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unum group 4Q 07_Statistical_Supplement_and_Notes

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finance26

The document is Unum Group's statistical supplement for the fourth quarter of 2007. It includes financial highlights, income statements, sales data, and balance sheets. Some key details are: - Net income for Q4 2007 was $160.5 million compared to $276.1 million in Q4 2006. - Premium income for 2007 was $7.901.1 billion compared to $7.948.2 billion in 2006. - Total sales decreased 4.3% to $379 million in Q4 2007 from $396.2 million in Q4 2006. - Total assets as of December 31, 2007 were $52.432.7 billion.

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Fourth Quarter 2007 Statistical Supplement www.unum.com
Unum Group Statistical Supplement Fourth Quarter 2007 TABLE OF CONTENTS (dollars in millions, except share data) Interim Results are Unaudited Page Financial Highlights 1 Consolidated Statements of Income 2 Sales Data 3 Consolidated Balance Sheets 4 Financial Results by Segment 5 Quarterly Historical Financial Results by Segment 6 Financial Results and Selected Statistics by Segment Unum US 7 Unum UK 8 Colonial 9 Individual Disability - Closed Block 10 Other 11 Corporate 12 Reserves 13 Investment Fact Sheets 14 Statutory-Basis Financial Information 15 Notes to Statistical Supplement 16 Throughout this supplement, segment operating results exclude income taxes and realized investment gains and losses. See quot;Notes to Statistical Supplementquot; on page 16 for a discussion of non-GAAP financial measures. N.M. = not a meaningful percentage
Unum Group Financial Highlights Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Financial Results Premium Income $ 1,983.9 $ 2,022.0 $ 7,901.1 $ 7,948.2 $ 7,815.6 Segment Operating Revenue $ 2,669.3 $ 2,695.4 $ 10,585.1 $ 10,533.1 $ 10,266.0 Net Realized Investment Gain (Loss) (25.8) 0.7 (65.2) 2.2 (6.7) Revenue $ 2,643.5 $ 2,696.1 $ 10,519.9 $ 10,535.3 $ 10,259.3 Income from Continuing Operations $ 160.5 $ 274.2 $ 672.4 $ 403.6 $ 504.0 Income from Discontinued Operations, net of tax - 1.9 6.9 7.4 9.6 Net Income $ 160.5 $ 276.1 $ 679.3 $ 411.0 $ 513.6 Assets $ 52,432.7 $ 52,823.3 $ 51,866.8 Stockholders' Equity $ 8,039.9 $ 7,718.8 $ 7,363.9 2007 • Full year 2007 results include a claim reassessment charge of $53.0 million before tax, or $34.5 million after tax. • Fourth quarter 2007 results include costs related to early retirement of debt of $55.6 million before tax, or $36.1 million after tax, and full year 2007 results include $58.8 million before tax, or $38.3 million after tax. 2006 • Full year 2006 results include claim reassessment charges of $411.4 million before tax, or $267.4 million after tax. • Full year 2006 results include broker compensation settlement expenses of $18.5 million before tax, or $12.7 million after tax. • Fourth quarter 2006 results include costs related to early retirement of debt of $2.7 million before tax, or $1.9 million after tax, and full year 2006 results include $25.8 million before tax, or $16.9 million after tax. • Fourth quarter and full year 2006 results include income of $2.6 million before tax, or $3.9 million after tax, attributable to the receipt of interest and tax refunds on prior year tax items in excess of what was previously provided. • Fourth quarter and full year 2006 results include an income tax benefit of approximately $91.9 million as the result of group relief benefits recognized from the use of net operating losses in a foreign jurisdiction in which our businesses operate. 2005 • Full year 2005 results include a claim reassessment charge of $75.0 million before tax, or $51.6 million after tax. • Full year 2005 results include a gain on the sale of the U.K. Netherlands branch of $5.7 million before tax, or $4.0 million after tax. • Full year 2005 results include an income tax benefit of $42.8 million related to the reduction of income tax liabilities. See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 1
Unum Group Financial Highlights Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Per Common Share Information Assuming Dilution: Income from Continuing Operations $ 0.44 $ 0.79 $ 1.89 $ 1.21 $ 1.61 Income from Discontinued Operations, net of tax - 0.01 0.02 0.02 0.03 Net Income $ 0.44 $ 0.80 $ 1.91 $ 1.23 $ 1.64 Basic: Income from Continuing Operations $ 0.45 $ 0.80 $ 1.90 $ 1.25 $ 1.71 Income from Discontinued Operations, net of tax - 0.01 0.02 0.02 0.03 Net Income $ 0.45 $ 0.81 $ 1.92 $ 1.27 $ 1.74 Dividends Paid $ 0.075 $ 0.075 $ 0.300 $ 0.300 $ 0.300 Book Value $ 22.28 $ 22.53 $ 24.66 Price (UNM closing price on last trading day of period) $ 23.79 $ 20.78 $ 22.75 1.1
