| Income Ratio | 17.6 | % | 17.4 | % | 20.4 | % | 17.0 | % | |||||||
| Operating Income Ratio | 17.6 | % | 17.4 | % | 17.7 | % | 17.0 | % | |||||||
| Persistency: | |||||||||||||||
| Group Life | 89.5 | % | 88.9 | % | 88.1 | % | 90.6 | % | |||||||
| Accidental Death & Dismemberment | 89.6 | % | 89.9 | % | 88.8 | % | 90.0 | % | |||||||
9. 2
Unum Group Financial Results for Unum US Supplemental and Voluntary
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Individual Disability - Recently Issued | $ | 115.9 | $ | 120.1 | $ | 465.3 | $ | 477.6 | |||||||
| Voluntary Benefits | 175.3 | 162.8 | 642.8 | 626.0 | |||||||||||
| Total Premium Income | 291.2 | 282.9 | 1,108.1 | 1,103.6 | |||||||||||
| Net Investment Income | 58.8 | 58.5 | 236.9 | 228.5 | |||||||||||
| Other Income | 8.7 | 8.4 | 30.9 | 29.0 | |||||||||||
| Total | 358.7 | 349.8 | 1,375.9 | 1,361.1 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 137.7 | 131.2 | 579.6 | 560.6 | |||||||||||
| Commissions | 66.6 | 63.9 | 232.3 | 243.6 | |||||||||||
| Deferral of Acquisition Costs | (57.2 | ) | (51.6 | ) | (197.7 | ) | (200.5 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 59.1 | 67.4 | 193.3 | 164.6 | |||||||||||
| Other Expenses | 70.0 | 66.6 | 270.2 | 259.7 | |||||||||||
| Total | 276.2 | 277.5 | 1,077.7 | 1,028.0 | |||||||||||
| Income Before Income Tax and Net Realized Investment Gains and Losses | 82.5 | 72.3 | 298.2 | 333.1 | |||||||||||
| UDB Reserve Increase | — | — | 26.3 | — | |||||||||||
| Operating Income | $ | 82.5 | $ | 72.3 | $ | 324.5 | $ | 333.1 | |||||||
| Interest Adjusted Loss Ratio: | |||||||||||||||
| Individual Disability - Recently Issued | 27.2 | % | 25.2 | % | 29.6 | % | 31.2 | % | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratios: | |||||||||||||||
| Individual Disability - Recently Issued | 49.0 | % | 46.2 | % | 51.3 | % | 52.4 | % | |||||||
| Voluntary Benefits | 46.1 | % | 46.5 | % | 53.0 | % | 49.5 | % | |||||||
| Benefit Ratio Excluding the UDB Reserve Increase | |||||||||||||||
| Voluntary Benefits | 48.9 | % | |||||||||||||
| Other Expense Ratio | 24.0 | % | 23.5 | % | 24.4 | % | 23.5 | % | |||||||
| Income Ratio | 28.3 | % | 25.6 | % | 26.9 | % | 30.2 | % | |||||||
| Operating Income Ratio | 28.3 | % | 25.6 | % | 29.3 | % | 30.2 | % | |||||||
| Persistency: | |||||||||||||||
| Individual Disability - Recently Issued | 90.6 | % | 90.6 | % | 90.5 | % | 91.4 | % | |||||||
| Voluntary Benefits | 78.0 | % | 77.2 | % | 77.0 | % | 78.9 | % | |||||||
9. 3
Unum Group Financial Results for Unum UK Segment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Group Long-term Disability | $ | 103.0 | $ | 97.9 | $ | 389.9 | $ | 409.7 | |||||||
| Group Life | 34.8 | 31.0 | 106.4 | 221.3 | |||||||||||
| Supplemental | 13.9 | 14.9 | 60.3 | 63.6 | |||||||||||
| Total Premium Income | 151.7 | 143.8 | 556.6 | 694.6 | |||||||||||
| Net Investment Income | 33.6 | 30.8 | 148.5 | 170.8 | |||||||||||
| Other Income | (0.1 | ) | 0.1 | 0.1 | 0.1 | ||||||||||
| Total | 185.2 | 174.7 | 705.2 | 865.5 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 106.4 | 100.0 | 413.3 | 541.4 | |||||||||||
| Commissions | 9.9 | 10.3 | 38.0 | 42.6 | |||||||||||
| Deferral of Acquisition Costs | (2.2 | ) | (2.3 | ) | (9.8 | ) | (11.8 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 3.2 | 4.1 | 14.7 | 15.7 | |||||||||||
