Unum 8K Reports Fourth Quarter 2019 Results | UNM 4 Feb 20

Unum Group

Statistical Supplement Fourth Quarter 2019

TABLE OF CONTENTS

(in millions of dollars, except share data and where noted)

Interim Results are Unaudited


						Page
			Financial Highlights			1
			Capital Metrics			2
			Ratings			3
			Consolidated Statements of Income			4
			Sales Data by Segment			5
			Consolidated Balance Sheets			6
			Financial Results by Segment			7
			Quarterly Historical Financial Results by Segment			8
			Financial Results and Selected Statistics by Segment
			Unum US			9
			Unum International			10
			Colonial Life			11
			Closed Block			12
			Corporate			13
			Reserves			14
			Investments			15
			Appendix to Statistical Supplement			16




			See "Appendix to Statistical Supplement" on page 16 for a summary of significant items and page 16.1 for a reconciliation of our non-GAAP financial measures.

			N.M. = not a meaningful percentage

Unum Group Financial Highlights


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Consolidated U.S. GAAP Results¹
Premium Income	$	2,352.6		$	2,263.3		$	9,365.6		$	8,986.1		$	8,597.1

Adjusted Operating Revenue	$	3,025.4		$	2,922.2		$	12,022.1		$	11,638.0		$	11,246.5
Net Realized Investment Gain (Loss)	9.2			(41.4)			(23.2)			(39.5)			40.3

Revenue	$	3,034.6		$	2,880.8		$	11,998.9		$	11,598.5		$	11,286.8

Net Income	$	296.2		$	249.1		$	1,100.3		$	523.4		$	994.2
Net Income Per Common Share:
Basic	$	1.44		$	1.15		$	5.25		$	2.38		$	4.39
Assuming Dilution	$	1.44		$	1.15		$	5.24		$	2.38		$	4.37

Assets							$	67,013.4		$	61,875.6		$	64,013.1
Stockholders' Equity							$	9,965.0		$	8,621.8		$	9,574.9

Adjusted Operating Return on Equity
Unum US	18.4		%	17.8		%	18.0		%	18.4		%	15.9		%
Unum International	8.2		%	14.9		%	11.7		%	13.4		%	15.2		%
Colonial Life	17.9		%	17.7		%	17.5		%	18.0		%	16.2		%
Core Operating Segments	17.2		%	17.5		%	17.2		%	17.8		%	15.9		%
Consolidated	12.8		%	13.0		%	12.8		%	13.2		%	11.6		%




Traditional U.S. Life Insurance Companies' Statutory Results²
Net Gain from Operations, After Tax	$	265.6	$	215.2	$	1,027.2	$	959.8	$	812.4
Net Realized Investment Gain (Loss), After Tax	(2.8)		(15.5)		(45.1)		(6.8)		(5.0)

Net Income	$	262.8	$	199.7	$	982.1	$	953.0	$	807.4

Capital and Surplus					$	3,644.4	$	3,572.7	$	3,448.3

Weighted Average Risk-based Capital Ratio					~ 365%		~ 370%		~ 390%

¹Generally Accepted Accounting Principles

²Our 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, Unum Insurance Company, and Starmount Life Insurance Company.

Unum Group Capital Metrics


	12/31/2019						12/31/2018						12/31/2017
	(in millions)		per share		(in millions)		per share		(in millions)		per share
Total Stockholders' Equity (Book Value)	$	9,965.0	$	49.10	$	8,621.8	$	40.19	$	9,574.9	$	43.02
Excluding:
Net Unrealized Gain (Loss) on Securities	615.9		3.03		(312.4)		(1.46)		607.8		2.73
Net Gain on Hedges	187.8		0.93		250.6		1.17		282.3		1.27
Subtotal	9,161.3		45.14		8,683.6		40.48		8,684.8		39.02
Excluding:
Foreign Currency Translation Adjustment	(281.6)		(1.39)		(305.2)		(1.42)		(254.5)		(1.15)
Subtotal	9,442.9		46.53		8,988.8		41.90		8,939.3		40.17
Excluding:
Unrecognized Pension and Postretirement Benefit Costs	(484.8)		(2.39)		(447.2)		(2.08)		(508.1)		(2.28)
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (Loss)	$	9,927.7	$	48.92	$	9,436.0	$	43.98	$	9,447.4	$	42.45

Dividends Paid	$	231.3	$	1.09	$	217.0	$	0.98	$	196.0	$	0.86


	Three Months Ended							Year Ended
	12/31/2019		12/31/2018		12/31/2019			12/31/2018			12/31/2017
Shares Repurchased (millions)	3.3		4.3		12.3			8.7			8.2
Cost of Shares Repurchased (millions)⁽¹⁾	$	100.1	$	150.4	$	400.4		$	350.7		$	400.4
Price (UNM closing price on last trading day of period)					$	29.16		$	29.38		$	54.89

Leverage Ratio					29.1		%	26.8		%	26.1		%

Holding Company Cash and Marketable Securities					$	863		$	602		$	864

⁽¹⁾Includes commissions of $0.4 million, $0.7 million, and $0.3 million for the years ended December 31, 2019, 2018, and 2017, respectively, $0.1 million for the three months ended December 31, 2019, and $0.5 million for the three months ended December 31, 2018.

Unum Group Ratings

AM Best

Fitch

Moody's

S&P

Outlook

Stable

Negative

Stable

Issuer Credit Ratings

bbb

BBB

Baa2

BBB

Financial Strength Ratings

Provident Life and Accident Insurance Company

Unum Life Insurance Company of America

Colonial Life & Accident Insurance Company

The Paul Revere Life Insurance Company

Starmount Life Insurance Company

A-

Unum Insurance Company

A-

Unum Limited

A-

NR = not rated

Unum Group Consolidated Statements of Income


	Three Months Ended						Year Ended
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2017
Revenue
Premium Income	$	2,352.6	$	2,263.3	$	9,365.6	$	8,986.1	$	8,597.1
Net Investment Income	616.3		608.6		2,435.3		2,453.7		2,451.7
Net Realized Investment Gain (Loss)	9.2		(41.4)		(23.2)		(39.5)		40.3
Other Income	56.5		50.3		221.2		198.2		197.7
Total Revenue	3,034.6		2,880.8		11,998.9		11,598.5		11,286.8

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	1,881.3		1,829.5		7,496.2		8,020.4		7,055.7
Commissions	270.3		275.8		1,122.7		1,108.4		1,060.8
Interest and Debt Expense - Non-recourse Debt	1.1		1.7		5.3		6.9		6.7
Interest and Debt Expense - All Other Debt	45.5		40.3		172.1		160.4		153.2
Cost Related to Early Retirement of Debt	2.1		—		27.3		—		—
Deferral of Acquisition Costs	(154.0)		(166.2)		(658.6)		(668.0)		(628.0)
Amortization of Deferred Acquisition Costs	141.4		136.9		609.9		565.5		527.1

Other Expenses	469.5		453.1		1,841.9		1,777.1		1,707.3
Total Benefits and Expenses	2,657.2		2,571.1		10,616.8		10,970.7		9,882.8

Income Before Income Tax	377.4		309.7		1,382.1		627.8		1,404.0
Income Tax	81.2		60.6		281.8		104.4		409.8

Net Income	$	296.2	$	249.1	$	1,100.3	$	523.4	$	994.2

Weighted Average Shares Outstanding
Basic	205.6		217.0		209.7		219.6		226.5
Assuming Dilution	205.7		217.4		209.9		220.1		227.3

Actual Number of Shares Outstanding					202.9		214.6		222.5

Unum Group Sales Data for Unum US Segment


	Three Months Ended										Year Ended
	12/31/2019		12/31/2018		% Change		12/31/2019		12/31/2018		12/31/2017
Sales by Product
Group Disability and Group Life and AD&D
Group Long-term Disability	$	132.1	$	147.3	(10.3)	%	$	241.5	$	243.8	$	240.8
Group Short-term Disability	81.2		80.9		0.4		159.2		138.7		162.5
Group Life and AD&D	133.0		153.9		(13.6)		258.3		282.4		310.5
Subtotal	346.3		382.1		(9.4)		659.0		664.9		713.8
Supplemental and Voluntary
Individual Disability	19.3		20.3		(4.9)		75.9		77.2		67.9
Voluntary Benefits	47.6		54.1		(12.0)		300.6		303.1		292.5
Dental and Vision	35.2		33.1		6.3		74.6		69.4		54.8
Subtotal	102.1		107.5		(5.0)		451.1		449.7		415.2
Total Sales	$	448.4	$	489.6	(8.4)		$	1,110.1	$	1,114.6	$	1,129.0

