Unum (UNM) 10-Q 5 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	UNM
Entity Registrant Name	Unum Group
Entity Central Index Key	0000005513
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		332,822,833

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Investments
Fixed Maturity Securities - at fair value (amortized cost: $36,267.6; $35,905.4)	38719.1	37914.4
Mortgage Loans	1384.3	1,404
Policy Loans	2889.9	2,878
Other Long-term Investments	252.4	233.5
Short-term Investments	662.1	865.5
Total Investments	43907.8	43295.4
Other Assets
Cash and Bank Deposits	51.7	71.6
Accounts and Premiums Receivable	1726.9	1732.4
Reinsurance Recoverable	4860.8	4996.9
Accrued Investment Income	704.9	642.5
Deferred Acquisition Costs	2486.8	2482.5
Goodwill	200.9	201.6
Property and Equipment	447.1	443.5
Other Assets	610.3	610.6
Total Assets	54997.2	54,477
Liabilities
Policy and Contract Benefits	1584.3	1736.9
Reserves for Future Policy and Contract Benefits	38054.1	37740.8
Unearned Premiums	479.8	452
Other Policyholders' Funds	1649.9	1662.3
Income Tax Payable	229.6	114.5
Deferred Income Tax	379.1	273.2
Short-term Debt	225.1	0
Long-term Debt	2291.2	2549.6
Other Liabilities	1323.9	1447.6
Total Liabilities	46,217	45976.9
Commitments and Contingent Liabilities - Note 9
Stockholders' Equity
Common Stock, $0.10 par Authorized: 725,000,000 shares Issued: 364,604,519 and 363,638,314 shares	36.5	36.4
Additional Paid-in Capital	2603.4	2587.4
Accumulated Other Comprehensive Income (Loss)
Net Unrealized Gain on Securities Not Other-Than-Temporarily Impaired	496.2	376.6
Net Unrealized Gain on Securities Other-Than-Temporarily Impaired	3	3
Net Gain on Cash Flow Hedges	356.8	370.8
Foreign Currency Translation Adjustment	(141)	-78.7
Unrecognized Pension and Postretirement Benefit Costs	-312.1	-330.7
Retained Earnings	6491.6	6289.5
Treasury Stock - at cost: 31,829,067 shares	-754.2	-754.2
Total Stockholders' Equity	8780.2	8500.1
Total Liabilities and Stockholders' Equity	54997.2	$54,477

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data	Mar. 31, 2010	Dec. 31, 2009
Fixed Maturity Securities, amortized cost	36267.6	35905.4
Common Stock, par	0.1	0.1
Common Stock, Authorized	725,000,000	725,000,000
Common Stock, Issued	364,604,519	363,638,314
Treasury Stock, shares	31,829,067	31,829,067

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenue
Premium Income	1863.2	1872.8
Net Investment Income	613	573.7
Realized Investment Gain (Loss)
Total Other-Than-Temporary Impairment Loss on Fixed Maturity Securities	-0.2	-73.6
Other Net Realized Investment Gain	25.8	9
Net Realized Investment Gain (Loss)	25.6	-64.6
Other Income	59.8	67
Total Revenue	2561.6	2448.9
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	1568.9	1575.7
Commissions	218.3	216.2
Interest and Debt Expense	33.4	32.6
Deferral of Acquisition Costs	-154.9	-153.6
Amortization of Deferred Acquisition Costs	141.2	131.8
Compensation Expense	197.3	190.1
Other Expenses	196.2	205.5
Total Benefits and Expenses	2200.4	2198.3
Income Before Income Tax	361.2	250.6
Income Tax
Current	74.9	60.4
Deferred	56.5	25.3
Total Income Tax	131.4	85.7
Net Income	229.8	164.9
Net Income Per Common Share
Basic	0.69	0.5
Assuming Dilution	0.69	0.5