Unum Group Consolidated Statements of Income Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Revenue Premium Income $ 1,983.9 $ 2,022.0 $ 7,901.1 $ 7,948.2 $ 7,815.6 Net Investment Income 619.4 601.4 2,409.9 2,320.6 2,188.3 Net Realized Investment Gain (Loss) (25.8) 0.7 (65.2) 2.2 (6.7) Other Income 66.0 72.0 274.1 264.3 262.1 Total Revenue 2,643.5 2,696.1 10,519.9 10,535.3 10,259.3 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 1,715.7 1,812.9 6,988.2 7,577.2 7,083.2 Commissions 210.6 205.5 841.1 819.0 804.7 Interest and Debt Expense - Non-recourse Debt 10.0 1.3 15.7 1.3 - Interest and Debt Expense - All Other Debt 38.8 44.5 167.4 190.5 208.0 Cost Related to Early Retirement of Debt 55.6 2.7 58.8 25.8 - Deferral of Acquisition Costs (142.7) (135.4) (556.3) (528.2) (519.4) Amortization of Deferred Acquisition Costs 120.3 124.9 480.4 478.6 463.7 Other Expenses 409.8 374.1 1,527.4 1,505.7 1,525.2 Total Benefits and Expenses 2,418.1 2,430.5 9,522.7 10,069.9 9,565.4 Income from Continuing Operations Before Income Taxes 225.4 265.6 997.2 465.4 693.9 Income Taxes (Benefit) 64.9 (8.6) 324.8 61.8 189.9 Income from Continuing Operations 160.5 274.2 672.4 403.6 504.0 Income from Discontinued Operations, net of tax - 1.9 6.9 7.4 9.6 Net Income $ 160.5 $ 276.1 $ 679.3 $ 411.0 $ 513.6 Average Number of Shares Outstanding Basic 359,809,213 340,812,551 352,969,131 324,654,923 295,776,405 Dilutive Securities: Purchase Contracts - 3,006,443 1,672,949 8,153,001 14,297,834 Options and Other Dilutive Securities 898,404 1,708,851 1,134,373 1,553,820 2,438,404 Assuming Dilution 360,707,617 345,527,845 355,776,453 334,361,744 312,512,643 Actual Number of Shares Outstanding 360,893,475 342,627,521 298,557,764 2
Unum Group Sales Data Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 12/31/2005 Unum US Segment Fully Insured Products Group Long-term Disability $ 75.3 $ 89.1 (15.5) % $ 177.7 $ 208.5 $ 180.4 Group Short-term Disability 24.8 33.5 (26.0) 64.7 74.1 74.8 Group Life 61.3 55.4 10.6 134.0 149.8 157.8 Accidental Death & Dismemberment 6.2 6.0 3.3 13.8 13.7 14.7 Individual Disability - Recently Issued 15.5 16.4 (5.5) 59.7 55.4 53.8 Group Long-term Care 11.4 11.3 0.9 32.8 25.1 21.1 Individual Long-term Care 3.3 2.6 26.9 9.9 11.0 13.0 Voluntary Benefits 29.1 25.5 14.1 138.4 134.2 130.2 Total Fully Insured Products 226.9 239.8 (5.4) 631.0 671.8 645.8 Administrative Services Only (ASO) Products Group Long-term Disability - 3.2 (100.0) 1.6 3.7 1.8 Group Short-term Disability 2.6 6.4 (59.4) 5.6 10.0 5.8 Total ASO Products 2.6 9.6 (72.9) 7.2 13.7 7.6 Unum US Segment 229.5 249.4 (8.0) 638.2 685.5 653.4 Unum UK Segment Group Long-term Disability 29.3 39.8 (26.4) 84.4 79.1 91.2 Group Life 3.0 2.8 7.1 13.2 16.5 33.0 Individual Disability 2.3 1.4 64.3 7.8 5.5 8.1 Unum UK Segment 34.6 44.0 (21.4) 105.4 101.1 132.3 Colonial Segment Accident, Sickness, and Disability 71.9 60.0 19.8 211.3 194.4 176.8 Life 22.0 22.1 (0.5) 66.7 66.6 60.6 Cancer and Critical Illness 20.3 19.8 2.5 56.9 54.1 49.0 Colonial Segment 114.2 101.9 12.1 334.9 315.1 286.4 Individual Disability - Closed Block Segment 0.7 0.9 (22.2) 3.0 4.4 6.5 Total Sales $ 379.0 $ 396.2 (4.3) $ 1,081.5 $ 1,106.1 $ 1,078.6 3
Unum Group Consolidated Balance Sheets December 31, 2007 2006 Assets Investments Fixed Maturity Securities $ 35,654.7 $ 35,001.5 Mortgage Loans 1,068.9 944.0 Real Estate 18.2 17.9 Policy Loans 2,617.7 3,429.5 Other Long-term Investments 104.7 122.0 Short-term Investments 1,486.8 648.4 Total Investments 40,951.0 40,163.3 Cash and Bank Deposits 199.1 121.3 Accounts and Premiums Receivable 1,914.7 2,057.1 Reinsurance Recoverable 5,160.0 5,512.2 Accrued Investment Income 592.3 646.8 Deferred Acquisition Costs 2,381.9 2,983.1 Goodwill 204.3 204.1 Other Assets 1,009.2 994.6 Other Assets - Discontinued Operations - 112.3 Separate Account Assets 20.2 28.5 Total Assets $ 52,432.7 $ 52,823.3 Liabilities Policy and Contract Benefits $ 1,979.7 $ 2,220.4 Reserves for Future Policy and Contract Benefits 35,828.0 35,689.4 Unearned Premiums 523.1 520.1 Other Policyholders' Funds 1,821.2 2,019.1 Income Tax 400.3 611.7 Short-term Debt 175.0 - Long-term Debt - Non-recourse 912.5 130.0 Long-term Debt - All Other 1,602.7 2,529.6 Other Liabilities 1,130.1 1,326.7 Other Liabilities - Discontinued Operations - 29.0 Separate Account Liabilities 20.2 28.5 Total Liabilities 44,392.8 45,104.5 Stockholders' Equity Common Stock 36.3 34.4 Additional Paid-in Capital 2,516.9 2,200.0 Accumulated Other Comprehensive Income 463.5 612.8 Retained Earnings 5,077.4 4,925.8 Treasury Stock (54.2) (54.2) Total Stockholders' Equity 8,039.9 7,718.8 Total Liabilities and Stockholders' Equity $ 52,432.7 $ 52,823.3 4
Unum Group Deferred Acquisition Costs by Segment Unum US Unum UK Colonial Other Consolidated Balances at December 31, 2004 $ 2,196.2 $ 154.9 $ 530.9 $ 0.5 $ 2,882.5 Capitalized 311.9 34.1 173.4 - 519.4 Amortized (306.9) (21.6) (134.7) (0.5) (463.7) Foreign Currency - (24.9) - - (24.9) Balances at December 31, 2005 2,201.2 142.5 569.6 - 2,913.3 Capitalized 306.2 34.4 187.6 - 528.2 Amortized (302.2) (32.0) (144.4) - (478.6) Foreign Currency - 20.2 - - 20.2 Balances at December 31, 2006 2,205.2 165.1 612.8 - 2,983.1 Cumulative Effect of SOP 05-1 (589.8) (88.3) - - (678.1) Capitalized 304.2 41.2 210.9 - 556.3 Amortized (277.1) (49.4) (153.9) - (480.4) Foreign Currency - 1.0 - - 1.0 Balances at December 31, 2007 $ 1,642.5 $ 69.6 $ 669.8 $ - $ 2,381.9 4.1