Sales by Market Sector
Group Disability and Group Life and AD&D
Core Market (< 2,000 employees)	$	183.7	$	203.4	(9.7)	%	$	370.8	$	395.1	$	416.9
Large Case Market	162.6		178.7		(9.0)		288.2		269.8		296.9
Subtotal	346.3		382.1		(9.4)		659.0		664.9		713.8
Supplemental and Voluntary	102.1		107.5		(5.0)		451.1		449.7		415.2
Total Sales	$	448.4	$	489.6	(8.4)		$	1,110.1	$	1,114.6	$	1,129.0

Unum Group Sales Data for Unum International Segment


	Three Months Ended										Year Ended
(in millions of dollars)	12/31/2019		12/31/2018		% Change		12/31/2019		12/31/2018		12/31/2017
Sales by Product
Unum UK
Group Long-term Disability	$	14.7	$	12.2	20.5	%	$	43.2	$	44.7	$	47.1
Group Life	6.4		5.7		12.3		24.3		21.5		24.4
Supplemental	3.3		3.4		(2.9)		19.5		17.4		14.4
Unum Poland	3.7		3.4		8.8		13.0		3.4		—
Total Sales	$	28.1	$	24.7	13.8		$	100.0	$	87.0	$	85.9

Sales by Market Sector
Unum UK
Group Long-term Disability and Group Life
Core Market (< 500 employees)	$	11.0	$	10.3	6.8	%	$	38.2	$	36.6	$	30.4
Large Case Market	10.1		7.6		32.9		29.3		29.6		41.1
Subtotal	21.1		17.9		17.9		67.5		66.2		71.5
Supplemental	3.3		3.4		(2.9)		19.5		17.4		14.4
Unum Poland	3.7		3.4		8.8		13.0		3.4		—
Total Sales	$	28.1	$	24.7	13.8		$	100.0	$	87.0	$	85.9

(in millions of pounds)
Unum UK Sales by Product
Group Long-term Disability	£	11.4	£	9.5	20.0	%	£	33.7	£	33.5	£	36.6
Group Life	5.0		4.5		11.1		19.0		16.2		18.9
Supplemental	2.5		2.6		(3.8)		15.1		12.8		11.3
Total Sales	£	18.9	£	16.6	13.9		£	67.8	£	62.5	£	66.8

Unum UK Sales by Market Sector
Group Long-term Disability and Group Life
Core Market (< 500 employees)	£	8.6	£	8.1	6.2	%	£	29.9	£	27.6	£	23.6
Large Case Market	7.8		5.9		32.2		22.8		22.1		31.9
Subtotal	16.4		14.0		17.1		52.7		49.7		55.5
Supplemental	2.5		2.6		(3.8)		15.1		12.8		11.3
Total Sales	£	18.9	£	16.6	13.9		£	67.8	£	62.5	£	66.8

Certain prior year and prior period amounts in the table above were reclassified to conform to current year presentation.

5. 1

Unum Group Sales Data for Colonial Life Segment


	Three Months Ended										Year Ended
	12/31/2019		12/31/2018		% Change		12/31/2019		12/31/2018		12/31/2017
Sales by Product
Accident, Sickness, and Disability	$	122.4	$	127.7	(4.2)	%	$	354.4	$	355.0	$	323.2
Life	53.3		38.8		37.4		122.7		111.9		107.7
Cancer and Critical Illness	34.0		37.9		(10.3)		88.9		94.4		88.8
Total Sales	$	209.7	$	204.4	2.6		$	566.0	$	561.3	$	519.7

Sales by Market Sector
Commercial
Core Market (< 1,000 employees)	$	119.1	$	119.0	0.1	%	$	345.7	$	349.0	$	313.5
Large Case Market	30.5		42.9		(28.9)		81.4		95.5		90.9
Subtotal	149.6		161.9		(7.6)		427.1		444.5		404.4
Public Sector	60.1		42.5		41.4		138.9		116.8		115.3
Total Sales	$	209.7	$	204.4	2.6		$	566.0	$	561.3	$	519.7

5. 2

Unum Group Consolidated Balance Sheets


	December 31
	2019		2018

Assets

Investments
Fixed Maturity Securities	$	47,443.7	$	43,011.7
Mortgage Loans	2,397.0		2,295.0
Policy Loans	3,779.5		3,729.9
Other Long-term Investments	844.2		702.9
Short-term Investments	1,294.5		968.1
Total Investments	55,758.9		50,707.6

Other Assets
Cash and Bank Deposits	84.1		94.0
Accounts and Premiums Receivable	1,602.9		1,615.5
Reinsurance Recoverable	4,780.7		4,662.4
Accrued Investment Income	693.0		690.6
Deferred Acquisition Costs	2,324.0		2,309.4
Goodwill	351.7		350.3
Property and Equipment	534.1		546.9
Deferred Income Tax	—		109.9
Other Assets	884.0		789.0

Total Assets	$	67,013.4	$	61,875.6

Unum Group Consolidated Balance Sheets - Continued


	December 31
	2019		2018

Liabilities and Stockholders' Equity

Liabilities
Policy and Contract Benefits	$	1,745.5	$	1,695.7
Reserves for Future Policy and Contract Benefits	47,780.1		44,841.9
Unearned Premiums	363.9		363.3
Other Policyholders’ Funds	1,599.7		1,594.8
Income Tax Payable	256.7		24.0
Deferred Income Tax	95.4		—
Short-term Debt	399.7		—
Long-term Debt - Non-recourse	78.1		137.1
Long-term Debt - All Other	2,848.8		2,834.2
Other Liabilities	1,880.5		1,762.8

Total Liabilities	57,048.4		53,253.8

Stockholders’ Equity
Common Stock	30.6		30.5
Additional Paid-in Capital	2,348.1		2,321.7
Accumulated Other Comprehensive Income (Loss)	37.3		(814.2)
Retained Earnings	10,728.7		9,863.1
Treasury Stock	(3,179.7)		(2,779.3)

Total Stockholders’ Equity	9,965.0		8,621.8

Total Liabilities and Stockholders’ Equity	$	67,013.4	$	61,875.6

6. 1

Unum Group Deferred Acquisition Costs by Segment


	Unum US		Unum International		Colonial Life		Consolidated
Balances at December 31, 2016	$	1,176.5	$	21.4	$	896.3	$	2,094.2
Capitalization	325.5		7.0		295.5		628.0
Amortization	(293.6)		(9.1)		(224.4)		(527.1)
Adjustment Related to Unrealized Investment Gains and Losses	(3.0)		—		(9.5)		(12.5)
Foreign Currency	—		2.0		—		2.0
Balances at December 31, 2017	1,205.4		21.3		957.9		2,184.6
Capitalization	344.0		8.1		315.9		668.0
Amortization	(315.1)		(8.2)		(242.2)		(565.5)
Adjustment Related to Unrealized Investment Gains and Losses	5.1		—		18.4		23.5
Foreign Currency	—		(1.2)		—		(1.2)
Balances at December 31, 2018	1,239.4		20.0		1,050.0		2,309.4
Capitalization	334.5		12.8		311.3		658.6
Amortization	(344.0)		(7.1)		(258.8)		(609.9)
Adjustment Related to Unrealized Investment Gains and Losses	(6.9)		—		(27.9)		(34.8)
Foreign Currency	—		0.7		—		0.7
Balances at December 31, 2019	$	1,223.0	$	26.4	$	1,074.6	$	2,324.0