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
In Millions	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Treasury Stock	Total
Balance at Beginning of Year at Dec. 31, 2008	36.3	2546.9	-958.2	5527.1	-754.2
Net Income				164.9		164.9
Change During Period			-121.8			-121.8
Common Stock Activity	0	6.6
Dividends to Stockholders (per common share: $0.0825; $0.075)				(25)
Balance at End of Period at Mar. 31, 2009	36.3	2553.5	(1,080)	5,667	-754.2	6422.6
Balance at Beginning of Year at Dec. 31, 2009	36.4	2587.4	341	6289.5	-754.2	8500.1
Net Income				229.8		229.8
Change During Period			61.9			61.9
Common Stock Activity	0.1	16
Dividends to Stockholders (per common share: $0.0825; $0.075)				-27.7
Balance at End of Period at Mar. 31, 2010	36.5	2603.4	402.9	6491.6	-754.2	8780.2

1_CONSOLIDATED STATEMENTS OF ST

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (Retained Earnings, USD $)
	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Dividends to Stockholders, per common share	0.0825	0.075

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows from Operating Activities
Net Income	229.8	164.9
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Change in Receivables	19.1	58.3
Change in Deferred Acquisition Costs	-13.7	-21.8
Change in Insurance Reserves and Liabilities	155	82.2
Change in Income Taxes	173.6	91.4
Change in Other Accrued Liabilities	-149.6	-103.1
Non-cash Adjustments to Net Investment Income	-126.1	-74.7
Net Realized Investment (Gain) Loss	-25.6	64.6
Depreciation	18.2	17.6
Other, Net	0.9	11.5
Net Cash Provided by Operating Activities	281.6	290.9
Cash Flows from Investing Activities
Proceeds from Sales of Available-for-Sale Securities	463	107.8
Proceeds from Maturities of Available-for-Sale Securities	343	191
Proceeds from Sales and Maturities of Other Investments	36.5	45.8
Purchase of Available-for-Sale Securities	-1255.6	-970.9
Purchase of Other Investments	-21.8	-52.6
Net Sales of Short-term Investments	208.2	426.3
Other, Net	-23.2	-24.9
Net Cash Used by Investing Activities	-249.9	-277.5
Cash Flows from Financing Activities
Net Short-term Debt Borrowings	0	16.4
Long-term Debt Repayments	-33.3	-4.7
Issuance of Common Stock	7	0.7
Dividends Paid to Stockholders	-27.7	(25)
Other, Net	2.4	-0.5
Net Cash Used by Financing Activities	-51.6	-13.1
Effect of Foreign Exchange Rate Changes on Cash	0	-0.1
Net Increase (Decrease) in Cash and Bank Deposits	-19.9	0.2
Cash and Bank Deposits at Beginning of Year	71.6	49.9
Cash and Bank Deposits at End of Period	51.7	50.1

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Net Income	229.8	164.9
Other Comprehensive Income (Loss)
Change in Net Unrealized Gains and Losses on Securities Not Other-Than-Temporarily Impaired Before Reclassification Adjustment (net of tax expense (benefit) of $157.2; $(130.7))	306	-252.6
Reclassification Adjustment for Net Realized Investment (Gain) Loss (net of tax expense (benefit) of $1.3; $(30.9))	-2.2	57.4
Change in Net Gain on Cash Flow Hedges (net of tax benefit of $7.2; $5.7)	(14)	-10.7
Change in Adjustment to Reserves for Future Policy and Contract Benefits, Net of Reinsurance and Other (net of tax expense (benefit) of $(89.6); $44.5)	-184.2	94.8
Change in Foreign Currency Translation Adjustment	-62.3	-18.2
Change in Unrecognized Pension and Postretirement Benefit Costs (net of tax expense (benefit) of $(8.5); $3.4)	18.6	7.5
Total Other Comprehensive Income (Loss)	61.9	-121.8
Comprehensive Income	291.7	43.1

2_CONSOLIDATED STATEMENTS OF CO

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Change in Net Unrealized Gains and Losses on Securities Not Other-Than-Temporarily Impaired Before Reclassification Adjustment, tax expense (benefit)	157.2	-130.7
Reclassification Adjustment for Net Realized Investment (Gain) Loss, tax expense (benefit)	1.3	-30.9
Change in Net Gain on Cash Flow Hedges, tax benefit	7.2	5.7
Change in Adjustment to Reserves for Future Policy and Contract Benefits, Net of Reinsurance and Other, tax expense (benefit)	-89.6	44.5
Change in Unrecognized Pension and Postretirement Benefit Costs, tax expense (benefit)	-8.5	3.4

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation	Note 1 - Basis of Presentation The accompanying consolidated financial statements of Unum Group and its subsidiaries (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December31, 2009. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of full year performance. In connection with our preparation of the consolidated financial statements, we evaluated events that occurred subsequent to March31, 2010, for recognition or disclosure in our financial statements and notes to our financial statements.