| Other Expenses | 31.4 | 31.3 | 117.0 | 146.3 | |||||||||||
| Total | 148.7 | 143.4 | 573.2 | 734.2 | |||||||||||
| Operating Income | $ | 36.5 | $ | 31.3 | $ | 132.0 | $ | 131.3 | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratio | 70.1 | % | 69.5 | % | 74.3 | % | 77.9 | % | |||||||
| Other Expense Ratio | 20.7 | % | 21.8 | % | 21.0 | % | 21.1 | % | |||||||
| Operating Income Ratio | 24.1 | % | 21.8 | % | 23.7 | % | 18.9 | % | |||||||
| Persistency: | |||||||||||||||
| Group Long-term Disability | 86.3 | % | 82.2 | % | 82.2 | % | 84.0 | % | |||||||
| Group Life | 69.7 | % | 66.7 | % | 66.7 | % | 82.5 | % | |||||||
| Supplemental | 85.2 | % | 78.8 | % | 78.8 | % | 84.6 | % | |||||||
10
Unum Group Financial Results for Unum UK Segment - Continued
| (in millions of pounds, except exchange rate) | Three Months Ended | Year Ended | |||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Group Long-term Disability | £ | 62.2 | £ | 63.1 | £ | 249.2 | £ | 258.4 | |||||||
| Group Life | 21.0 | 20.0 | 68.2 | 139.6 | |||||||||||
| Supplemental | 8.4 | 9.7 | 38.5 | 40.1 | |||||||||||
| Total Premium Income | 91.6 | 92.8 | 355.9 | 438.1 | |||||||||||
| Net Investment Income | 20.3 | 19.8 | 94.9 | 107.7 | |||||||||||
| Other Income | — | — | 0.1 | — | |||||||||||
| Total | 111.9 | 112.6 | 450.9 | 545.8 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 64.3 | 64.5 | 264.5 | 341.4 | |||||||||||
| Commissions | 6.0 | 6.6 | 24.3 | 26.9 | |||||||||||
| Deferral of Acquisition Costs | (1.3 | ) | (1.5 | ) | (6.2 | ) | (7.5 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 1.9 | 2.7 | 9.3 | 9.9 | |||||||||||
| Other Expenses | 19.0 | 20.1 | 74.7 | 92.2 | |||||||||||
| Total | 89.9 | 92.4 | 366.6 | 462.9 | |||||||||||
| Operating Income | £ | 22.0 | £ | 20.2 | £ | 84.3 | £ | 82.9 | |||||||
| Weighted Average Pound/Dollar Exchange Rate | 1.659 | 1.550 | 1.566 | 1.584 | |||||||||||
10. 1
Unum Group Financial Results for Colonial Life Segment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Accident, Sickness, and Disability | $ | 189.1 | $ | 184.8 | $ | 738.7 | $ | 724.5 | |||||||
| Life | 57.4 | 54.8 | 221.1 | 209.7 | |||||||||||
| Cancer and Critical Illness | 69.9 | 67.5 | 272.4 | 260.3 | |||||||||||
| Total Premium Income | 316.4 | 307.1 | 1,232.2 | 1,194.5 | |||||||||||
| Net Investment Income | 36.9 | 39.7 | 145.4 | 138.6 | |||||||||||
| Other Income | (0.1 | ) | — | 0.2 | 0.3 | ||||||||||
| Total | 353.2 | 346.8 | 1,377.8 | 1,333.4 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 159.8 | 161.3 | 667.0 | 627.3 | |||||||||||
| Commissions | 63.5 | 64.0 | 252.5 | 254.5 | |||||||||||
| Deferral of Acquisition Costs | (52.5 | ) | (51.9 | ) | (205.0 | ) | (206.3 | ) | |||||||
| Amortization of Deferred Acquisition Costs | 44.5 | 43.0 | 174.2 | 166.5 | |||||||||||
| Other Expenses | 58.5 | 55.0 | 224.3 | 217.1 | |||||||||||
| Total | 273.8 | 271.4 | 1,113.0 | 1,059.1 | |||||||||||
| Income Before Income Tax and Net Realized Investment Gains and Losses | 79.4 | 75.4 | 264.8 | 274.3 | |||||||||||
| UDB Reserve Increase | — | — | 20.1 | — | |||||||||||
| Operating Income | $ | 79.4 | $ | 75.4 | $ | 284.9 | $ | 274.3 | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Benefit Ratio | 50.5 | % | 52.5 | % | 54.1 | % | 52.5 | % | |||||||
| Benefit Ratio Excluding the UDB Reserve Increase | 52.5 | % | |||||||||||||