6. 2

Unum Group Balance Sheets by Segment - December 31, 2019


	Unum US
	Group Disability		Group Life and Accidental Death & Dismemberment		Supplemental and Voluntary		Total Unum US		Unum International		Colonial Life		Closed Block		Corporate		Consolidated
Assets
Investments	$	8,251.4	$	2,522.8	$	5,233.7	$	16,007.9	$	3,378.1	$	3,281.4	$	31,042.0	$	2,049.5	$	55,758.9
Deferred Acquisition Costs	99.1		79.7		1,044.2		1,223.0		26.4		1,074.6		—		—		2,324.0
Goodwill	8.9		—		271.1		280.0		44.0		27.7		—		—		351.7
All Other	443.4		252.7		379.3		1,075.4		420.6		245.3		5,966.7		870.8		8,578.8
Total Assets	$	8,802.8	$	2,855.2	$	6,928.3	$	18,586.3	$	3,869.1	$	4,629.0	$	37,008.7	$	2,920.3	$	67,013.4

Liabilities
Reserves and Policyholder Benefits	$	7,288.7	$	1,749.8	$	4,219.6	$	13,258.1	$	2,909.4	$	2,711.2	$	32,610.5	$	—	$	51,489.2
Debt	—		—		—		—		—		—		78.1		3,248.5		3,326.6
All Other	128.0		34.2		404.8		567.0		132.6		216.2		13.5		1,303.3		2,232.6
Total Liabilities	7,416.7		1,784.0		4,624.4		13,825.1		3,042.0		2,927.4		32,702.1		4,551.8		57,048.4

Allocated Stockholders' Equity
Other Allocated Stockholders' Equity	1,363.9		1,033.7		2,114.7		4,512.3		771.9		1,555.2		4,069.3		(1,747.4)		9,161.3
Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges	22.2		37.5		189.2		248.9		55.2		146.4		237.3		115.9		803.7
Total Allocated Stockholders' Equity	1,386.1		1,071.2		2,303.9		4,761.2		827.1		1,701.6		4,306.6		(1,631.5)		9,965.0

Total Liabilities and Allocated Stockholders' Equity	$	8,802.8	$	2,855.2	$	6,928.3	$	18,586.3	$	3,869.1	$	4,629.0	$	37,008.7	$	2,920.3	$	67,013.4

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 our target capital levels for regulatory and rating agency purposes. We modify this formula periodically to recognize changes in the views of capital requirements.

6. 3

Unum Group Balance Sheets by Segment - December 31, 2018


	Unum US
	Group Disability		Group Life and Accidental Death & Dismemberment		Supplemental and Voluntary		Total Unum US		Unum International		Colonial Life		Closed Block		Corporate		Consolidated
Assets
Investments	$	7,984.2	$	2,353.1	$	4,703.2	$	15,040.5	$	3,017.4	$	3,030.8	$	28,481.0	$	1,137.9	$	50,707.6
Deferred Acquisition Costs	100.3		80.0		1,059.1		1,239.4		20.0		1,050.0		—		—		2,309.4
Goodwill	8.9		—		271.1		280.0		42.6		27.7		—		—		350.3
All Other	362.8		260.9		327.3		951.0		346.8		129.4		6,046.6		1,034.5		8,508.3
Total Assets	$	8,456.2	$	2,694.0	$	6,360.7	$	17,510.9	$	3,426.8	$	4,237.9	$	34,527.6	$	2,172.4	$	61,875.6

Liabilities
Reserves and Policyholder Benefits	$	6,961.5	$	1,713.8	$	4,006.5	$	12,681.8	$	2,630.4	$	2,580.4	$	30,603.1	$	—	$	48,495.7
Debt	—		—		—		—		—		—		137.1		2,834.2		2,971.3
All Other	33.1		19.9		215.9		268.9		34.6		63.1		221.8		1,198.4		1,786.8
Total Liabilities	6,994.6		1,733.7		4,222.4		12,950.7		2,665.0		2,643.5		30,962.0		4,032.6		53,253.8

Allocated Stockholders' Equity
Other Allocated Stockholders' Equity	1,464.5		972.0		2,104.4		4,540.9		743.9		1,561.9		3,615.1		(1,778.2)		8,683.6
Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges	(2.9)		(11.7)		33.9		19.3		17.9		32.5		(49.5)		(82.0)		(61.8)
Total Allocated Stockholders' Equity	1,461.6		960.3		2,138.3		4,560.2		761.8		1,594.4		3,565.6		(1,860.2)		8,621.8

Total Liabilities and Allocated Stockholders' Equity	$	8,456.2	$	2,694.0	$	6,360.7	$	17,510.9	$	3,426.8	$	4,237.9	$	34,527.6	$	2,172.4	$	61,875.6

6. 4

Unum Group Financial Results by Segment

We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of net realized investment gains and losses and certain other items as specified in the following pages. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.


	Three Months Ended										Year Ended
	12/31/2019		12/31/2018		% Change		12/31/2019		12/31/2018		% Change
Premium Income
Unum US	$	1,508.3	$	1,435.1	5.1	%	$	6,016.6	$	5,736.4	4.9	%
Unum International	165.6		152.3		8.7		630.5		568.8		10.8
Colonial Life	424.9		410.1		3.6		1,685.0		1,603.8		5.1
Closed Block	253.8		265.8		(4.5)		1,033.5		1,077.1		(4.0)
	2,352.6		2,263.3		3.9		9,365.6		8,986.1		4.2
Net Investment Income
Unum US	189.0		187.7		0.7		739.4		778.7		(5.0)
Unum International	28.6		31.1		(8.0)		122.5		117.2		4.5
Colonial Life	37.0		37.0		—		148.0		151.2		(2.1)
Closed Block	356.6		345.8		3.1		1,404.9		1,377.1		2.0
Corporate	5.1		7.0		(27.1)		20.5		29.5		(30.5)
	616.3		608.6		1.3		2,435.3		2,453.7		(0.7)
Other Income
Unum US	36.7		30.0		22.3		142.8		118.5		20.5
Unum International	0.3		0.4		(25.0)		0.6		0.4		50.0
Colonial Life	1.2		0.2		N.M.		3.4		1.2		183.3
Closed Block	17.8		18.6		(4.3)		71.3		75.4		(5.4)
Corporate	0.5		1.1		(54.5)		3.1		2.7		14.8
	56.5		50.3		12.3		221.2		198.2		11.6
Total Adjusted Operating Revenue
Unum US	1,734.0		1,652.8		4.9		6,898.8		6,633.6		4.0
Unum International	194.5		183.8		5.8		753.6		686.4		9.8
Colonial Life	463.1		447.3		3.5		1,836.4		1,756.2		4.6
Closed Block	628.2		630.2		(0.3)		2,509.7		2,529.6		(0.8)
Corporate	5.6		8.1		(30.9)		23.6		32.2		(26.7)
	$	3,025.4	$	2,922.2	3.5		$	12,022.1	$	11,638.0	3.3

Unum Group Financial Results by Segment - Continued


	Three Months Ended										Year Ended
	12/31/2019		12/31/2018		% Change		12/31/2019		12/31/2018		% Change
Benefits and Expenses
Unum US	$	1,470.9	$	1,404.1	4.8	%	$	5,867.7	$	5,619.0	4.4	%
Unum International	170.6		153.4		11.2		645.7		572.5		12.8
Colonial Life	375.4		361.9		3.7		1,491.9		1,421.0		5.0
Closed Block	582.1		595.4		(2.2)		2,372.0		3,154.9		(24.8)
Corporate	58.2		56.3		3.4		239.5		203.3		17.8
	2,657.2		2,571.1		3.3		10,616.8		10,970.7		(3.2)

Income (Loss) Before Income Tax and Net Realized Investment Gain (Loss)
Unum US	263.1		248.7		5.8		1,031.1		1,014.6		1.6
Unum International	23.9		30.4		(21.4)		107.9		113.9		(5.3)
Colonial Life	87.7		85.4		2.7		344.5		335.2		2.8
Closed Block	46.1		34.8		32.5		137.7		(625.3)		(122.0)
Corporate	(52.6)		(48.2)		9.1		(215.9)		(171.1)		26.2
	368.2		351.1		4.9		1,405.3		667.3		110.6

Income Tax	79.2		69.4		14.1		286.3		115.4		148.1

Income Before Net Realized Investment Gain (Loss)	289.0		281.7		2.6		1,119.0		551.9		102.8

Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $2.0; $(8.8); $(4.5); $(11.0))	7.2		(32.6)		N.M.		(18.7)		(28.5)		34.4

Net Income	$	296.2	$	249.1	18.9		$	1,100.3	$	523.4	110.2

7. 1

Unum Group Quarterly Historical Financial Results by Segment


	12/31/19		9/30/19		6/30/19		3/31/19		12/31/18		9/30/18		6/30/18		3/31/18		12/31/17
Premium Income
Unum US	$	1,508.3	$	1,501.9	$	1,504.5	$	1,501.9	$	1,435.1	$	1,446.2	$	1,416.3	$	1,438.8	$	1,364.5
Unum International	165.6		152.3		158.6		154.0		152.3		138.0		138.9		139.6		133.4
Colonial Life	424.9		419.9		420.9		419.3		410.1		400.0		395.4		398.3		382.1
Closed Block	253.8		257.1		259.1		263.5		265.8		267.6		270.4		273.3		278.4
	2,352.6		2,331.2		2,343.1		2,338.7		2,263.3		2,251.8		2,221.0		2,250.0		2,158.4
Net Investment Income
Unum US	189.0		184.2		184.1		182.1		187.7		200.3		196.5		194.2		202.1
Unum International	28.6		24.3		44.8		24.8		31.1		26.4		32.1		27.6		31.9
Colonial Life	37.0		36.9		37.2		36.9		37.0		36.7		40.2		37.3		37.1
Closed Block	356.6		347.3		354.5		346.6		345.8		348.0		345.6		337.7		341.5
Corporate	5.1		6.7		4.3		4.3		7.0		7.8		9.2		5.5		7.2
	616.3		599.4		624.9		594.7		608.6		619.2		623.6		602.3		619.8
Other Income
Unum US	36.7		34.8		36.8		34.5		30.0		30.7		28.8		29.0		27.9
Unum International	0.3		—		0.3		—		0.4		—		—		—		0.1
Colonial Life	1.2		0.9		0.7		0.6		0.2		0.4		0.3		0.3		0.3
Closed Block	17.8		18.9		16.5		18.0		18.6		18.9		18.9		19.0		19.9
Corporate	0.5		1.0		1.7		—		1.1		0.1		0.3		1.2		1.4
	56.5		55.6		56.0		53.1		50.3		50.1		48.3		49.5		49.6
Total Adjusted Operating Revenue
Unum US	1,734.0		1,720.9		1,725.4		1,718.5		1,652.8		1,677.2		1,641.6		1,662.0		1,594.5
Unum International	194.5		176.6		203.7		178.8		183.8		164.4		171.0		167.2		165.4
Colonial Life	463.1		457.7		458.8		456.8		447.3		437.1		435.9		435.9		419.5
Closed Block	628.2		623.3		630.1		628.1		630.2		634.5		634.9		630.0		639.8
Corporate	5.6		7.7		6.0		4.3		8.1		7.9		9.5		6.7		8.6
	$	3,025.4	$	2,986.2	$	3,024.0	$	2,986.5	$	2,922.2	$	2,921.1	$	2,892.9	$	2,901.8	$	2,827.8

Unum Group Quarterly Historical Financial Results by Segment - Continued


	12/31/19		9/30/19		6/30/19		3/31/19		12/31/18		9/30/18		6/30/18		3/31/18		12/31/17
Benefits and Expenses
Unum US	$	1,470.9	$	1,459.5	$	1,471.1	$	1,466.2	$	1,404.1	$	1,406.3	$	1,390.5	$	1,418.1	$	1,356.9
Unum International	170.6		152.4		173.0		149.7		153.4		138.3		143.4		137.4		135.7
Colonial Life	375.4		370.5		374.4		371.6		361.9		352.9		351.3		354.9		352.8
Closed Block	582.1		596.4		596.4		597.1		595.4		1,353.1		605.3		601.1		606.7
Corporate	58.2		81.8		49.8		49.7		56.3		55.0		45.0		47.0		41.8
	2,657.2		2,660.6		2,664.7		2,634.3		2,571.1		3,305.6		2,535.5		2,558.5		2,493.9

Income (Loss) Before Income Tax Expense (Benefit) and Net Realized Investment Gain (Loss)
Unum US	263.1		261.4		254.3		252.3		248.7		270.9		251.1		243.9		237.6
Unum International	23.9		24.2		30.7		29.1		30.4		26.1		27.6		29.8		29.7
Colonial Life	87.7		87.2		84.4		85.2		85.4		84.2		84.6		81.0		66.7
Closed Block	46.1		26.9		33.7		31.0		34.8		(718.6)		29.6		28.9		33.1
Corporate	(52.6)		(74.1)		(43.8)		(45.4)		(48.2)		(47.1)		(35.5)		(40.3)		(33.2)
	368.2		325.6		359.3		352.2		351.1		(384.5)		357.4		343.3		333.9

Income Tax Expense (Benefit)	79.2		62.8		72.4		71.9		69.4		(92.0)		69.8		68.2		74.2

Income (Loss) Before Net Realized Investment Gain (Loss)	289.0		262.8		286.9		280.3		281.7		(292.5)		287.6		275.1		259.7

Net Realized Investment Gain (Loss)	9.2		(26.2)		(7.3)		1.1		(41.4)		6.7		(2.6)		(2.2)		11.4
Tax Expense (Benefit) on Net Realized Investment Gain (Loss)	2.0		(5.4)		(1.6)		0.5		(8.8)		(1.1)		(0.5)		(0.6)		4.2



Net Income (Loss)	$	296.2	$	242.0	$	281.2	$	280.9	$	249.1	$	(284.7)	$	285.5	$	273.5	$	266.9

Net Income (Loss) Per Common Share - Assuming Dilution	$	1.44	$	1.16	$	1.33	$	1.31	$	1.15	$	(1.30)	$	1.29	$	1.23	$	1.19

8. 1

Unum Group Financial Results for Unum US Segment


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income	$	1,508.3		$	1,435.1		$	6,016.6		$	5,736.4		$	5,443.5
Net Investment Income	189.0			187.7			739.4			778.7			811.2
Other Income	36.7			30.0			142.8			118.5			113.2
Total	1,734.0			1,652.8			6,898.8			6,633.6			6,367.9

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	1,015.1			970.6			4,022.1			3,856.5			3,693.4
Commissions	152.9			153.1			628.5			620.6			590.8
Deferral of Acquisition Costs	(82.6)			(84.9)			(334.5)			(344.0)			(325.5)
Amortization of Deferred Acquisition Costs	77.2			73.7			344.0			315.1			293.6
Other Expenses	308.3			291.6			1,207.6			1,170.8			1,132.7
Total	1,470.9			1,404.1			5,867.7			5,619.0			5,385.0

Income Before Income Tax and Net Realized Investment Gains and Losses	263.1			248.7			1,031.1			1,014.6			982.9
Unclaimed Death Benefits (UDB) Reserve Increase	—			—			—			—			26.6

Adjusted Operating Income	$	263.1		$	248.7		$	1,031.1		$	1,014.6		$	1,009.5

Operating Ratios (% of Premium Income):
Benefit Ratio	67.3		%	67.6		%	66.9		%	67.2		%	67.8		%
Benefit Ratio Excluding UDB Reserve Increase													67.4		%
Other Expense Ratio	20.4		%	20.3		%	20.1		%	20.4		%	20.8		%
Income Ratio													18.1		%
Adjusted Operating Income Ratio	17.4		%	17.3		%	17.1		%	17.7		%	18.5		%

Unum Group Financial Results for Unum US Group Disability


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Group Long-term Disability	$	459.4		$	443.5		$	1,823.1		$	1,766.2		$	1,749.6
Group Short-term Disability	198.1			178.6			768.8			706.3			639.8
Total Premium Income	657.5			622.1			2,591.9			2,472.5			2,389.4
Net Investment Income	103.1			102.7			401.5			432.7			460.5
Other Income	34.5			28.1			133.8			109.0			98.3
Total	795.1			752.9			3,127.2			3,014.2			2,948.2