Unum Group Balance Sheets by Segment - December 31, 2007 Unum US Group Life and Accidental Supplemental Individual Group Death & and Total Disability - Corporate Disability Dismemberment Voluntary Unum US Unum UK Colonial Closed Block and Other Consolidated Assets Investments $ 10,011.0 $ 2,144.9 $ 5,819.8 $ 17,975.7 $ 3,423.6 $ 1,658.0 $ 12,078.5 $ 5,815.2 $ 40,951.0 Deferred Acquisition Costs 145.6 100.4 1,396.5 1,642.5 69.6 669.8 - - 2,381.9 Goodwill 2.5 - 187.5 190.0 14.3 - - - 204.3 All Other 724.5 102.1 378.0 1,204.6 509.0 190.7 3,097.1 3,894.1 8,895.5 Total Assets $ 10,883.6 $ 2,347.4 $ 7,781.8 $ 21,012.8 $ 4,016.5 $ 2,518.5 $ 15,175.6 $ 9,709.3 $ 52,432.7 Liabilities Reserves and Policyholder Benefits $ 8,836.9 $ 1,514.0 $ 5,171.1 $ 15,522.0 $ 2,867.1 $ 1,464.5 $ 12,679.9 $ 7,618.5 $ 40,152.0 Debt - - - - - - - 2,690.2 2,690.2 All Other 182.5 10.7 380.0 573.2 167.2 162.3 7.4 640.5 1,550.6 Total Liabilities 9,019.4 1,524.7 5,551.1 16,095.2 3,034.3 1,626.8 12,687.3 10,949.2 44,392.8 Other Allocated Stockholders' Equity 1,932.5 799.0 1,945.9 4,677.4 899.5 868.1 2,322.8 (1,266.5) 7,501.3 Unrealized Gain/Loss on Securities (68.3) 23.7 284.8 240.2 82.7 23.6 165.5 26.6 538.6 Total Allocated Stockholders' Equity 1,864.2 822.7 2,230.7 4,917.6 982.2 891.7 2,488.3 (1,239.9) 8,039.9 Total Liabilities and Allocated Stockholders' Equity $ 10,883.6 $ 2,347.4 $ 7,781.8 $ 21,012.8 $ 4,016.5 $ 2,518.5 $ 15,175.6 $ 9,709.3 $ 52,432.7 Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements. 4.2
Unum Group Balance Sheets by Segment - December 31, 2006 Unum US Group Life Corporate, and Accidental Supplemental Individual Other, and Group Death & and Total Disability - Discontinued Disability Dismemberment Voluntary Unum US Unum UK Colonial Closed Block Operations Consolidated Assets Investments $ 9,618.2 $ 2,272.1 $ 5,093.6 $ 16,983.9 $ 3,216.9 $ 1,524.8 $ 12,244.8 $ 6,192.9 $ 40,163.3 Deferred Acquisition Costs 571.9 273.1 1,360.2 2,205.2 165.1 612.8 - - 2,983.1 Goodwill 2.5 - 187.5 190.0 14.1 - - - 204.1 All Other 968.4 104.6 448.7 1,521.7 508.1 217.4 3,364.7 3,860.9 9,472.8 Total Assets $ 11,161.0 $ 2,649.8 $ 7,090.0 $ 20,900.8 $ 3,904.2 $ 2,355.0 $ 15,609.5 $ 10,053.8 $ 52,823.3 Liabilities Reserves and Policyholder Benefits $ 8,756.5 $ 1,564.8 $ 4,548.5 $ 14,869.8 $ 2,750.9 $ 1,382.5 $ 12,684.3 $ 8,761.5 $ 40,449.0 Debt - - - - - - - 2,659.6 2,659.6 All Other 365.3 82.3 398.4 846.0 179.5 147.5 26.2 796.7 1,995.9 Total Liabilities 9,121.8 1,647.1 4,946.9 15,715.8 2,930.4 1,530.0 12,710.5 12,217.8 45,104.5 Other Allocated Stockholders' Equity 2,012.3 973.6 1,834.5 4,820.4 899.6 791.5 2,640.0 (2,161.7) 6,989.8 Unrealized Gain/Loss on Securities 26.9 29.1 308.6 364.6 74.2 33.5 259.0 (2.3) 729.0 Total Allocated Stockholders' Equity 2,039.2 1,002.7 2,143.1 5,185.0 973.8 825.0 2,899.0 (2,164.0) 7,718.8 Total Liabilities and Allocated Stockholders' Equity $ 11,161.0 $ 2,649.8 $ 7,090.0 $ 20,900.8 $ 3,904.2 $ 2,355.0 $ 15,609.5 $ 10,053.8 $ 52,823.3 4.3
Unum Group Financial Results by Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change Premium Income Unum US $ 1,248.1 $ 1,302.0 (4.1) % $ 5,014.0 $ 5,196.0 (3.5) % Unum UK 251.4 231.0 8.8 968.3 842.8 14.9 Colonial 232.0 217.2 6.8 907.2 842.1 7.7 Individual Disability - Closed Block 252.2 269.8 (6.5) 1,009.9 1,062.8 (5.0) Other 0.2 2.0 (90.0) 1.7 4.5 (62.2) 1,983.9 2,022.0 (1.9) 7,901.1 7,948.2 (0.6) Net Investment Income Unum US 283.0 284.6 (0.6) 1,129.9 1,063.1 6.3 Unum UK 57.3 50.9 12.6 200.4 174.6 14.8 Colonial 25.6 24.0 6.7 99.9 93.6 6.7 Individual Disability - Closed Block 205.6 205.5 - 827.2 828.7 (0.2) Other 28.7 28.1 2.1 108.4 113.2 (4.2) Corporate 19.2 8.3 131.3 44.1 47.4 (7.0) 619.4 601.4 3.0 2,409.9 2,320.6 3.8 Other Income Unum US 33.7 27.7 21.7 135.7 108.5 25.1 Unum UK 0.4 0.1 N.M. 3.1 0.1 N.M. Colonial - 0.2 (100.0) 0.9 1.1 (18.2) Individual Disability - Closed Block 25.1 29.4 (14.6) 103.7 105.1 (1.3) Other 6.3 8.8 (28.4) 28.5 33.8 (15.7) Corporate 0.5 5.8 (91.4) 2.2 15.7 (86.0) 66.0 72.0 (8.3) 274.1 264.3 3.7 Total Operating Revenue Unum US 1,564.8 1,614.3 (3.1) 6,279.6 6,367.6 (1.4) Unum UK 309.1 282.0 9.6 1,171.8 1,017.5 15.2 Colonial 257.6 241.4 6.7 1,008.0 936.8 7.6 Individual Disability - Closed Block 482.9 504.7 (4.3) 1,940.8 1,996.6 (2.8) Other 35.2 38.9 (9.5) 138.6 151.5 (8.5) Corporate 19.7 14.1 39.7 46.3 63.1 (26.6) 2,669.3 2,695.4 (1.0) 10,585.1 10,533.1 0.5 5
Unum Group Financial Results by Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change Benefits and Expenses Unum US $ 1,398.2 $ 1,478.4 (5.4) % $ 5,714.0 $ 6,271.9 (8.9) % Unum UK 224.1 200.2 11.9 833.0 759.7 9.6 Colonial 198.8 190.9 4.1 762.2 738.1 3.3 Individual Disability - Closed Block 459.5 476.0 (3.5) 1,822.9 1,925.3 (5.3) Other 28.9 32.5 (11.1) 121.1 127.1 (4.7) Corporate 108.6 52.5 106.9 269.5 247.8 8.8 2,418.1 2,430.5 (0.5) 9,522.7 10,069.9 (5.4) Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss) Unum US 166.6 135.9 22.6 565.6 95.7 N.M. Unum UK 85.0 81.8 3.9 338.8 257.8 31.4 Colonial 58.8 50.5 16.4 245.8 198.7 23.7 Individual Disability - Closed Block 23.4 28.7 (18.5) 117.9 71.3 65.4 Other 6.3 6.4 (1.6) 17.5 24.4 (28.3) Corporate (88.9) (38.4) (131.5) (223.2) (184.7) (20.8) 251.2 264.9 (5.2) 1,062.4 463.2 129.4 Income Taxes (Benefit) 74.2 (8.8) N.M. 346.8 61.1 N.M. Income from Continuing Operations Before Net Realized Investment Gain (Loss) 177.0 273.7 (35.3) 715.6 402.1 78.0 Net Realized Investment Gain (Loss) (25.8) 0.7 N.M. (65.2) 2.2 N.M. Tax Expense (Benefit) on Net Realized Investment Gain (Loss) (9.3) 0.2 N.M. (22.0) 0.7 N.M. Income from Discontinued Operations, net of tax - 1.9 (100.0) 6.9 7.4 (6.8) Net Income $ 160.5 $ 276.1 (41.9) $ 679.3 $ 411.0 65.3 Note: See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 5.1