| Other Expense Ratio | 18.5 | % | 17.9 | % | 18.2 | % | 18.2 | % | |||||||
| Income Ratio | 25.1 | % | 24.6 | % | 21.5 | % | 23.0 | % | |||||||
| Operating Income Ratio | 25.1 | % | 24.6 | % | 23.1 | % | 23.0 | % | |||||||
| Persistency: | |||||||||||||||
| Accident, Sickness, and Disability | 74.7 | % | 75.8 | % | 75.2 | % | 75.7 | % | |||||||
| Life | 84.8 | % | 85.5 | % | 85.2 | % | 85.7 | % | |||||||
| Cancer and Critical Illness | 82.4 | % | 84.1 | % | 83.1 | % | 84.5 | % | |||||||
11
Unum Group Financial Results for Closed Block Segment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Premium Income | |||||||||||||||
| Individual Disability | $ | 161.1 | $ | 181.8 | $ | 687.5 | $ | 736.4 | |||||||
| Long-term Care | 156.5 | 158.8 | 630.6 | 631.9 | |||||||||||
| All Other | 0.3 | (0.3 | ) | 0.7 | 2.2 | ||||||||||
| Total Premium Income | 317.9 | 340.3 | 1,318.8 | 1,370.5 | |||||||||||
| Net Investment Income | 316.3 | 313.1 | 1,272.3 | 1,230.5 | |||||||||||
| Other Income | 21.6 | 24.1 | 93.9 | 100.1 | |||||||||||
| Total | 655.8 | 677.5 | 2,685.0 | 2,701.1 | |||||||||||
| Benefits and Expenses | |||||||||||||||
| Benefits and Change in Reserves for Future Benefits | 555.6 | 579.3 | 2,293.0 | 2,314.9 | |||||||||||
| Commissions | 26.1 | 28.0 | 113.8 | 112.6 | |||||||||||
| Interest and Debt Expense | 1.9 | 2.2 | 8.4 | 10.4 | |||||||||||
| Other Expenses | 43.1 | 40.7 | 160.4 | 167.7 | |||||||||||
| Total | 626.7 | 650.2 | 2,575.6 | 2,605.6 | |||||||||||
| Operating Income | $ | 29.1 | $ | 27.3 | $ | 109.4 | $ | 95.5 | |||||||
| Interest Adjusted Loss Ratios: | |||||||||||||||
| Individual Disability | 81.5 | % | 81.5 | % | 82.6 | % | 83.0 | % | |||||||
| Long-term Care | 84.7 | % | 89.5 | % | 89.6 | % | 90.1 | % | |||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||
| Other Expense Ratio | 13.6 | % | 12.0 | % | 12.2 | % | 12.2 | % | |||||||
| Operating Income Ratio | 9.2 | % | 8.0 | % | 8.3 | % | 7.0 | % | |||||||
| Persistency: | |||||||||||||||
| Individual Disability | 91.4 | % | 92.5 | % | 91.8 | % | 92.5 | % | |||||||
| Long-term Care | 95.3 | % | 95.5 | % | 95.5 | % | 95.8 | % | |||||||
12
Unum Group Financial Results for Corporate Segment
| Three Months Ended | Year Ended | ||||||||||||||
| 3/31/2014 | 3/31/2013 | 12/31/2013 | 12/31/2012 | ||||||||||||
| Operating Revenue | |||||||||||||||
| Net Investment Income | $ | (0.7 | ) | $ | 1.8 | $ | (3.7 | ) | $ | 23.0 | |||||
| Other Income | 1.5 | 1.6 | 7.7 | 2.8 | |||||||||||
| Total | 0.8 | 3.4 | 4.0 | 25.8 | |||||||||||
| Interest and Other Expenses | 35.0 | 37.1 | 147.5 | 134.3 | |||||||||||
| Operating Loss | $ | (34.2 | ) | $ | (33.7 | ) | $ | (143.5 | ) | $ | (108.5 | ) | |||
13
Unum Group Reserves
| March 31, 2014 | |||||||||||||||||||||||||||||
| Gross | Total | ||||||||||||||||||||||||||||
| Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
| Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
| Group Disability | $ | — | — | % | $ | 6,725.0 | $ | 584.6 | 29.9 | % | $ | 7,309.6 | $ | 65.0 | $ | 7,244.6 | |||||||||||||
| Group Life and Accidental Death & Dismemberment | 70.6 | 0.4 | 700.2 | 198.3 | 3.7 | 969.1 | 2.6 | 966.5 | |||||||||||||||||||||
| Individual Disability - Recently Issued | 554.6 | 3.5 | 1,176.3 | 124.0 | 5.3 | 1,854.9 | 113.1 | 1,741.8 | |||||||||||||||||||||