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	486.8			473.9			1,927.9			1,880.7			1,828.5
Commissions	46.5			45.5			193.8			186.5			181.9
Deferral of Acquisition Costs	(12.1)			(11.4)			(49.5)			(48.2)			(46.9)
Amortization of Deferred Acquisition Costs	12.5			11.1			50.7			44.7			39.9
Other Expenses	178.4			153.1			672.1			612.2			587.0
Total	712.1			672.2			2,795.0			2,675.9			2,590.4

Adjusted Operating Income	$	83.0		$	80.7		$	332.2		$	338.3		$	357.8

Operating Ratios (% of Premium Income):
Benefit Ratio	74.0		%	76.2		%	74.4		%	76.1		%	76.5		%
Other Expense Ratio	27.1		%	24.6		%	25.9		%	24.8		%	24.6		%
Adjusted Operating Income Ratio	12.6		%	13.0		%	12.8		%	13.7		%	15.0		%

Persistency:
Group Long-term Disability							90.7		%	90.9		%	89.9		%
Group Short-term Disability							89.8		%	87.2		%	86.6		%

9. 1

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


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Group Life	$	412.6		$	394.1		$	1,662.0		$	1,583.7		$	1,467.5
Accidental Death & Dismemberment	41.5			39.4			165.7			156.3			147.5
Total Premium Income	454.1			433.5			1,827.7			1,740.0			1,615.0
Net Investment Income	27.8			26.1			107.4			106.5			109.9
Other Income	0.7			1.3			2.7			4.7			4.8
Total	482.6			460.9			1,937.8			1,851.2			1,729.7

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	325.6			310.6			1,314.1			1,237.7			1,169.8
Commissions	36.0			34.6			147.7			141.1			131.3
Deferral of Acquisition Costs	(9.0)			(8.8)			(37.8)			(38.2)			(36.2)
Amortization of Deferred Acquisition Costs	10.2			8.9			38.1			35.9			31.9
Other Expenses	51.6			51.3			209.0			214.6			217.4
Total	414.4			396.6			1,671.1			1,591.1			1,514.2

Income Before Income Tax and Net Realized Investment Gains and Losses	68.2			64.3			266.7			260.1			215.5
UDB Reserve Increase	—			—			—			—			18.5

Adjusted Operating Income	$	68.2		$	64.3		$	266.7		$	260.1		$	234.0

Operating Ratios (% of Premium Income):
Benefit Ratio	71.7		%	71.6		%	71.9		%	71.1		%	72.4		%
Benefit Ratio Excluding UDB Reserve Increase													71.3		%
Other Expense Ratio	11.4		%	11.8		%	11.4		%	12.3		%	13.5		%
Income Ratio													13.3		%
Adjusted Operating Income Ratio	15.0		%	14.8		%	14.6		%	14.9		%	14.5		%

Persistency:
Group Life							90.6		%	91.2		%	88.0		%
Accidental Death & Dismemberment							89.9		%	89.9		%	87.2		%

9. 2

Unum Group Financial Results for Unum US Supplemental and Voluntary


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Individual Disability	$	112.3		$	106.3		$	440.7		$	425.4		$	420.2
Voluntary Benefits	221.0			219.7			910.2			895.7			849.4
Dental and Vision	63.4			53.5			246.1			202.8			169.5
Total Premium Income	396.7			379.5			1,597.0			1,523.9			1,439.1
Net Investment Income	58.1			58.9			230.5			239.5			240.8
Other Income	1.5			0.6			6.3			4.8			10.1
Total	456.3			439.0			1,833.8			1,768.2			1,690.0

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	202.7			186.1			780.1			738.1			695.1
Commissions	70.4			73.0			287.0			293.0			277.6
Deferral of Acquisition Costs	(61.5)			(64.7)			(247.2)			(257.6)			(242.4)
Amortization of Deferred Acquisition Costs	54.5			53.7			255.2			234.5			221.8
Other Expenses	78.3			87.2			326.5			344.0			328.3
Total	344.4			335.3			1,401.6			1,352.0			1,280.4

Income Before Income Tax and Net Realized Investment Gains and Losses	111.9			103.7			432.2			416.2			409.6
UDB Reserve Increase	—			—			—			—			8.1
Adjusted Operating Income	$	111.9		$	103.7		$	432.2		$	416.2		$	417.7

Operating Ratios (% of Premium Income):
Benefit Ratios:
Individual Disability	50.6		%	51.2		%	50.9		%	50.6		%	47.2		%
Voluntary Benefits	45.6		%	43.6		%	41.8		%	42.8		%	44.6		%
Voluntary Benefits Excluding UDB Reserve Increase													43.6		%
Dental and Vision	71.1		%	67.3		%	71.1		%	68.5		%	69.6		%
Other Expense Ratio	19.7		%	23.0		%	20.4		%	22.6		%	22.8		%
Income Ratio													28.5		%
Adjusted Operating Income Ratio	28.2		%	27.3		%	27.1		%	27.3		%	29.0		%

Persistency:
Individual Disability							89.8		%	90.3		%	91.0		%
Voluntary Benefits							73.2		%	75.9		%	77.5		%
Dental and Vision							82.6		%	84.5		%	85.4		%

9. 3

Unum Group Financial Results for Unum International Segment


	Three Months Ended						Year Ended
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2017
Adjusted Operating Revenue
Premium Income
Unum UK
Group Long-term Disability	$	91.1	$	87.1	$	353.4	$	358.9	$	340.3
Group Life	31.8		27.2		115.7		110.8		103.1
Supplemental	23.8		20.6		89.5		81.7		69.6
Unum Poland	18.9		17.4		71.9		17.4		—
Total Premium Income	165.6		152.3		630.5		568.8		513.0
Net Investment Income	28.6		31.1		122.5		117.2		120.2
Other Income	0.3		0.4		0.6		0.4		0.7
Total	194.5		183.8		753.6		686.4		633.9

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	123.4		110.3		469.8		419.8		381.9
Commissions	13.5		11.0		48.7		39.1		35.5
Deferral of Acquisition Costs	(3.3)		(2.8)		(12.8)		(8.1)		(7.0)
Amortization of Deferred Acquisition Costs	1.7		2.0		7.1		8.2		9.1
Other Expenses	35.3		32.9		132.9		113.5		102.7
Total	170.6		153.4		645.7		572.5		522.2

Adjusted Operating Income	$	23.9	$	30.4	$	107.9	$	113.9	$	111.7

Certain prior year and prior period amounts in the table above were reclassified to conform to current year presentation.

Unum Group Financial Results for Unum UK


	Three Months Ended									Year Ended
(in millions of pounds, except exchange rate)	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Group Long-term Disability	£	70.8		£	67.8		£	276.8		£	269.0		£	264.0
Group Life	24.7			21.1			90.7			83.0			80.0
Supplemental	18.4			16.0			70.0			61.3			53.9
Total Premium Income	113.9			104.9			437.5			413.3			397.9
Net Investment Income	20.9			22.9			90.5			86.5			93.3
Other Income	0.1			—			0.2			—			0.5
Total	134.9			127.8			528.2			499.8			491.7

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	88.0			78.3			335.5			307.4			296.2
Commissions	8.0			6.3			28.6			27.1			27.6
Deferral of Acquisition Costs	(1.4)			(1.1)			(5.4)			(5.0)			(5.4)
Amortization of Deferred Acquisition Costs	1.3			1.5			5.4			6.1			7.0
Other Expenses	21.6			20.6			83.7			80.2			79.7
Total	117.5			105.6			447.8			415.8			405.1

Adjusted Operating Income	£	17.4		£	22.2		£	80.4		£	84.0		£	86.6

Weighted Average Pound/Dollar Exchange Rate	1.287			1.293			1.279			1.336			1.290

Operating Ratios (% of Premium Income):
Benefit Ratio	77.3		%	74.6		%	76.7		%	74.4		%	74.4		%
Other Expense Ratio	19.0		%	19.6		%	19.1		%	19.4		%	20.0		%
Adjusted Operating Income Ratio	15.3		%	21.2		%	18.4		%	20.3		%	21.8		%

Persistency:
Group Long-term Disability							89.9		%	87.8		%	87.4		%
Group Life							89.0		%	88.5		%	84.1		%
Supplemental							89.9		%	93.1		%	91.0		%