Unum Group Quarterly Historical Financial Results by Segment 12/31/07 9/30/07 6/30/07 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Premium Income Unum US $ 1,248.1 $ 1,255.3 $ 1,265.7 $ 1,244.9 $ 1,302.0 $ 1,278.6 $ 1,311.6 $ 1,303.8 $ 1,309.0 Unum UK 251.4 247.6 247.0 222.3 231.0 219.7 200.7 191.4 198.2 Colonial 232.0 227.0 224.8 223.4 217.2 212.8 209.5 202.6 200.5 Individual Disability - Closed Block 252.2 256.0 249.4 252.3 269.8 257.8 264.2 271.0 279.3 Other 0.2 0.6 (0.2) 1.1 2.0 0.1 1.2 1.2 1.4 1,983.9 1,986.5 1,986.7 1,944.0 2,022.0 1,969.0 1,987.2 1,970.0 1,988.4 Net Investment Income Unum US 283.0 283.1 286.9 276.9 284.6 261.9 258.9 257.7 255.4 Unum UK 57.3 47.4 49.9 45.8 50.9 45.8 39.9 38.0 37.7 Colonial 25.6 25.0 24.9 24.4 24.0 23.6 23.4 22.6 24.3 Individual Disability - Closed Block 205.6 213.6 203.4 204.6 205.5 207.0 214.0 202.2 207.5 Other 28.7 24.7 26.9 28.1 28.1 28.0 28.4 28.7 29.1 Corporate 19.2 9.4 5.8 9.7 8.3 12.5 12.0 14.6 10.9 619.4 603.2 597.8 589.5 601.4 578.8 576.6 563.8 564.9 Other Income Unum US 33.7 32.8 34.5 34.7 27.7 27.3 28.1 25.4 28.6 Unum UK 0.4 0.7 0.3 1.7 0.1 - (0.1) 0.1 - Colonial - 0.3 0.3 0.3 0.2 0.2 0.4 0.3 0.9 Individual Disability - Closed Block 25.1 27.5 25.8 25.3 29.4 25.5 23.9 26.3 25.0 Other 6.3 4.9 9.1 8.2 8.8 8.3 8.4 8.3 10.6 Corporate 0.5 0.4 0.7 0.6 5.8 3.5 3.0 3.4 (0.6) 66.0 66.6 70.7 70.8 72.0 64.8 63.7 63.8 64.5 Total Operating Revenue Unum US 1,564.8 1,571.2 1,587.1 1,556.5 1,614.3 1,567.8 1,598.6 1,586.9 1,593.0 Unum UK 309.1 295.7 297.2 269.8 282.0 265.5 240.5 229.5 235.9 Colonial 257.6 252.3 250.0 248.1 241.4 236.6 233.3 225.5 225.7 Individual Disability - Closed Block 482.9 497.1 478.6 482.2 504.7 490.3 502.1 499.5 511.8 Other 35.2 30.2 35.8 37.4 38.9 36.4 38.0 38.2 41.1 Corporate 19.7 9.8 6.5 10.3 14.1 16.0 15.0 18.0 10.3 2,669.3 2,656.3 2,655.2 2,604.3 2,695.4 2,612.6 2,627.5 2,597.6 2,617.8 6
Unum Group Quarterly Historical Financial Results by Segment 12/31/07 9/30/07 6/30/07 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Benefits and Expenses Unum US $ 1,398.2 $ 1,406.9 $ 1,494.8 $ 1,414.1 $ 1,478.4 $ 1,741.0 $ 1,494.1 $ 1,558.4 $ 1,489.1 Unum UK 224.1 194.7 219.5 194.7 200.2 200.0 184.4 175.1 186.6 Colonial 198.8 189.8 185.1 188.5 190.9 184.5 183.4 179.3 187.0 Individual Disability - Closed Block 459.5 467.7 436.0 459.7 476.0 495.6 468.9 484.8 478.1 Other 28.9 26.6 31.8 33.8 32.5 28.6 32.6 33.4 36.4 Corporate 108.6 45.5 65.5 49.9 52.5 65.1 68.7 61.5 53.3 2,418.1 2,331.2 2,432.7 2,340.7 2,430.5 2,714.8 2,432.1 2,492.5 2,430.5 Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss) Unum US 166.6 164.3 92.3 142.4 135.9 (173.2) 104.5 28.5 103.9 Unum UK 85.0 101.0 77.7 75.1 81.8 65.5 56.1 54.4 49.3 Colonial 58.8 62.5 64.9 59.6 50.5 52.1 49.9 46.2 38.7 Individual Disability - Closed Block 23.4 29.4 42.6 22.5 28.7 (5.3) 33.2 14.7 33.7 Other 6.3 3.6 4.0 3.6 6.4 7.8 5.4 4.8 4.7 Corporate (88.9) (35.7) (59.0) (39.6) (38.4) (49.1) (53.7) (43.5) (43.0) 251.2 325.1 222.5 263.6 264.9 (102.2) 195.4 105.1 187.3 Income Taxes (Benefit) 74.2 108.1 75.5 89.0 (8.8) (33.8) 68.5 35.2 54.0 Income (Loss) from Continuing Operations Before Net Realized Investment Gain (Loss) 177.0 217.0 147.0 174.6 273.7 (68.4) 126.9 69.9 133.3 Net Realized Investment Gain (Loss) (25.8) (46.1) 10.4 (3.7) 0.7 4.8 (5.8) 2.5 2.4 Tax Expense (Benefit) on Net Realized Investment Gain (Loss) (9.3) (16.1) 3.9 (0.5) 0.2 1.7 (2.2) 1.0 0.9 Income from Discontinued Operations, net of tax - - - 6.9 1.9 1.6 1.9 2.0 2.7 Net Income (Loss) $ 160.5 $ 187.0 $ 153.5 $ 178.3 $ 276.1 $ (63.7) $ 125.2 $ 73.4 $ 137.5 Per Common Share - Assuming Dilution Income (Loss) from Continuing Operations $ 0.44 $ 0.52 $ 0.43 $ 0.49 $ 0.79 $ (0.19) $ 0.37 $ 0.22 $ 0.42 Income from Discontinued Operations, net of tax - - - 0.02 0.01 - 0.01 0.01 0.01 Net Income (Loss) $ 0.44 $ 0.52 $ 0.43 $ 0.51 $ 0.80 $ (0.19) $ 0.38 $ 0.23 $ 0.43 Note: See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 6.1
Unum Group Financial Results for Unum US Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 1,248.1 $ 1,302.0 $ 5,014.0 $ 5,196.0 $ 5,229.0 Net Investment Income 283.0 284.6 1,129.9 1,063.1 998.2 Other Income 33.7 27.7 135.7 108.5 108.6 Total Operating Revenue 1,564.8 1,614.3 6,279.6 6,367.6 6,335.8 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 1,019.0 1,107.5 4,246.4 4,752.1 4,419.3 Commissions 124.1 125.2 501.5 505.2 501.6 Deferral of Acquisition Costs (78.2) (78.0) (304.2) (306.2) (311.9) Amortization of Deferred Acquisition Costs 68.8 71.9 277.1 302.2 306.9 Other Expenses 264.5 251.8 993.2 1,018.6 1,032.2 Total Benefits and Expenses 1,398.2 1,478.4 5,714.0 6,271.9 5,948.1 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 166.6 $ 135.9 $ 565.6 $ 95.7 $ 387.7 Operating Ratios Benefit Ratio 81.6 % 85.1 % 84.7 % 91.5 % 84.5 % Other Expense Ratio 21.2 % 19.3 % 19.8 % 19.6 % 19.7 % Before-tax Profit Margin 13.3 % 10.4 % 11.3 % 1.8 % 7.4 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 166.6 $ 135.9 $ 565.6 $ 95.7 $ 387.7 Settlement Agreements Claim Reassessment - Reserve Charge - - (76.5) (349.2) (29.6) Settlement Agreements Claim Reassessment - Other Expense Charge - - 10.3 (15.0) (11.1) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 166.6 $ 135.9 $ 631.8 $ 459.9 $ 428.4 Operating Ratios, as Adjusted Benefit Ratio 81.6 % 85.1 % 83.2 % 84.7 % 83.9 % Other Expense Ratio 21.2 % 19.3 % 20.0 % 19.3 % 19.5 % Before-tax Profit Margin 13.3 % 10.4 % 12.6 % 8.9 % 8.2 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7