| Voluntary Benefits | 1,309.9 | 8.1 | 51.5 | 73.4 | 0.5 | 1,434.8 | 29.3 | 1,405.5 | |||||||||||||||||||||
| Unum US Segment | 1,935.1 | 12.0 | 8,653.0 | 980.3 | 39.4 | 11,568.4 | 210.0 | 11,358.4 | |||||||||||||||||||||
| Unum UK Segment | 24.9 | 0.2 | 2,313.6 | 155.9 | 10.1 | 2,494.4 | 124.1 | 2,370.3 | |||||||||||||||||||||
| Colonial Life Segment | 1,592.8 | 9.9 | 278.2 | 136.0 | 1.7 | 2,007.0 | 14.3 | 1,992.7 | |||||||||||||||||||||
| Individual Disability | 824.5 | 5.1 | 10,285.5 | 298.0 | 43.2 | 11,408.0 | 1,542.1 | 9,865.9 | |||||||||||||||||||||
| Long-term Care | 5,913.9 | 36.8 | 895.8 | 97.3 | 4.1 | 6,907.0 | 43.0 | 6,864.0 | |||||||||||||||||||||
| Other | 5,796.3 | 36.0 | 227.0 | 153.9 | 1.5 | 6,177.2 | 4,934.5 | 1,242.7 | |||||||||||||||||||||
| Closed Block Segment | 12,534.7 | 77.9 | 11,408.3 | 549.2 | 48.8 | 24,492.2 | 6,519.6 | 17,972.6 | |||||||||||||||||||||
| Subtotal | $ | 16,087.5 | 100.0 | % | $ | 22,653.1 | $ | 1,821.4 | 100.0 | % | 40,562.0 | 6,868.0 | 33,694.0 | ||||||||||||||||
| Adjustment to Reserves for Unrealized Gain on Securities | 4,939.7 | 309.9 | 4,629.8 | ||||||||||||||||||||||||||
| Consolidated | $ | 45,501.7 | $ | 7,177.9 | $ | 38,323.8 | |||||||||||||||||||||||
The increase in the adjustment to reserves for unrealized gain on securities, relative to year-end 2013, was due primarily to a decrease in both U.S. Treasury rates and credit spreads. This adjustment is consistent with a similar adjustment to our invested assets.
14
Unum Group Reserves
| December 31, 2013 | |||||||||||||||||||||||||||||
| Gross | Total | ||||||||||||||||||||||||||||
| Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
| Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
| Group Disability | $ | — | — | % | $ | 6,810.3 | $ | 569.1 | 30.1 | % | $ | 7,379.4 | $ | 66.6 | $ | 7,312.8 | |||||||||||||
| Group Life and Accidental Death & Dismemberment | 72.3 | 0.5 | 713.2 | 201.1 | 3.7 | 986.6 | 2.5 | 984.1 | |||||||||||||||||||||
| Individual Disability - Recently Issued | 558.3 | 3.5 | 1,155.7 | 124.4 | 5.2 | 1,838.4 | 104.3 | 1,734.1 | |||||||||||||||||||||
| Voluntary Benefits | 1,298.4 | 8.1 | 48.9 | 73.2 | 0.5 | 1,420.5 | 29.2 | 1,391.3 | |||||||||||||||||||||
| Unum US Segment | 1,929.0 | 12.1 | 8,728.1 | 967.8 | 39.5 | 11,624.9 | 202.6 | 11,422.3 | |||||||||||||||||||||
| Unum UK Segment | 24.9 | 0.1 | 2,286.0 | 171.7 | 10.0 | 2,482.6 | 130.1 | 2,352.5 | |||||||||||||||||||||
| Colonial Life Segment | 1,577.6 | 9.9 | 274.1 | 134.1 | 1.7 | 1,985.8 | 13.9 | 1,971.9 | |||||||||||||||||||||
| Individual Disability | 859.3 | 5.4 | 10,346.8 | 281.9 | 43.3 | 11,488.0 | 1,545.0 | 9,943.0 | |||||||||||||||||||||
| Long-term Care | 5,791.4 | 36.3 | 865.7 | 94.8 | 3.9 | 6,751.9 | 42.6 | 6,709.3 | |||||||||||||||||||||
| Other | 5,783.8 | 36.2 | 234.4 | 150.2 | 1.6 | 6,168.4 | 4,915.2 | 1,253.2 | |||||||||||||||||||||
| Closed Block Segment | 12,434.5 | 77.9 | 11,446.9 | 526.9 | 48.8 | 24,408.3 | 6,502.8 | 17,905.5 | |||||||||||||||||||||
| Subtotal | $ | 15,966.0 | 100.0 | % | $ | 22,735.1 | $ | 1,800.5 | 100.0 | % | 40,501.6 | 6,849.4 | 33,652.2 | ||||||||||||||||
| Adjustment to Reserves for Unrealized Gain on Securities | 4,108.5 | 263.8 | 3,844.7 | ||||||||||||||||||||||||||
| Consolidated | $ | 44,610.1 | $ | 7,113.2 | $ | 37,496.9 | |||||||||||||||||||||||
14. 1