Accounting Developments

Accounting Developments
	3 Months Ended Mar. 31, 2010
Accounting Developments	Note 2 - Accounting Developments Accounting Updates Adopted during the First Three Months of 2010: Accounting Standards Codification (ASC) 810 Consolidation In June 2009, the Financial Accounting Standards Board (FASB) issued an update to require a qualitative rather than a quantitative analysis to determine the primary beneficiary of a variable interest entity and require enhanced disclosures about an enterprises involvement with a variable interest entity. We adopted this update effective January1, 2010. The adoption of this update had no effect on our financial position or results of operations. ASC 820 Fair Value Measurements and Disclosures In January 2010, the FASB issued an update to require a number of additional disclosures regarding fair value measurements. Specifically, the update requires a reporting entity to disclose the amounts of significant transfers between Level 1 and Level 2 of the three tier fair value hierarchy and the reasons for these transfers, as well as the reasons for any transfers in or out of Level 3, effective for annual and interim periods beginning after December15, 2009. The update also requires information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances, and settlements on a gross basis, effective for annual and interim periods beginning after December15, 2010. We adopted this update in its entirety, including early adoption of the additional Level 3 information, effective January1, 2010. The adoption of this update expanded our disclosures but had no effect on our financial position or results of operations. ASC 860 Transfers and Servicing In June 2009, the FASB issued an update to eliminate the exceptions for qualifying special-purpose entities from the consolidation guidance and eliminate the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. In addition, this update clarifies certain requirements for financial assets that are eligible for sale accounting and requires enhanced disclosures about the risks that a transferor continues to be exposed to because of its continuing involvement in transferred financial assets. We adopted this update effective January1, 2010. The adoption of this update had no effect on our financial position or results of operations. Accounting Updates Adopted during the First Three Months of 2009: ASC 815 Derivatives and Hedging In March 2008, the FASB issued a new accounting standard, now included in ASC 815, to provide additional guidance intended to improve financial reporting about derivative instruments and hedging activities. This standard requires enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows. We adopted this standard effective January1, 2009. This standard expanded our disclosures but had no effect on our financial position or results of operations.

Fair Values of Financial Instru

Fair Values of Financial Instruments
	3 Months Ended Mar. 31, 2010
Fair Values of Financial Instruments	Note 3 - Fair Values of Financial Instruments Presented as follows are the carrying amounts and fair values of financial instruments. The carrying values of financial instruments such as short-term investments, cash and bank deposits, accounts and premiums receivable, and accrued investment income approximate fair value due to the short-term nature of the instruments. As such, these financial instruments are not included in the following chart. March31, 2010 December31, 2009 Carrying Amount Fair Value Carrying Amount Fair Value (in millions of dollars) Assets Fixed Maturity Securities $ 38,719.1 $ 38,719.1 $ 37,914.4 $ 37,914.4 Mortgage Loans 1,384.3 1,440.9 1,404.0 1,402.5 Policy Loans 2,889.9 2,905.7 2,878.0 2,907.7 Other Long-term Investments Derivatives 82.6 82.6 81.1 81.1 Equity Securities 1.5 1.5 1.5 1.5 Miscellaneous Long-term Investments 168.3 168.3 150.9 150.9 Liabilities Policyholders Funds Deferred Annuity Products $ 674.4 $ 674.4 $ 684.0 $ 684.0 Supplementary Contracts without Life Contingencies 471.7 471.7 445.6 445.6 Short-term Debt 225.1 233.5 Long-term Debt 2,291.2 2,059.3 2,549.6 2,296.0 Other Liabilities Derivatives 172.0 172.0 144.6 144.6 Embedded Derivative in Modified Coinsurance Arrangement 99.1 99.1 117.4 117.4 The methods and assumptions used to estimate fair values of financial instruments are discussed as follows. Fair Value Measurements for Financial Instruments Not Carried at Fair Value Mortgage Loans: Fair values are estimated using discounted cash flow analyses and interest rates currently being offered for similar loans to borrowers with similar credit ratings and maturities. Loans with similar characteristics are aggregated for purposes of the calculations. Policy Loans: Fair values for policy loans, net of reinsurance ceded, are estimated using discounted cash flow analyses and interest rates currently being offered to policyholders with similar policies. The carrying amounts of ceded policy loans of $2,687.0 million and $2,675.7 million as of March31, 2010 and December31, 2009, respectively, are reported on a gross basis in our consolidated balance sheets and approximate fair value. Miscellaneous Long-term Investments: Carrying amounts approximate fair value. Policyholders Funds: Policyholders funds are comprised primarily of deferred annuity products and supplementary contracts without life contingencies. The carrying amounts approximate fair value. Fair values for insurance contracts other than investment contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in our overall management of interest rate risk, which minimizes exposure to changing interest rates through the matching of investment maturities wi