Unum Group Financial Results for Unum US Group Disability Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Long-term Disability $ 473.3 $ 493.8 $ 1,895.7 $ 1,953.3 $ 1,961.6 Group Short-term Disability 115.3 131.3 485.6 530.2 566.3 Total Premium Income 588.6 625.1 2,381.3 2,483.5 2,527.9 Net Investment Income 154.9 168.4 636.0 621.9 605.7 Other Income 26.5 20.6 100.2 82.3 80.3 Total Operating Revenue 770.0 814.1 3,117.5 3,187.7 3,213.9 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 538.7 587.6 2,277.4 2,702.5 2,397.7 Commissions 40.3 43.0 167.7 175.8 175.1 Deferral of Acquisition Costs (15.2) (16.1) (60.4) (64.5) (64.6) Amortization of Deferred Acquisition Costs 16.6 20.8 66.2 86.4 92.2 Other Expenses 148.3 143.7 561.6 588.6 582.5 Total Benefits and Expenses 728.7 779.0 3,012.5 3,488.8 3,182.9 Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses $ 41.3 $ 35.1 $ 105.0 $ (301.1) $ 31.0 Operating Ratios Benefit Ratio 91.5 % 94.0 % 95.6 % 108.8 % 94.8 % Other Expense Ratio 25.2 % 23.0 % 23.6 % 23.7 % 23.0 % Before-tax Profit (Loss) Margin 7.0 % 5.6 % 4.4 % (12.1)% 1.2 % Premium Persistency: Group Long-term Disability 85.1 % 87.8 % 84.8 % Group Short-term Disability 74.0 % 85.6 % 79.6 % Case Persistency: Group Long-term Disability 88.4 % 87.4 % 87.2 % Group Short-term Disability 87.4 % 86.2 % 85.6 % 7.1
Unum Group Financial Results for Unum US Group Disability - Continued Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 41.3 $ 35.1 $ 105.0 $ (301.1) $ 31.0 Settlement Agreements Claim Reassessment - Reserve Charge - - (76.5) (349.2) (27.3) Settlement Agreements Claim Reassessment - Other Expense Charge - - 10.3 (15.0) (10.1) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 41.3 $ 35.1 $ 171.2 $ 63.1 $ 68.4 Operating Ratios, as Adjusted Benefit Ratio 91.5 % 94.0 % 92.4 % 94.8 % 93.8 % Other Expense Ratio 25.2 % 23.0 % 24.0 % 23.1 % 22.6 % Before-tax Profit Margin 7.0 % 5.6 % 7.2 % 2.5 % 2.7 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7.2
Unum Group Financial Results for Unum US Group Life and Accidental Death and Dismemberment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Life $ 273.1 $ 311.0 $ 1,107.4 $ 1,248.1 $ 1,306.8 Accidental Death & Dismemberment 33.3 37.8 131.0 151.6 156.4 Total Premium Income 306.4 348.8 1,238.4 1,399.7 1,463.2 Net Investment Income 32.5 35.6 134.9 141.3 151.9 Other Income 0.5 - 2.4 - 2.0 Total Operating Revenue 339.4 384.4 1,375.7 1,541.0 1,617.1 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 212.9 264.9 901.6 1,067.3 1,111.9 Commissions 22.4 23.0 88.7 90.1 97.8 Deferral of Acquisition Costs (9.8) (9.0) (36.1) (37.7) (42.7) Amortization of Deferred Acquisition Costs 10.3 16.2 39.4 65.0 73.0 Other Expenses 43.5 43.0 164.9 178.3 188.3 Total Benefits and Expenses 279.3 338.1 1,158.5 1,363.0 1,428.3 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 60.1 $ 46.3 $ 217.2 $ 178.0 $ 188.8 Operating Ratios Benefit Ratio 69.5 % 75.9 % 72.8 % 76.3 % 76.0 % Other Expense Ratio 14.2 % 12.3 % 13.3 % 12.7 % 12.9 % Before-tax Profit Margin 19.6 % 13.3 % 17.5 % 12.7 % 12.9 % Premium Persistency: Group Life 78.8 % 81.2 % 78.3 % Accidental Death & Dismemberment 80.8 % 82.8 % 76.9 % Case Persistency: Group Life 87.7 % 86.9 % 86.3 % Accidental Death & Dismemberment 88.0 % 87.0 % 86.4 % 7.3
Unum Group Financial Results for Unum US Supplemental and Voluntary Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Individual Disability - Recently Issued $ 113.2 $ 105.9 $ 456.7 $ 438.5 $ 425.1 Long-term Care 137.1 126.5 532.9 492.4 473.2 Voluntary Benefits 102.8 95.7 404.7 381.9 339.6 Total Premium Income 353.1 328.1 1,394.3 1,312.8 1,237.9 Net Investment Income 95.6 80.6 359.0 299.9 240.6 Other Income 6.7 7.1 33.1 26.2 26.3 Total Operating Revenue 455.4 415.8 1,786.4 1,638.9 1,504.8 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 267.4 255.0 1,067.4 982.3 909.7 Commissions 61.4 59.2 245.1 239.3 228.7 Deferral of Acquisition Costs (53.2) (52.9) (207.7) (204.0) (204.6) Amortization of Deferred Acquisition Costs 41.9 34.9 171.5 150.8 141.7 Other Expenses 72.7 65.1 266.7 251.7 261.4 Total Benefits and Expenses 390.2 361.3 1,543.0 1,420.1 1,336.9 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 167.9 Operating Ratios Benefit Ratios Individual Disability - Recently Issued 53.1 % 61.5 % 56.7 % 58.0 % 57.5 % Long-term Care 104.7 % 101.7 % 106.0 % 99.2 % 93.0 % Voluntary Benefits 62.1 % 64.1 % 60.1 % 62.7 % 66.3 % Other Expense Ratio 20.6 % 19.8 % 19.1 % 19.2 % 21.1 % Before-tax Profit Margin 18.5 % 16.6 % 17.5 % 16.7 % 13.6 % Interest Adjusted Loss Ratios Individual Disability - Recently Issued 35.8 % 45.7 % 40.8 % 43.5 % 44.4 % Long-term Care 75.5 % 74.3 % 77.7 % 73.1 % 70.9 % 7.4