Unum Group Investments
| 3/31/2014 | 3/31/2014 | 12/31/2013 | |||||||||||||||
| Fixed Maturity Securities (Fair Value) | Selected Statistics | ||||||||||||||||
| Public | $ | 28,338.8 | 64.9 | % | Duration Weighted Book Yield | 6.25 | % | 6.28 | % | ||||||||
| Asset-Backed Securities (1) | 95.2 | 0.2 | Average Duration (in years) | 7.51 | 7.42 | ||||||||||||
| Residential Mortgage-Backed Securities (2) | 2,063.5 | 4.7 | |||||||||||||||
| Commercial Mortgage-Backed Securities | 128.0 | 0.3 | |||||||||||||||
| Private Placements | 5,309.2 | 12.2 | |||||||||||||||
| High Yield | 3,239.2 | 7.4 | |||||||||||||||
| Government Securities | 2,527.7 | 5.8 | |||||||||||||||
| Municipal Securities (3) | 1,926.8 | 4.4 | |||||||||||||||
| Redeemable Preferred Stocks | 38.4 | 0.1 | |||||||||||||||
| Total | $ | 43,666.8 | 100.0 | % | |||||||||||||
| Amortized Cost | Fair Value | ||||||||||||||||
| Quality Ratings of Fixed Maturity Securities | Schedule BA and Non-Current | ||||||||||||||||
| Aaa | 8.5 | % | 8.5 | % | Total Non-Current Investments | $ | 39.9 | $ | 39.9 | ||||||||
| Aa | 9.4 | 9.6 | Total Schedule BA Assets | $ | 477.4 | $ | 475.2 | ||||||||||
| A | 30.6 | 31.4 | |||||||||||||||
| Baa | 43.4 | 43.0 | |||||||||||||||
| Below Baa | 8.1 | 7.5 | |||||||||||||||
| Total | 100.0 | % | 100.0 | % | |||||||||||||
| (1) Includes $0.4 million of high yield asset-backed securities. | |||||||||||||||||
| (2) Includes $37.1 million of high yield mortgage-backed securities. | |||||||||||||||||
| (3) Includes $17.8 million of high yield taxable municipal securities. | |||||||||||||||||
15
Unum Group Investments at March 31, 2014
| Fixed Maturity Securities - By Industry Classification - Unrealized Gain (Loss) | ||||||||||||||||||||||||
| Classification | Fair Value | Net Unrealized Gain | Fair Value of Fixed Maturity Securities with Gross Unrealized Loss | Gross Unrealized Loss | Fair Value of Fixed Maturity Securities with Gross Unrealized Gain | Gross Unrealized Gain | ||||||||||||||||||
| Basic Industry | $ | 2,788.2 | $ | 237.6 | $ | 358.2 | $ | 22.7 | $ | 2,430.0 | $ | 260.3 | ||||||||||||
| Capital Goods | 3,756.7 | 430.7 | 255.3 | 6.6 | 3,501.4 | 437.3 | ||||||||||||||||||
| Communications | 2,890.3 | 414.0 | 236.2 | 7.4 | 2,654.1 | 421.4 | ||||||||||||||||||
| Consumer Cyclical | 1,267.9 | 146.3 | 8.8 | 0.1 | 1,259.1 | 146.4 | ||||||||||||||||||
| Consumer Non-Cyclical | 5,779.3 | 672.3 | 602.0 | 28.0 | 5,177.3 | 700.3 | ||||||||||||||||||
| Energy (Oil & Gas) | 3,772.9 | 549.3 | 249.7 | 10.4 | 3,523.2 | 559.7 | ||||||||||||||||||
| Financial Institutions | 3,389.8 | 323.7 | 129.4 | 2.0 | 3,260.4 | 325.7 | ||||||||||||||||||
| Mortgage/Asset-Backed | 2,286.7 | 184.2 | 263.8 | 2.6 | 2,022.9 | 186.8 | ||||||||||||||||||
| Sovereigns | 1,371.0 | 165.3 | 34.8 | 1.0 | 1,336.2 | 166.3 | ||||||||||||||||||
| Technology | 964.6 | 70.9 | 230.9 | 7.5 | 733.7 | 78.4 | ||||||||||||||||||
| Transportation | 1,474.4 | 192.7 | 95.2 | 3.3 | 1,379.2 | 196.0 | ||||||||||||||||||
| U.S. Government Agencies and Municipalities | 3,083.5 | 392.1 | 257.2 | 20.2 | 2,826.3 | 412.3 | ||||||||||||||||||
| Public Utilities | 10,803.1 | 1,366.3 | 677.2 | 28.0 | 10,125.9 | 1,394.3 | ||||||||||||||||||
| Redeemable Preferred Stocks | 38.4 | 5.4 | — | — | 38.4 | 5.4 | ||||||||||||||||||