Investments

Investments
	3 Months Ended Mar. 31, 2010
Investments	Note 4 - Investments Fixed Maturity Securities The amortized cost and fair values of securities by security type as of March31, 2010 and December31, 2009 are shown as follows. March31, 2010 (in millions of dollars) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Other-Than- Temporary Impairments in AOCI (1) Available-for-Sale Securities United States Government and Government Agencies and Authorities $ 1,484.6 $ 72.4 $ 55.2 $ 1,501.8 $ States, Municipalities, and Political Subdivisions 736.5 23.8 27.1 733.2 Foreign Governments 1,271.7 151.4 0.4 1,422.7 Public Utilities 8,568.8 589.2 65.8 9,092.2 Mortgage/Asset-Backed Securities 3,327.0 333.0 2.2 3,657.8 All Other Corporate Bonds 20,836.2 1,697.4 263.5 22,270.1 8.3 Redeemable Preferred Stocks 42.8 0.2 1.7 41.3 Total Fixed Maturity Securities $ 36,267.6 $ 2,867.4 $ 415.9 $ 38,719.1 $ 8.3 (1) Accumulated Other Comprehensive Income (Loss) December31, 2009 (in millions of dollars) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Other-Than- Temporary Impairments in AOCI (1) Available-for-Sale Securities United States Government and Government Agencies and Authorities $ 1,473.5 $ 64.0 $ 64.3 $ 1,473.2 $ States, Municipalities, and Political Subdivisions 640.1 19.9 37.1 622.9 Foreign Governments 1,357.8 135.0 1.3 1,491.5 Public Utilities 8,359.7 531.1 109.1 8,781.7 Mortgage/Asset-Backed Securities 3,413.6 313.1 3.6 3,723.1 All Other Corporate Bonds 20,617.9 1,538.7 375.5 21,781.1 8.3 Redeemable Preferred Stocks 42.8 0.3 2.2 40.9 Total Fixed Maturity Securities $ 35,905.4 $ 2,602.1 $ 593.1 $ 37,914.4 $ 8.3 (1) Accumulated Other Comprehensive Income (Loss) The following charts indicate the length of time our fixed maturity securities had been in a gross unrealized loss position as of March31, 2010 and December31, 2009. March31, 2010 (in millions of dollars) Less Than 12 Months 12 Months or Greater Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Available-for-Sale Securities United States Government and Government Agencies and Authorities $ 120.2 $ 11.7 $ 526.3 $ 43.5 States, Municipalities, and Political Subdivisions 185.9 4.8 135.2 22.3 Foreign Governments 29.6 0.4 Public Utilities 696.0 18.4 855.5 47.4 Mortgage/Asset-Backed Securities 12.0 0.1 194.3 2.1 All Other Corporate Bonds 1,290.1 36.2 3,129.8 227.3 Redeemable Pre