Unum Group Financial Results for Unum US Supplemental and Voluntary - Continued Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Premium Persistency: Individual Disability - Recently Issued 90.6 % 90.5 % 89.6 % Long-term Care 95.4 % 95.3 % 95.8 % Voluntary Benefits 79.4 % 80.9 % 81.1 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 167.9 Settlement Agreements Claim Reassessment - Reserve Charge - - - - (2.3) Settlement Agreements Claim Reassessment - Other Expense Charge - - - - (1.0) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 171.2 Operating Ratios, as Adjusted Benefit Ratios Individual Disability - Recently Issued 53.1 % 61.5 % 56.7 % 58.0 % 57.0 % Long-term Care 104.7 % 101.7 % 106.0 % 99.2 % 93.0 % Voluntary Benefits 62.1 % 64.1 % 60.1 % 62.7 % 66.3 % Other Expense Ratio 20.6 % 19.8 % 19.1 % 19.2 % 21.0 % Before-tax Profit Margin 18.5 % 16.6 % 17.5 % 16.7 % 13.8 % Interest Adjusted Loss Ratios, as Adjusted Individual Disability - Recently Issued 35.8 % 45.7 % 40.8 % 43.5 % 43.8 % Long-term Care 75.5 % 74.3 % 77.7 % 73.1 % 70.9 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7.5
Unum Group Financial Results for Unum UK Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Long-term Disability $ 191.0 $ 171.7 $ 752.6 $ 638.9 $ 582.9 Group Life 50.4 50.4 177.4 171.0 164.1 Individual Disability 10.0 8.9 38.3 32.9 38.3 Total Premium Income 251.4 231.0 968.3 842.8 785.3 Net Investment Income 57.3 50.9 200.4 174.6 154.2 Other Income 0.4 0.1 3.1 0.1 6.1 Total Operating Revenue 309.1 282.0 1,171.8 1,017.5 945.6 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 152.9 139.0 574.3 553.5 545.8 Commissions 17.7 12.8 67.0 49.7 56.4 Deferral of Acquisition Costs (11.0) (8.8) (41.2) (34.4) (34.1) Amortization of Deferred Acquisition Costs 12.8 15.0 49.4 32.0 21.6 Other Expenses 51.7 42.2 183.5 158.9 168.2 Total Benefits and Expenses 224.1 200.2 833.0 759.7 757.9 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 187.7 Operating Ratios Benefit Ratio 60.8 % 60.2 % 59.3 % 65.7 % 69.5 % Other Expense Ratio 20.6 % 18.3 % 19.0 % 18.9 % 21.4 % Before-tax Profit Margin 33.8 % 35.4 % 35.0 % 30.6 % 23.9 % Premium Persistency: Group Long-term Disability 88.0 % 90.4 % 94.2 % Group Life 70.5 % 69.1 % 86.3 % Individual Disability 89.4 % 88.2 % 88.4 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 187.7 Gain on Sale of Netherlands Branch - - - - 5.7 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 182.0 Operating Ratio, as Adjusted Before-tax Profit Margin 33.8 % 35.4 % 35.0 % 30.6 % 23.2 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 8
Unum Group Financial Results for Colonial Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Accident, Sickness, and Disability $ 144.7 $ 136.4 $ 566.6 $ 533.3 $ 508.9 Life 37.0 34.8 143.5 130.5 114.0 Cancer and Critical Illness 50.3 46.0 197.1 178.3 164.1 Total Premium Income 232.0 217.2 907.2 842.1 787.0 Net Investment Income 25.6 24.0 99.9 93.6 96.0 Other Income - 0.2 0.9 1.1 4.4 Total Operating Revenue 257.6 241.4 1,008.0 936.8 887.4 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 111.4 113.5 437.8 441.4 433.2 Commissions 51.8 47.1 201.6 184.9 170.7 Deferral of Acquisition Costs (53.5) (48.6) (210.9) (187.6) (173.4) Amortization of Deferred Acquisition Costs 38.7 38.0 153.9 144.4 134.7 Other Expenses 50.4 40.9 179.8 155.0 154.1 Total Benefits and Expenses 198.8 190.9 762.2 738.1 719.3 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 58.8 $ 50.5 $ 245.8 $ 198.7 $ 168.1 Operating Ratios Benefit Ratio 48.0 % 52.3 % 48.3 % 52.4 % 55.0 % Other Expense Ratio 21.7 % 18.8 % 19.8 % 18.4 % 19.6 % Before-tax Profit Margin 25.3 % 23.3 % 27.1 % 23.6 % 21.4 % Premium Persistency: Accident, Sickness, and Disability 75.9 % 74.9 % 75.3 % Life 83.8 % 84.2 % 84.1 % Cancer and Critical Illness 84.1 % 82.3 % 83.2 % 9
Unum Group Financial Results for Individual Disability - Closed Block Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 252.2 $ 269.8 $ 1,009.9 $ 1,062.8 $ 1,011.7 Net Investment Income 205.6 205.5 827.2 828.7 770.0 Other Income 25.1 29.4 103.7 105.1 95.2 Total Operating Revenue 482.9 504.7 1,940.8 1,996.6 1,876.9 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 404.9 421.7 1,614.5 1,709.7 1,562.7 Commissions 16.6 18.5 69.1 76.2 74.9 Other Expenses 38.0 35.8 139.3 139.4 159.4 Total Benefits and Expenses 459.5 476.0 1,822.9 1,925.3 1,797.0 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 23.4 $ 28.7 $ 117.9 $ 71.3 $ 79.9 Operating Ratios Interest Adjusted Loss Ratio 91.2 % 93.8 % 91.4 % 97.3 % 89.3 % Premium Persistency 94.3 % 94.4 % 94.5 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 23.4 $ 28.7 $ 117.9 $ 71.3 $ 79.9 Settlement Agreements Claim Reassessment - Reserve Charge - - 10.7 (47.2) (23.1) Settlement Agreements Claim Reassessment - Other Expense Charge - - 2.5 - (11.2) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 23.4 $ 28.7 $ 104.7 $ 118.5 $ 114.2 Interest Adjusted Loss Ratio, as Adjusted 91.2 % 93.8 % 92.5 % 92.9 % 87.3 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 10