10. 1

Unum Group Financial Results for Colonial Life Segment


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Accident, Sickness, and Disability	$	245.8		$	237.5		$	973.4		$	929.3		$	884.2
Life	89.0			84.5			351.6			328.4			300.4
Cancer and Critical Illness	90.1			88.1			360.0			346.1			326.8
Total Premium Income	424.9			410.1			1,685.0			1,603.8			1,511.4
Net Investment Income	37.0			37.0			148.0			151.2			144.9
Other Income	1.2			0.2			3.4			1.2			1.1
Total	463.1			447.3			1,836.4			1,756.2			1,657.4

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	218.8			211.5			865.0			824.9			788.6
Commissions	84.2			90.9			364.5			364.6			344.5
Deferral of Acquisition Costs	(68.1)			(78.5)			(311.3)			(315.9)			(295.5)
Amortization of Deferred Acquisition Costs	62.5			61.2			258.8			242.2			224.4
Other Expenses	78.0			76.8			314.9			305.2			282.8
Total	375.4			361.9			1,491.9			1,421.0			1,344.8

Income Before Income Tax and Net Realized Investment Gains and Losses	87.7			85.4			344.5			335.2			312.6
UDB Reserve Increase	—			—			—			—			12.4
Adjusted Operating Income	$	87.7		$	85.4		$	344.5		$	335.2		$	325.0

Operating Ratios (% of Premium Income):
Benefit Ratio	51.5		%	51.6		%	51.3		%	51.4		%	52.2		%
Benefit Ratio Excluding UDB Reserve Increase													51.4		%
Other Expense Ratio	18.4		%	18.7		%	18.7		%	19.0		%	18.7		%
Income Ratio													20.7		%
Adjusted Operating Income Ratio	20.6		%	20.8		%	20.4		%	20.9		%	21.5		%

Persistency:
Accident, Sickness, and Disability							73.2		%	74.2		%	75.1		%
Life							83.4		%	83.6		%	84.4		%
Cancer and Critical Illness							80.6		%	82.4		%	82.7		%

Unum Group Financial Results for Closed Block Segment


	Three Months Ended									Year Ended
	12/31/2019			12/31/2018			12/31/2019			12/31/2018			12/31/2017
Adjusted Operating Revenue
Premium Income
Long-term Care	$	162.4		$	162.5		$	651.6		$	648.3		$	648.7
Individual Disability	90.4			101.8			374.3			420.8			471.8
All Other	1.0			1.5			7.6			8.0			8.7
Total Premium Income	253.8			265.8			1,033.5			1,077.1			1,129.2
Net Investment Income	356.6			345.8			1,404.9			1,377.1			1,354.0
Other Income	17.8			18.6			71.3			75.4			79.8
Total	628.2			630.2			2,509.7			2,529.6			2,563.0

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	524.0			537.1			2,139.3			2,919.2			2,191.8
Commissions	19.7			20.8			81.0			84.1			90.0
Interest and Debt Expense	1.1			1.7			5.3			6.9			6.7
Other Expenses	37.3			35.8			146.4			144.7			150.6
Total	582.1			595.4			2,372.0			3,154.9			2,439.1

Income (Loss) Before Income Tax and Net Realized Investment Gains and Losses	46.1			34.8			137.7			(625.3)			123.9
Long-term Care Reserve Increase	—			—			—			750.8			—
Adjusted Operating Income	$	46.1		$	34.8		$	137.7		$	125.5		$	123.9

Interest Adjusted Loss Ratios:
Long-term Care	86.7		%	83.2		%	88.1		%	206.8		%	91.1		%
Long-term Care Excluding Reserve Increase										91.0		%
Individual Disability	74.7		%	81.2		%	78.8		%	80.4		%	82.4		%

Operating Ratios (% of Premium Income):
Other Expense Ratio	14.7		%	13.5		%	14.2		%	13.4		%	13.3		%
Income (Loss) Ratio										(58.1)		%
Adjusted Operating Income Ratio	18.2		%	13.1		%	13.3		%	11.7		%	11.0		%

Persistency:
Long-term Care							95.7		%	95.8		%	95.9		%
Individual Disability							88.1		%	88.3		%	89.6		%

Unum Group Financial Results for Corporate Segment


	Three Months Ended						Year Ended
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2017
Adjusted Operating Revenue
Net Investment Income	$	5.1	$	7.0	$	20.5	$	29.5	$	21.4
Other Income	0.5		1.1		3.1		2.7		2.9
Total	5.6		8.1		23.6		32.2		24.3

Interest, Debt, and Other Expenses	58.2		56.3		239.5		203.3		191.7

Loss Before Income Tax and Net Realized Investment Gains and Losses	(52.6)		(48.2)		(215.9)		(171.1)		(167.4)
Cost Related to Early Retirement of Debt	2.1		—		27.3		—		—
Loss from Guaranty Fund Assessment	—		—		—		—		20.6
Adjusted Operating Loss	$	(50.5)	$	(48.2)	$	(188.6)	$	(171.1)	$	(146.8)

Unum Group Reserves


	December 31, 2019
	Gross																						Total Reinsurance Ceded
	Policy Reserves					Claim Reserves																Total Net
					%			Incurred			IBNR			%			Total
Group Disability	$	—	—	%		$	5,814.5		$	683.8		28.2	%		$	6,498.3		$	58.3	$	6,440.0
Group Life and Accidental Death & Dismemberment	59.9		0.3			721.1			234.2			4.1			1,015.2			6.2		1,009.0
Individual Disability	499.0		2.4			1,391.1			140.3			6.6			2,030.4			217.2		1,813.2
Voluntary Benefits	1,700.1		8.2			45.8			51.4			0.4			1,797.3			26.1		1,771.2
Dental and Vision	—		—			—			15.4			0.1			15.4			0.2		15.2
Unum US Segment	2,259.0		10.9			7,972.5			1,125.1			39.4			11,356.6			308.0		11,048.6

Unum International Segment	186.5		0.9			1,986.4			110.0			9.1			2,282.9			87.6		2,195.3

Colonial Life Segment	2,229.0		10.8			297.4			113.2			1.8			2,639.6			6.2		2,633.4

Individual Disability	258.8		1.3			8,724.1			172.7			38.5			9,155.6			1,669.4		7,486.2
Long-term Care	9,864.6		47.8			2,045.2			232.0			9.9			12,141.8			44.7		12,097.1
Other	5,847.9		28.3			177.6			120.5			1.3			6,146.0			5,133.1		1,012.9
Closed Block Segment	15,971.3		77.4			10,946.9			525.2			49.7			27,443.4			6,847.2		20,596.2

Subtotal	$	20,645.8	100.0	%		$	21,203.2		$	1,873.5		100.0	%		43,722.5			7,249.0		36,473.5

Adjustment Related to Unrealized Investment Gains and Losses															5,803.1			424.7		5,378.4

Consolidated															$	49,525.6		$	7,673.7	$	41,851.9

The adjustment related to unrealized investment gains and losses reflects the changes that would be necessary to policyholder liabilities if the unrealized investment gains and losses related to the corresponding available-for-sale securities had been realized. Changes in this adjustment are primarily due to movements in credit spreads and U.S. Treasury rates.