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Mar. 31, 2010
Derivative Financial Instruments	Note 5 - Derivative Financial Instruments Purpose of Derivatives We are exposed to certain risks relating to our ongoing business operations. The primary risks managed by using derivative instruments are interest rate risk, risk related to matching duration for our assets and liabilities, and foreign currency risk. Historically, we have utilized current and forward interest rate swaps and options on forward interest rate swaps, current and forward currency swaps, forward treasury locks, currency forward contracts, and forward contracts on specific fixed income securities. Almost all hedging transactions are associated with our individual and group long-term care and individual and group disability products. All other product portfolios are periodically reviewed to determine if hedging strategies would be appropriate for risk management purposes. Our cash flow hedging programs are as follows: Interest rate swaps are used to hedge interest rate risks and to improve the matching of assets and liabilities. An interest rate swap is an agreement in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and variable rate interest amounts. The purpose of these swaps is to hedge the anticipated purchase of long-term bonds thereby protecting us from the potential adverse impact of declining interest rates on the associated policy reserves. We also use interest rate swaps to hedge the potential adverse impact of rising interest rates in anticipation of issuing fixed rate long-term debt. Foreign currency interest rate swaps are used to hedge the currency risk of certain foreign currency-denominated long-term bonds owned for portfolio diversification and to hedge the currency risk associated with certain of the interest payments and debt repayments of the U.S. dollar-denominated debt issued by one of our U.K. subsidiaries. For hedges of long-term bonds, we agree to pay, at specified intervals, fixed rate foreign currency-denominated principal and interest payments in exchange for fixed rate payments in the functional currency of the operating segment. For hedges of debt issued, we agree to pay, at specified intervals, fixed rate foreign currency-denominated principal and interest payments to the counterparty in exchange for fixed rate U.S. dollar-denominated interest payments. Options on forward interest rate swaps are used to hedge the interest rate risk on certain insurance liabilities with minimum interest rate guarantees. By purchasing options on interest rate swaps, we are able to lock in the minimum investment yields needed to meet the required interest rate guarantee on the insurance liabilities. Forward treasury locks are used to minimize interest rate risk associated with the anticipated purchase or disposal of fixed maturity securities. A forward treasury lock is a derivative contract without an initial investment where we and the counterparty agree to purchase or sell a specific U.S. Treasury bond at a future date at a pre-determined price. Foreign currency forward contracts are used to minimize foreign currency risks. A foreign c

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Segment Information	Note 6 - Segment Information Our reporting segments are comprised of the following: Unum US, Unum UK, Colonial Life, Individual Disability - Closed Block, and Corporate and Other. Premium income by major line of business within each of our segments is presented as follows: ThreeMonthsEndedMarch31 2010 2009 (in millions of dollars) Unum US Group Disability Group Long-term Disability $ 415.6 $ 438.1 Group Short-term Disability 106.2 107.6 Group Life and Accidental Death Dismemberment Group Life 270.1 262.2 Accidental Death Dismemberment 26.0 25.8 Supplemental and Voluntary Individual Disability - Recently Issued 118.4 119.9 Long-term Care 149.2 148.0 Voluntary Benefits 130.6 124.7 1,216.1 1,226.3 Unum UK Group Long-term Disability 114.2 123.8 Group Life 42.8 31.5 Individual Disability 8.8 7.7 165.8 163.0 Colonial Life Accident, Sickness, and Disability 162.8 156.8 Life 43.5 41.2 Cancer and Critical Illness 58.8 55.4 265.1 253.4 Individual Disability - Closed Block 214.0 229.6 Corporate and Other 2.2 0.5 Total $ 1,863.2 $ 1,872.8 Selected operating statement data by segment is presented as follows: Unum US UnumUK Colonial Life Individual Disability- Closed Block Corporate and Other Total (in millions of dollars) Three Months Ended March31, 2010 Total Premium Income $ 1,216.1 $ 165.8 $ 265.1 $ 214.0 $ 2.2 $ 1,863.2 Net Investment Income 304.6 39.8 29.9 190.7 48.0 613.0 Other Income 30.5 0.5 0.2 21.5 7.1 59.8 Operating Revenue $ 1,551.2 $ 206.1 $ 295.2 $ 426.2 $ 57.3 $ 2,536.0 Operating Income (Loss) $ 199.2 $ 60.6 $ 73.0 $ 11.7 $ (8.9 ) $ 335.6 Three Months Ended March31, 2009 Total Premium Income $ 1,226.3 $ 163.0 $ 253.4 $ 229.6 $ 0.5 $ 1,872.8 Net Investment Income 291.3 26.9 27.6 186.4 41.5 573.7 Other Income 31.6 0.6 0.1 26.9 7.8 67.0 Operating Revenue $ 1,549.2 $ 190.5 $ 281.1 $ 442.9 $ 49.8 $ 2,513.5 Operating Income (Loss) $ 183.6 $ 62.3 $ 70.9 $ 11.3 $ (12.9 ) $ 315.2 A reconciliation of total operating revenue and operating income by segment to revenue and net income as reported in our consolidated statements of income follows: ThreeMonthsEndedMarch31 2010 2009 (in millions of