| Total | $ | 43,666.8 | $ | 5,150.8 | $ | 3,398.7 | $ | 139.8 | $ | 40,268.1 | $ | 5,290.6 | ||||||||||||
| Gross Unrealized Loss on Fixed Maturity Securities By Length of Time in Unrealized Loss Position | ||||||||||||||||||||||||
| Investment-Grade | Below-Investment-Grade | |||||||||||||||||||||||
| Category | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||
| Less than 91 days | $ | 410.9 | $ | 4.6 | $ | 109.5 | $ | 1.2 | ||||||||||||||||
| 91 through 180 days | 45.5 | 0.3 | 19.4 | 0.7 | ||||||||||||||||||||
| 181 through 270 days | 153.2 | 2.9 | 18.6 | 0.9 | ||||||||||||||||||||
| 271 days to 1 year | 1,923.2 | 85.6 | 348.0 | 8.1 | ||||||||||||||||||||
| Greater than 1 year | 225.3 | 20.1 | 145.1 | 15.4 | ||||||||||||||||||||
| Total | $ | 2,758.1 | $ | 113.5 | $ | 640.6 | $ | 26.3 | ||||||||||||||||
15. 1
Appendix to Statistical Supplement
2013 Significant Items
Year ended December 31, 2013 results included the following:
| • | Claim reserve increases of $49.1 million for Unum US group life, $26.3 million for Unum US voluntary life, and $20.1 million for Colonial Life voluntary life, for a total reserve increase of $95.5 million with a corresponding decrease in net income of $62.1 million, less applicable income tax, related to unclaimed death benefits. |
| • | A reserve reduction of $85.0 million before tax and $55.2 million after tax related to Unum US group life waiver of premium benefits. |
Non-GAAP Financial Measures
We analyze our Company's performance using non-GAAP financial measures which exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We believe the following non-GAAP financial measures are better performance measures and better indicators of the revenue and profitability and underlying trends in our business:
| • | Operating revenue, which excludes realized investment gains or losses; |
| • | Before-tax operating income or loss, which excludes realized investment gains or losses, non-operating retirement-related gains or losses, income tax, and certain other items, as applicable, and after-tax operating income or loss which includes income tax; |
| • | Operating return on equity, which is calculated using after-tax operating income or loss and excludes from equity the unrealized gain or loss on securities and net gain on cash flow hedges; |
| • | Leverage ratio, which excludes the unrealized gain or loss on securities and net gain on cash flow hedges, the non-recourse debt and associated capital of Tailwind Holdings, LLC and Northwind Holdings, LLC, and short-term debt arising from securities lending agreements; and |
| • | Book value per common share, which is calculated excluding AOCI. |
Realized investment gains or losses, non-operating retirement-related gains or losses, unrealized gains or losses on securities and net gains on cash flow hedges depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our Company. Leverage ratio and book value per common share excluding certain components of AOCI, certain of which tend to fluctuate depending on market conditions and general economic trends, are important measures. We also exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace the comparable GAAP measures in the determination of overall profitability. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, refer to the "Reconciliation of Non-GAAP Financial Measures" beginning on page 16.1.