Unum Group Financial Results for Other Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 0.2 $ 2.0 $ 1.7 $ 4.5 $ 2.6 Net Investment Income 28.7 28.1 108.4 113.2 120.5 Other Income 6.3 8.8 28.5 33.8 36.0 Total Operating Revenue 35.2 38.9 138.6 151.5 159.1 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 27.5 31.2 115.2 120.5 122.2 Commissions 0.4 1.9 1.9 3.0 1.1 Amortization of Deferred Acquisition Costs - - - - 0.5 Other Expenses 1.0 (0.6) 4.0 3.6 5.3 Total Benefits and Expenses 28.9 32.5 121.1 127.1 129.1 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 6.3 $ 6.4 $ 17.5 $ 24.4 $ 30.0 11
Unum Group Financial Results for Corporate Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Net Investment Income $ 19.2 $ 8.3 $ 44.1 $ 47.4 $ 49.4 Other Income 0.5 5.8 2.2 15.7 11.8 Total Operating Revenue 19.7 14.1 46.3 63.1 61.2 Benefits and Expenses Interest and Debt Expense - Non-recourse Debt 10.0 1.3 15.7 1.3 - Interest and Debt Expense - All Other Debt 38.8 44.5 167.4 190.5 208.0 Cost Related to Early Retirement of Debt 55.6 2.7 58.8 25.8 - Unallocated Expenses 4.2 4.0 27.6 30.2 6.0 Total Benefits and Expenses 108.6 52.5 269.5 247.8 214.0 Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses $ (88.9) $ (38.4) $ (223.2) $ (184.7) $ (152.8) Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ (88.9) $ (38.4) $ (223.2) $ (184.7) $ (152.8) Broker Compensation Settlement - - - (18.5) - Interest on Federal Income Tax Refund - 2.6 - 2.6 - Cost Related to Early Retirement of Debt (55.6) (2.7) (58.8) (25.8) - Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ (33.3) $ (38.3) $ (164.4) $ (143.0) $ (152.8) See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 12
Unum Group Reserves December 31, 2007 Gross Total Policy Claim Reserves Reinsurance Total Reserves % Incurred IBNR % Total Ceded Net Group Disability $ - - % $ 7,770.4 $ 596.9 33.8 % $ 8,367.3 $ 92.9 $ 8,274.4 Group Life and Accidental Death & Dismemberment 73.9 0.6 772.4 178.5 3.8 1,024.8 3.4 1,021.4 Individual Disability - Recently Issued 458.4 3.8 822.4 72.5 3.6 1,353.3 79.4 1,273.9 Long-term Care 2,478.2 20.4 244.3 32.6 1.1 2,755.1 52.6 2,702.5 Voluntary Benefits 853.1 7.0 19.1 35.0 0.2 907.2 14.6 892.6 Unum US Segment 3,863.6 31.8 9,628.6 915.5 42.5 14,407.7 242.9 14,164.8 Unum UK Segment 30.7 0.2 2,420.4 268.8 10.8 2,719.9 149.3 2,570.6 Colonial Segment 1,091.7 9.0 239.9 104.1 1.4 1,435.7 33.4 1,402.3 Individual Disability - Closed Block Segment 1,657.2 13.6 10,013.8 391.7 42.0 12,062.7 1,225.0 10,837.7 Other Segment 5,515.2 45.4 518.3 288.9 3.3 6,322.4 4,770.8 1,551.6 Subtotal, Excluding Unrealized Adjustment $ 12,158.4 100.0 % $ 22,821.0 $ 1,969.0 100.0 % $ 36,948.4 $ 6,421.4 30,527.0 Unrealized Adjustment to Reserves for Unrealized Investment Gains 859.3 Consolidated $ 31,386.3 The decrease in the Unum US segment and Individual Disability - Closed Block segment IBNR from December 31, 2006 is due to the release of reserves to cover costs for the multistate market conduct examination settlement agreements and the California settlement agreement and related matters and a slight decline in insured lives in the group disability, group life, and accidental death and dismemberment lines of business. Offsetting the release for Unum US group disability is the second quarter of 2007 claim reassessment revision to increase reserves $76.5 million. The increase in Unum US Policy and Claim Reserves Incurred from December 31, 2006 is due to growth in the disabled life reserves in the Unum US group disability line of business and growth in the active life reserves for the Unum US long-term care and individual disability - recently issued lines of business. 13
Unum Group Reserves December 31, 2006 Gross Total Policy Claim Reserves Reinsurance Total Reserves % Incurred IBNR % Total Ceded Net Group Disability $ - - % $ 7,563.0 $ 790.3 34.3 % $ 8,353.3 $ 101.5 $ 8,251.8 Group Life and Accidental Death & Dismemberment 63.1 0.5 736.5 202.2 3.9 1,001.8 2.7 999.1 Individual Disability - Recently Issued 431.8 3.4 718.9 71.5 3.3 1,222.2 76.7 1,145.5 Long-term Care 2,067.2 16.4 195.0 31.6 0.9 2,293.8 57.1 2,236.7 Voluntary Benefits 787.9 6.2 22.3 36.3 0.2 846.5 13.3 833.2 Unum US Segment 3,350.0 26.5 9,235.7 1,131.9 42.6 13,717.6 251.3 13,466.3 Unum UK Segment 28.9 0.2 2,252.8 286.4 10.4 2,568.1 142.4 2,425.7 Colonial Segment 1,021.3 8.1 234.5 100.8 1.4 1,356.6 36.7 1,319.9 Individual Disability - Closed Block Segment 1,777.8 14.1 9,794.9 443.9 42.1 12,016.6 1,498.7 10,517.9 Other Segment 6,444.3 51.1 561.4 282.1 3.5 7,287.8 5,686.4 1,601.4 Subtotal, Excluding Unrealized Adjustment $ 12,622.3 100.0 % $ 22,079.3 $ 2,245.1 100.0 % $ 36,946.7 $ 7,615.5 29,331.2 Unrealized Adjustment to Reserves for Unrealized Investment Gains 963.1 Consolidated $ 30,294.3 13.1