Pensions and Other Postretireme

Pensions and Other Postretirement Benefits
	3 Months Ended Mar. 31, 2010
Pensions and Other Postretirement Benefits	Note 7 - Pensions and Other Postretirement Benefits The components of net periodic benefit cost related to the Company sponsored defined benefit pension and postretirement plans for our employees are as follows: Three Months Ended March31 2010 2009 2010 2009 2010 2009 (in millions of dollars) Pension Benefits U.S. Plans Non U.S. Plans PostretirementBenefits Service Cost $ 9.1 $ 7.4 $ 1.3 $ 1.2 $ 0.6 $ 0.7 Interest Cost 17.8 16.0 2.4 2.0 2.7 2.8 Expected Return on Plan Assets (17.6 ) (13.2 ) (2.7 ) (2.1 ) (0.2 ) (0.1 ) Amortization of: Net Actuarial Loss 7.4 10.3 0.6 0.5 Prior Service Credit (0.1 ) (0.1 ) (0.6 ) (0.7 ) Net Periodic Benefit Cost $ 16.6 $ 20.4 $ 1.6 $ 1.6 $ 2.5 $ 2.7 We had no regulatory contribution requirements for our U.S. qualified defined benefit plan in 2010, but we elected to make $67.0 million of voluntary contributions during the three months ended March31, 2010. For our U.K. operation, which maintains a separate defined benefit plan, we made required contributions totaling $1.3 million, or approximately 0.8million, during the three months ended March31, 2010.

Stockholders' Equity and Earnin

Stockholders' Equity and Earnings Per Common Share
	3 Months Ended Mar. 31, 2010
Stockholders' Equity and Earnings Per Common Share	Note 8 - Stockholders Equity and Earnings Per Common Share Net income per common share is determined as follows: ThreeMonthsEndedMarch31 2010 2009 (in millions of dollars, except share data) Numerator Net Income $ 229.8 $ 164.9 Denominator (000s) Weighted Average Common Shares - Basic 332,270.2 330,804.8 Dilution for Assumed Exercises of Stock Options and Nonvested Stock Awards 1,254.5 159.7 Weighted Average Common Shares - Assuming Dilution 333,524.7 330,964.5 Net Income Per Common Share Basic $ 0.69 $ 0.50 Assuming Dilution $ 0.69 $ 0.50 We use the treasury stock method to account for the effect of outstanding stock options, nonvested stock awards, and performance restricted stock units on the computation of dilutive earnings per share. Under this method, these potential common shares will each have a dilutive effect, as individually measured, when the average market price of Unum Group common stock during the period exceeds the exercise price of the stock options, the grant price of the nonvested stock awards, and/or the threshold stock price of performance restricted stock units. The outstanding stock options have exercise prices ranging from $11.37 to $32.08, the nonvested stock awards have grant prices ranging from $10.59 to $25.00, and the performance restricted stock units have a threshold stock price of $26.00. In computing earnings per share assuming dilution, only potential common shares that are dilutive (those that reduce earnings per share) are included. Potential common shares not included in the computation of dilutive earnings per share because their impact would be antidilutive, based on current market prices, approximated 3.7million and 8.9million shares of common stock for the three month periods ended March31, 2010 and 2009, respectively. Unum Group has 25,000,000 shares of preferred stock authorized with a par value of $0.10 per share. No preferred stock has been issued to date.