| 16 | ||
Reconciliation of Non-GAAP Financial Measures
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| March 31 | December 31 | September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||
| Operating Revenue | $ | 2,604.8 | $ | 2,576.9 | $ | 2,567.0 | $ | 2,588.6 | $ | 2,614.5 | $ | 2,633.6 | $ | 2,606.7 | $ | 2,620.0 | $ | 2,598.9 | ||||||||||||||||||
| Net Realized Investment Gain (Loss) | 6.3 | 9.3 | (26.1 | ) | 13.3 | 10.3 | 24.6 | 21.3 | (2.1 | ) | 12.4 | |||||||||||||||||||||||||
| Total Revenue | $ | 2,611.1 | $ | 2,586.2 | $ | 2,540.9 | $ | 2,601.9 | $ | 2,624.8 | $ | 2,658.2 | $ | 2,628.0 | $ | 2,617.9 | $ | 2,611.3 | ||||||||||||||||||
| After-Tax | Average | ||||||||||
| Operating | Allocated | Operating | |||||||||
| Income (Loss) | Equity(1) | Return | |||||||||
| (in millions) | On Equity | ||||||||||
| Year Ended December 31, 2013 | |||||||||||
| Unum US | $ | 563.1 | $ | 4,141.8 | 13.6 | % | |||||
| Unum UK | 104.5 | 744.3 | 14.0 | % | |||||||
| Colonial Life | 185.2 | 1,122.6 | 16.5 | % | |||||||
| Core Operating Segments | 852.8 | 6,008.7 | 14.2 | % | |||||||
| Closed Block | 71.3 | 2,580.4 | |||||||||
| Corporate | (41.6 | ) | (856.8 | ) | |||||||
| Total | $ | 882.5 | $ | 7,732.3 | 11.4 | % | |||||
| Year Ended December 31, 2012 | |||||||||||
| Unum US | $ | 555.3 | $ | 4,024.1 | 13.8 | % | |||||
| Unum UK | 99.2 | 811.2 | 12.2 | % | |||||||
| Colonial Life | 178.3 | 1,064.4 | 16.8 | % | |||||||
| Core Operating Segments | 832.8 | 5,899.7 | 14.1 | % | |||||||
| Closed Block | 62.3 | 2,234.2 | |||||||||
| Corporate | (7.6 | ) | (892.1 | ) | |||||||
| Total | $ | 887.5 | $ | 7,241.8 | 12.3 | % | |||||
(1)Excludes unrealized gain on securities and net gain on cash flow hedges and is calculated using the stockholders' equity balances presented on pages 2 and 16.2.
16. 1
Reconciliation of Non-GAAP Financial Measures - Continued
| After-Tax | Average | Annualized | |||||||||
| Operating | Allocated | Operating | |||||||||
| Income (Loss) | Equity(2) | Return | |||||||||
| (in millions) | On Equity | ||||||||||
| Three Months Ended March 31, 2014 | |||||||||||
| Unum US | $ | 138.1 | $ | 4,131.9 | 13.4 | % | |||||
| Unum UK | 29.3 | 646.0 | 18.1 | % | |||||||
| Colonial Life | 51.6 | 1,144.4 | 18.1 | % | |||||||
| Core Operating Segments | 219.0 | 5,922.3 | 14.8 | % | |||||||
| Closed Block | 19.3 | 2,714.2 | |||||||||
| Corporate | (12.6 | ) | (456.7 | ) | |||||||
| Total | $ | 225.7 | $ | 8,179.8 | 11.0 | % | |||||
| Three Months Ended March 31, 2013 | |||||||||||
| Unum US | $ | 136.4 | $ | 4,118.5 | 13.3 | % | |||||
| Unum UK | 24.3 | 743.1 | 13.1 | % | |||||||
| Colonial Life | 49.0 | 1,103.8 | 17.8 | % | |||||||
| Core Operating Segments | 209.7 | 5,965.4 | 14.1 | % | |||||||
| Closed Block | 17.6 | 2,489.1 | |||||||||
| Corporate | (11.7 | ) | (1,102.9 | ) | |||||||
| Total | $ | 215.6 | $ | 7,351.6 | 11.7 | % | |||||
(2) Excludes unrealized gain on securities and net gain on cash flow hedges and is calculated using the stockholders' equity balances presented on page 2.