Unum Group Reserves


	December 31, 2018
	Gross																						Total Reinsurance Ceded
	Policy Reserves					Claim Reserves																Total Net
					%			Incurred			IBNR			%			Total
Group Disability	$	—	—	%		$	5,900.0		$	670.8		28.4	%		$	6,570.8		$	71.0	$	6,499.8
Group Life and Accidental Death & Dismemberment	52.9		0.3			750.7			217.8			4.2			1,021.4			7.1		1,014.3
Individual Disability	518.4		2.6			1,357.8			137.1			6.4			2,013.3			217.1		1,796.2
Voluntary Benefits	1,643.9		8.1			49.0			58.1			0.5			1,751.0			27.1		1,723.9
Dental and Vision	—		—			0.1			14.5			0.2			14.6			0.2		14.4
Unum US Segment	2,215.2		11.0			8,057.6			1,098.3			39.7			11,371.1			322.5		11,048.6

Unum International Segment	175.7		0.9			1,838.4			115.0			8.4			2,129.1			84.6		2,044.5

Colonial Life Segment	2,112.5		10.5			292.6			131.4			1.8			2,536.5			8.0		2,528.5

Individual Disability	332.2		1.6			9,085.0			199.6			40.1			9,616.8			1,646.6		7,970.2
Long-term Care	9,463.2		46.9			1,787.6			235.7			8.7			11,486.5			39.9		11,446.6
Other	5,869.5		29.1			187.6			120.2			1.3			6,177.3			5,119.8		1,057.5
Closed Block Segment	15,664.9		77.6			11,060.2			555.5			50.1			27,280.6			6,806.3		20,474.3

Subtotal	$	20,168.3	100.0	%		$	21,248.8		$	1,900.2		100.0	%		43,317.3			7,221.4		36,095.9

Adjustment Related to Unrealized Investment Gains and Losses															3,220.3			261.4		2,958.9

Consolidated															$	46,537.6		$	7,482.8	$	39,054.8

14. 1

Unum Group Investments


	12/31/2019									12/31/2019			12/31/2018
Fixed Maturity Securities (Fair Value)						Selected Statistics
Public	$	31,017.5		65.4	%	Earned Book Yield	5.00		%	5.15		%
Asset-Backed Securities	56.1			0.1		Average Duration (in years)	7.91			7.64
Residential Mortgage-Backed Securities	1,340.6			2.8
Commercial Mortgage-Backed Securities	82.0			0.2
Private Placements	5,937.1			12.5
High Yield	3,188.0			6.7
Government Securities	2,419.4			5.1
Municipal Securities (1)	3,363.4			7.1
Redeemable Preferred Stocks	39.6			0.1
Total	$	47,443.7		100.0	%

	Amortized Cost			Fair Value
Quality Ratings of Fixed Maturity Securities						Schedule BA and Non-Current
Aaa	6.9		%	6.6	%	Total Non-Current Investments	$	30.5		$	36.0
Aa	9.0			9.4		Total Schedule BA Assets	$	675.1		$	575.3
A	27.9			29.1
Baa	48.7			48.2
Below Baa	7.5			6.7
Total	100.0		%	100.0	%


(1) Includes $0.5 million of high yield taxable municipals.

Unum Group Investments at December 31, 2019


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	$	3,298.9	$	331.2	$	94.8	$	9.8	$	3,204.1	$	341.0
Capital Goods	4,418.7		578.5		63.9		0.7		4,354.8		579.2
Communications	3,069.3		519.7		81.7		1.0		2,987.6		520.7
Consumer Cyclical	1,518.7		170.4		42.3		1.9		1,476.4		172.3
Consumer Non-Cyclical	7,256.7		985.2		250.0		20.0		7,006.7		1,005.2
Energy	4,775.4		654.7		290.9		26.7		4,484.5		681.4
Financial Institutions	3,799.3		434.8		46.4		0.5		3,752.9		435.3
Mortgage/Asset-Backed	1,478.7		100.9		50.1		0.4		1,428.6		101.3
Sovereigns	1,017.7		174.2		69.4		1.0		948.3		175.2
Technology	1,898.8		147.4		34.7		12.5		1,864.1		159.9
Transportation	2,414.2		316.0		54.2		0.8		2,360.0		316.8
U.S. Government Agencies and Municipalities	4,765.1		655.9		441.5		7.7		4,323.6		663.6
Public Utilities	7,732.2		1,295.5		205.3		8.2		7,526.9		1,303.7

Total	$	47,443.7	$	6,364.4	$	1,725.2	$	91.2	$	45,718.5	$	6,455.6

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	$	967.7	$	13.8			$	51.8	$	0.5
91 through 180 days	125.7		2.3				72.1		3.1
181 through 270 days	2.8		—				72.9		20.2
271 days to 1 year	—		—				12.0		0.9
Greater than 1 year	115.4		7.4				304.8		43.0
Total	$	1,211.6	$	23.5			$	513.6	$	67.7

15. 1

Appendix to Statistical Supplement

2019 Significant Items

•2019 cost related to the early retirement of debt of $27.3 million before tax and $21.6 million after tax.

•In February 2016, the Financial Accounting Standards Board (FASB) issued an update that changed the accounting and disclosure requirements for leases. These changes include the requirement for lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of lease payments and a corresponding asset, adjusted for certain items, is also recorded. The expense recognition for lessees remained similar to previous accounting requirements for capital and operating leases. We adopted this update effective January 1, 2019 using a modified retrospective approach through a cumulative-effect adjustment as of January 1, 2019 which resulted in a decrease to retained earnings of $3.4 million, an increase to other assets of $117.7 million, a decrease in deferred income tax of $0.4 million, an increase to other liabilities of $122.0 million, and a decrease to income tax payable of $1.3 million.

2018 Significant Items

•In October 2018, we acquired 100 percent of the shares and voting interests in Unum Poland, a financial protection benefits provider in Poland. This acquisition will expand our European presence, which we believe to be an attractive market for financial protection benefits. This acquisition, the results of which are included in our consolidated financial statements for the period subsequent to the date of acquisition, did not have a material impact on revenue, operating results, or sales during 2018.

•Third quarter of 2018 reserve increase of $750.8 million before tax and $593.1 million after tax related to long-term care.

•In January 2016, the FASB issued an update that changed the accounting and disclosure requirements for certain financial instruments. These changes include a requirement to measure equity investments, other than those that result in consolidation or are accounted for under the equity method, at fair value through net income unless the investment qualifies for certain practicability exceptions. In addition, the update clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale fixed maturity securities. We adopted this update effective January 1, 2018 using a modified retrospective approach through a cumulative-effect adjustment as of January 1, 2018 which resulted in a decrease to accumulated other comprehensive income (AOCI) of $17.5 million, an increase to retained earnings of $14.5 million, a decrease to other long-term investments of $3.8 million, and a decrease to deferred income tax liability of $0.8 million.

2017 Significant Items

•Fourth quarter of 2017 unclaimed death benefit reserve increase of $18.5 million for Unum US group life, $8.1 million for Unum US voluntary life, and $12.4 million for Colonial Life voluntary life, for a total reserve increase of $39.0 million before tax and $25.4 million after tax.

•Fourth quarter of 2017 net tax benefit of $31.5 million resulting from H.R.1, An Act to Provide Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, more commonly known as the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017. This is comprised of a tax benefit of $97.9 million related to the revaluation of our net deferred tax liabilities associated with our U.S. operations to the newly enacted U.S. corporate tax rate and a tax expense of $66.4 million resulting from the tax on undistributed and previously untaxed foreign earnings and profits.

•Fourth quarter of 2017 results for the Unum US individual disability product line reflects a reserve release of $19.5 million before tax and $12.7 million after tax, resulting from our annual review of reserve adequacy which reflects the recognition of updated morbidity assumptions in our disabled life reserves.

•First quarter of 2017 loss from a guaranty fund assessment of $20.6 million before tax and $13.4 million after tax.

Appendix to Statistical Supplement - Continued

Non-GAAP Financial Measures

We analyze our 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:

•Consolidated adjusted operating revenue, which excludes realized investment gains or losses;

•After-tax adjusted operating income or loss, which excludes realized investment gains or losses, and certain other items, as applicable;

•Adjusted operating return on equity, which is calculated using after-tax adjusted operating income or loss and excludes from equity the unrealized gain or loss on securities and net gain on hedges;

•Leverage ratio, which excludes the unrealized gain or loss on securities and net gain on hedges, and the non-recourse debt and associated capital of Northwind Holdings, LLC; and

•Book value per common share, which is calculated excluding AOCI.

Realized investment gains or losses and unrealized gains or losses on securities and net gains on 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. We exclude these items as we believe them to be infrequent or unusual in nature, 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.