Commitments and Contingent Liab

Commitments and Contingent Liabilities
	3 Months Ended Mar. 31, 2010
Commitments and Contingent Liabilities	Note 9 - Commitments and Contingent Liabilities We are a defendant in a number of litigation matters. In some of these matters, no specified amount is sought. In others, very large or indeterminate amounts, including punitive and treble damages, are asserted. There is a wide variation of pleading practice permitted in the United States courts with respect to requests formonetary damages, including some courts in which no specified amount is required and others which allow the plaintiff to state only that the amount sought is sufficient to invoke the jurisdiction of that court. Further, some jurisdictions permit plaintiffs to allege damages well in excess of reasonably possible verdicts. Based on our extensive experience and that of others in the industrywith respect to litigatingor resolving claims through settlement over an extended period of time, we believe that the monetary damages asserted ina lawsuit or claim bear little relation tothe merits of the case, or the likely disposition value. Therefore, the specific monetary relief sought is not stated. Unless indicated otherwise in the descriptions below, reserves have not been established for litigation and contingencies. An estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the disclosures that follow about litigation, we refer to the name of the company specified in the original complaint, following the practice in the courts. Therefore, references to UnumProvident Corporation should be understood as references to Unum Group. Claims Handling Matters Multidistrict Litigation Between November22, 2002 and March11, 2003 five purported derivative actions were filed in state and federal courts in Tennessee. The defendants removed each of the actions that were filed in Tennessee state court to the U.S. District Court for the Eastern District of Tennessee, and the cases were consolidated. The plaintiffs then filed a single consolidated amended complaint, which purports to assert claims on behalf of the Company against certain current and past members of our board of directors and certain executive officers alleging breaches of fiduciary duties and other violations of law by establishing or permitting to be established an unlawful policy of denying legitimate disability claims and improper financial reporting, and that certain defendants engaged in insider trading. On August27, 2008, the parties entered into a stipulation of settlement to resolve the litigation. Under the terms of the settlement, which was subject to approval of the court, we agreed to implement or continue certain corporate governance measures and pay plaintiffs attorneys fees in an amount to be determined by the court. In January 2010, the court approved this settlement and awarded to the plaintiffs attorneys fees in an amount that was not material to our operating results. We have filed an appeal with the Sixth Circuit Court of Appeals regarding the attorneys fees award. Other Claim Litigation We and our insurance subsidiaries, as part of our normal operations in managing disability claims, are engaged in claim

Other

Other
	3 Months Ended Mar. 31, 2010
Other	Note 10 - Other Debt During the three months ended March31, 2010, we made principal payments of $20.8 million and $2.5 million on our senior secured non-recourse floating rate notes issued by Northwind Holdings, LLC and Tailwind Holdings, LLC, respectively. We also purchased and retired $10.0 million of our 7.08% medium-term notes due 2024. Income Tax At March31, 2010, we had a liability of $145.4 million for unrecognized tax benefits, $130.2 million of which is associated with deferred tax assets. The total unrecognized tax benefit that would impact the effective tax rate, if recognized, is $15.2 million. The interest expense and penalties related to unrecognized tax expense in our consolidated statements of income was $1.2 million and $1.4 million for the three months ended March31,2010 and 2009, respectively. During 2009, we had a conference with the Internal Revenue Service (IRS) with respect to our appeal of audit adjustments for the years 1999 to 2004. Although we have not yet reached a final settlement with the IRS for these years, it is reasonably possible that this appeal will be resolved in whole or in part within 12 months and that statutes of limitations may expire in multiple jurisdictions within the same period.As a result, it is reasonably possible that our liability for unrecognized tax benefits could decrease within 12 months by $0 to $40.0 million.We believe sufficient provision has been made for all uncertain tax provisions and that any adjustments by tax authorities with respect to such positions would not have a material adverse effect on our financial position, liquidity, or results of operations. In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law.Among other things, the new legislation reduces the tax benefits available to an employer that receives a postretirement prescription drug coverage subsidy from the federal government under the Medicare Prescription Drug, Improvement and Modernization Act of 2003.Under the new legislation, to the extent our future postretirement prescription drug coverage expenses are reimbursed under the subsidy program, the expenses covered by the subsidy will no longer be tax deductible after 2012.Employers that receive the subsidy must recognize the deferred tax effects relating to the future postretirement prescription drug coverage in the period the legislation was enacted.Our income tax expense for the three months ended March31, 2010 includes a non-cash tax charge of $10.2 million to reflect the impact of the tax law change.