Average allocated equity for the year ended December 31, 2012 is computed as follows:
| (in millions) | 12/31/2012 | 12/31/2011 | |||||
| Total Stockholders' Equity, As Reported | $ | 8,612.6 | $ | 8,169.7 | |||
| Net Unrealized Gain on Securities | 873.5 | 614.8 | |||||
| Net Gain on Cash Flow Hedges | 401.6 | 408.7 | |||||
| Total Stockholders' Equity, As Adjusted | $ | 7,337.5 | $ | 7,146.2 | |||
| Average Stockholders' Equity Excluding Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | $ | 7,241.8 | |||||
16. 2
Reconciliation of Non-GAAP Financial Measures - Continued
| March 31 | December 31 | |||||||||||||||
| 2014 | 2013 | 2013 | 2012 | |||||||||||||
| (in millions) | ||||||||||||||||
| Debt, As Reported | $ | 3,009.8 | $ | 2,910.2 | $ | 2,688.5 | $ | 3,211.2 | ||||||||
| Excluding Securities Lending Agreements | 61.6 | 236.3 | 76.5 | 455.8 | ||||||||||||
| Excluding Non-recourse Debt | 425.0 | 485.0 | 440.0 | 562.5 | ||||||||||||
| Debt, As Adjusted | $ | 2,523.2 | $ | 2,188.9 | $ | 2,172.0 | $ | 2,192.9 | ||||||||
| Total Stockholders' Equity, As Reported | $ | 8,955.7 | $ | 8,557.8 | $ | 8,659.1 | $ | 8,612.6 | ||||||||
| Excluding Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | 723.3 | 1,192.0 | 532.0 | 1,275.1 | ||||||||||||
| Excluding Northwind and Tailwind Capital | 848.5 | 850.1 | 846.4 | 870.6 | ||||||||||||
| 7,383.9 | 6,515.7 | 7,280.7 | 6,466.9 | |||||||||||||
| Debt, As Adjusted | 2,523.2 | 2,188.9 | 2,172.0 | 2,192.9 | ||||||||||||
| Total Capital, As Adjusted | $ | 9,907.1 | $ | 8,704.6 | $ | 9,452.7 | $ | 8,659.8 | ||||||||
| Leverage Ratio | 25.5 | % | 25.1 | % | 23.0 | % | 25.3 | % | ||||||||
| Three Months Ended March 31 | ||||||||||||||||
| 2014 | 2013 | |||||||||||||||
| (in millions) | per share * | (in millions) | per share * | |||||||||||||
| After-tax Operating Income | $ | 225.7 | $ | 0.87 | $ | 215.6 | $ | 0.80 | ||||||||
| Net Realized Investment Gain, Net of Tax | 4.1 | 0.01 | 6.7 | 0.03 | ||||||||||||
| Non-operating Retirement-related Loss, Net of Tax | (0.9 | ) | — | (9.7 | ) | (0.04 | ) | |||||||||
| Net Income | $ | 228.9 | $ | 0.88 | $ | 212.6 | $ | 0.79 | ||||||||
| * Assuming Dilution | ||||||||||||||||
| Year Ended December 31 | ||||||||
| (in millions) | 2013 | 2012 | ||||||
| After-tax Operating Income | $ | 882.5 | $ | 887.5 | ||||
| Net Realized Investment Gain, Net of Tax | 3.9 | 37.1 | ||||||
| Non-operating Retirement-related Loss, Net of Tax | (21.4 | ) | (30.2 | ) | ||||
| UDB Reserve Increase, Net of Tax | (62.1 | ) | — | |||||
| Waiver Reserve Reduction, Net of Tax | 55.2 | — | ||||||
| Net Income | $ | 858.1 | $ | 894.4 | ||||
16. 3