Information reconciling the Company’s outlook on after-tax adjusted operating income growth per share to the comparable GAAP financial measure is not provided. The only amounts excluded from after-tax adjusted operating income are those described in this Appendix to Statistical Supplement. The Company is unable to predict with reasonable certainty realized investment gains and losses, which are affected by overall market conditions and also by factors such as an economic or political change in the country of the issuer, a regulatory change pertaining to the issuer’s industry, a significant improvement or deterioration in the cash flows of the issuer, unforeseen accounting irregularities or fraud committed by an issuer, movement in credit spreads, ratings upgrades or downgrades, a change in the issuer’s marketplace or business prospects, or any other event that significantly affects the issuers of the fixed maturity securities which the Company holds in its investment portfolio. For a reconciliation of the most directly comparable GAAP measures to these non-GAAP financial measures, refer to the "Reconciliation of Non-GAAP Financial Measures" beginning on page 16.2, other than book value per common share, which is presented on page 2.

16. 1

Reconciliation of Non-GAAP Financial Measures


	Three Months Ended
	December 31		September 30		June 30		March 31		December 31		September 30		June 30		March 31		December 31
	2019														2018				2017






Total Revenue	$	3,034.6	$	2,960.0	$	3,016.7	$	2,987.6	$	2,880.8	$	2,927.8	$	2,890.3	$	2,899.6	$	2,839.2
Excluding:
Net Realized Investment Gain (Loss)	9.2		(26.2)		(7.3)		1.1		(41.4)		6.7		(2.6)		(2.2)		11.4
Adjusted Operating Revenue	$	3,025.4	$	2,986.2	$	3,024.0	$	2,986.5	$	2,922.2	$	2,921.1	$	2,892.9	$	2,901.8	$	2,827.8

16. 2

Reconciliation of Non-GAAP Financial Measures - Continued


	After-Tax Adjusted Operating Income (Loss)		Average Allocated Equity⁽¹⁾		Adjusted Operating Return on Equity


Year Ended December 31, 2019
Unum US	$	816.3	$	4,526.6	18.0	%
Unum International	88.4		757.9		11.7	%
Colonial Life	272.7		1,558.6		17.5	%
Core Operating Segments	1,177.4		6,843.1		17.2	%
Closed Block	104.4		3,842.2
Corporate	(141.2)		(1,764.5)
Total	$	1,140.6	$	8,920.8	12.8	%

Year Ended December 31, 2018
Unum US	$	803.4	$	4,368.2	18.4	%
Unum International	93.1		694.4		13.4	%
Colonial Life	265.1		1,475.6		18.0	%
Core Operating Segments	1,161.6		6,538.2		17.8	%
Closed Block	117.0		3,512.5
Corporate	(133.6)		(1,359.1)
Total	$	1,145.0	$	8,691.6	13.2	%

Year Ended December 31, 2017
Unum US	$	656.2	$	4,130.2	15.9	%
Unum International	92.1		607.3		15.2	%
Colonial Life	211.2		1,308.1		16.2	%
Core Operating Segments	959.5		6,045.6		15.9	%
Closed Block	86.4		3,290.1
Corporate	(69.7)		(893.3)
Total	$	976.2	$	8,442.4	11.6	%

⁽¹⁾Excludes unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented on page 16.4. Due to the implementation of a FASB update for which the beginning balances of 2019 and 2018 for certain stockholders' equity line items were adjusted, we are computing the average allocated equity for 2019 and 2018 using internally allocated equity that reflects the adjusted beginning balances at January 1, 2019 and 2018, respectively. As a result, average equity for the years ended December 31, 2019 and 2018 for certain of our segments will not compute using the historical allocated equity at December 31, 2018 and 2017, respectively.

16. 3

Reconciliation of Non-GAAP Financial Measures - Continued


	After-Tax Adjusted Operating Income (Loss)		Average Allocated Equity⁽²⁾		Annualized Adjusted Operating Return on Equity


Three Months Ended December 31, 2019
Unum US	$	208.3	4,517.0		18.4	%
Unum International	15.4		747.4		8.2	%
Colonial Life	69.4		1,547.4		17.9	%
Core Operating Segments	293.1		6,811.8		17.2	%
Closed Block	35.1		3,957.4
Corporate	(37.5)		(1,685.9)
Total	$	290.7	$	9,083.3	12.8	%

Three Months Ended December 31, 2018
Unum US	$	197.3	$	4,424.7	17.8	%
Unum International	25.5		683.8		14.9	%
Colonial Life	67.6		1,530.4		17.7	%
Core Operating Segments	290.4		6,638.9		17.5	%
Closed Block	28.1		3,371.8
Corporate	(36.8)		(1,364.3)
Total	$	281.7	$	8,646.4	13.0	%

⁽²⁾Excludes unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented below.

Average allocated equity is computed as follows:



	12/31/2019		9/30/2019		12/31/2018		9/30/2018		12/31/2017		12/31/2016
Total Stockholders' Equity	$	9,965.0	$	9,631.6	$	8,621.8	$	8,518.2	$	9,574.9	$	8,968.0
Excluding:
Net Unrealized Gain (Loss) on Securities	615.9		422.1		(312.4)		(340.7)		607.8		440.6
Net Gain on Hedges	187.8		204.3		250.6		250.0		282.3		327.5
Total Adjusted Stockholders' Equity	$	9,161.3	$	9,005.2	$	8,683.6	$	8,608.9	$	8,684.8	$	8,199.9

	Twelve Months Ended		Three Months Ended		Twelve Months Ended		Three Months Ended		Twelve Months Ended
	12/31/2019						12/31/2018						12/31/2017
Average Adjusted Stockholders' Equity	$	8,920.8	$	9,083.3	$	8,691.6	$	8,646.4	$	8,442.4

16. 4

Reconciliation of Non-GAAP Financial Measures - Continued


					Three Months Ended December 31
					2019						2018
					(in millions)		per share*		(in millions)		per share*
Net Income									$	296.2	$	1.44	$	249.1	$	1.15
Excluding:
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $2.0; $(8.8))									7.2		0.04		(32.6)		(0.15)
Cost Related to Early Retirement of Debt (net of tax benefit of $0.4;$-)					(1.7)		(0.01)		—		—
After-tax Adjusted Operating Income									$	290.7	$	1.41	$	281.7	$	1.30





	Year Ended December 31
	2019						2018						2017
	(in millions)		per share *		(in millions)		per share *		(in millions)		per share *
Net Income	$	1,100.3	$	5.24	$	523.4	$	2.38	$	994.2	$	4.37
Excluding:
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(4.5); $(11.0); $15.0)	(18.7)		(0.09)		(28.5)		(0.12)		25.3		0.11
Cost Related to Early Retirement of Debt (net of tax benefit of $5.7; $-; $-)	(21.6)		(0.11)		—		—		—		—
Long-term Care Reserve Increase (net of tax benefit of $-; $157.7; $-)	—		—		(593.1)		(2.70)		—		—
Loss from Guaranty Fund Assessment (net of tax benefit of $-; $-; $7.2)	—		—		—		—		(13.4)		(0.06)
UDB Reserve Increase (net of tax benefit of $-; $-; $13.6)	—		—		—		—		(25.4)		(0.11)
Net Tax Benefit from Impacts of TCJA	—		—		—		—		31.5		0.14
After-tax Adjusted Operating Income	$	1,140.6	$	5.44	$	1,145.0	$	5.20	$	976.2	$	4.29

*Assuming Dilution.

16. 5

Reconciliation of Non-GAAP Financial Measures - Continued


	December 31
	2019			2018			2017

Debt	$	3,326.6		$	2,971.3		$	2,938.3
Including:
Lease Liability	114.7			—			—
Excluding:
Non-recourse Debt	78.1			137.1			196.0
Adjusted Debt and Lease Liability	$	3,363.2		$	2,834.2		$	2,742.3

Total Stockholders' Equity	$	9,965.0		$	8,621.8		$	9,574.9
Excluding:
Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges	803.7			(61.8)			890.1
Northwind Capital	984.6			953.1			912.2
Equity, As Adjusted	8,176.7			7,730.5			7,772.6
Debt, As Adjusted and Lease Liability	3,363.2			2,834.2			2,742.3
Total Adjusted Capital	$	11,539.9		$	10,564.7		$	10,514.9

Leverage Ratio⁽³⁾	29.1		%	26.8		%	26.1		%

⁽³⁾ In connection with our January 1, 2019 adoption of the accounting update for leases, we have included the lease liability in the calculation of our leverage ratio on a prospective basis.

16. 6

Unum (UNM) 8-KUnum Group Reports Fourth Quarter 2019 Results