Unum Group Investment Fact Sheet at December 31, 2007 Bonds (Fair Value) 12/31/2007 Selected Statistics 12/31/07 9/30/07 Public (1) $ 21,954.9 62.2 % Portfolio Yield (3) 6.66 % 6.70 % Asset-backed Securities 243.4 0.7 Average Duration 8.07 8.36 Residential Mortgage-backed Securities 3,989.4 11.3 Average Credit Quality A A Commercial Mortgage-backed Securities 4.7 - Private Placements 3,918.4 11.1 High Yield 2,007.2 5.7 Government Securities 3,266.5 9.2 Municipal Securities 45.4 0.1 Derivatives Hedging Available-for-Sale (2) (91.2) (0.3) Total $ 35,338.7 100.0 % Quality Ratings of Bonds Book Value Fair Value Schedule BA and Non-Current Aaa 22.8 % 23.2 % Total Non-Current Investments $ 2.6 $ 16.2 Aa 8.6 8.5 Total Schedule BA Assets $ 102.9 $ 107.2 A 25.5 25.3 Baa 37.0 37.3 Below Baa 6.1 5.7 Total 100.0 % 100.0 % (1) Includes $33.8 million of collateralized debt obligations. (2) Excludes DIG Issue B36 embedded derivatives, which at December 31, 2007 had a fair value of $(68.8) million. (3) Bond equivalent yield is a book value and duration weighted average of the yield on the fixed income securities in the portfolio. 14
Unum Group Investment Fact Sheet at December 31, 2007 Fixed Maturity Bonds - By Industry Classification - Unrealized Gain/Loss Fair Value Fair Value of of Bonds Bonds with Net with Gross Gross Gross Gross Fair Value Unrealized Unrealized Unrealized Unrealized Unrealized Classification (1) Gain (Loss) Loss Loss Gain Gain Basic Industry $ 2,281.4 $ 47.5 $ 913.8 $ 50.6 $ 1,367.6 $ 98.1 Canadian 290.0 60.2 - - 290.0 60.2 Capital Goods 2,674.6 105.3 968.3 54.0 1,706.3 159.3 Communications 2,395.9 111.6 841.2 53.6 1,554.7 165.2 Consumer Cyclical 1,348.6 (3.9) 699.6 58.3 649.0 54.4 Consumer Non-Cyclical 4,193.8 91.5 1,723.0 82.7 2,470.8 174.2 Derivatives Hedging Available- for-Sale (91.1) (92.2) (232.6) 232.6 141.5 140.4 Energy (Oil & Gas) 2,455.5 204.2 449.4 16.8 2,006.1 221.0 Financial Institutions 3,536.1 (92.2) 2,563.0 149.1 973.1 56.9 Mortgage/Asset-Backed 4,237.5 230.7 488.8 6.9 3,748.7 237.6 Sovereigns 1,070.4 50.5 558.9 7.5 511.5 58.0 Technology 571.5 8.1 279.9 15.2 291.6 23.3 Transportation 981.1 57.1 322.2 13.0 658.9 70.1 U.S. Government Agencies and Municipalities 2,462.5 149.8 840.9 28.7 1,621.6 178.5 Utilities 6,930.9 179.7 3,169.2 144.3 3,761.7 324.0 Total $ 35,338.7 $ 1,107.9 $ 13,585.6 $ 913.3 $ 21,753.1 $ 2,021.2 Gross Unrealized Loss on Fixed Maturity Bonds By Length of Time in Unrealized Loss Position Investment-Grade Below-Investment-Grade Gross Gross Unrealized Unrealized Category Fair Value Loss Fair Value Loss Less than 91 days $ 657.8 $ 8.7 $ 186.5 $ 5.6 91 through 180 days 500.2 14.4 169.5 11.4 181 through 270 days 1,701.3 48.7 371.7 19.9 271 days to 1 year 925.9 35.4 63.3 11.3 Greater than 1 year 8,527.5 674.3 481.9 83.6 Total $ 12,312.7 $ 781.5 $ 1,272.9 $ 131.8 (1) Excludes DIG Issue B36 embedded derivatives, which at December 31, 2007 had a fair value of $(68.8) million. 14.1
Unum Group Investment Fact Sheet at December 31, 2007 Asset and Mortgage-Backed Securities Portfolio at December 31, 2007 % of Total Bond Fair Average Book Value Fair Value Value Rating Asset-Backed Securities Credit Cards $ 239.4 $ 237.7 5.6 % 0.7 % AAA Rate Reduction Bonds 4.8 4.7 0.1 - AAA Home Equity 1.5 1.0 - - A3 Collateralized Debt Obligations - - - - - Total 245.7 243.4 5.7 0.7 AAA Residential Mortgage-Backed Securities Agency CMOs 3,726.2 3,961.7 93.5 11.2 AAA Whole Loans 24.9 21.9 0.5 0.1 AAA Alt-A 5.5 5.8 0.2 - AAA Subprime - - - - - Collateralized Debt Obligations - - - - - Total 3,756.6 3,989.4 94.2 11.3 AAA Commercial Mortgage-Backed Securities 4.5 4.7 0.1 - AA1 Total $ 4,006.8 $ 4,237.5 100.0 % 12.0 % AAA 14.2
Unum Group Statutory Capital and Surplus As of As of December 31, 2007 December 31, 2006 Capital and Capital and Capital and Surplus AVR Surplus + AVR Surplus + AVR Traditional U.S. Life Insurance Companies Provident Life and Accident $ 435.1 $ 68.1 $ 503.2 $ 1,189.8 Unum Life of America 1,490.5 131.8 1,622.3 1,682.4 Paul Revere Life (1) 458.7 37.9 496.6 1,070.5 Colonial Life & Accident 369.3 19.6 388.9 382.8 Provident Life and Casualty 99.0 2.9 101.9 102.2 First Unum Life 184.0 9.8 193.8 188.8 Paul Revere Variable (1) 114.0 1.1 115.1 110.4 (1) Capital and Surplus of Paul Revere Variable is included in Paul Revere Life Special Purpose Reinsurance Vehicles Tailwind Reinsurance Company $ 125.0 $ 0.2 $ 125.2 $ 136.3 Northwind Reinsurance Company 1,253.7 0.8 1,254.5 - UnumProvident International Ltd. 369.5 - 369.5 125.1 15
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes
unum group 4Q 07_Statistical_Supplement_and_Notes

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unum group 4Q 07_Statistical_Supplement_and_Notes

  • 1. Fourth Quarter 2007 Statistical Supplement www.unum.com
  • 2. Unum Group Statistical Supplement Fourth Quarter 2007 TABLE OF CONTENTS (dollars in millions, except share data) Interim Results are Unaudited Page Financial Highlights 1 Consolidated Statements of Income 2 Sales Data 3 Consolidated Balance Sheets 4 Financial Results by Segment 5 Quarterly Historical Financial Results by Segment 6 Financial Results and Selected Statistics by Segment Unum US 7 Unum UK 8 Colonial 9 Individual Disability - Closed Block 10 Other 11 Corporate 12 Reserves 13 Investment Fact Sheets 14 Statutory-Basis Financial Information 15 Notes to Statistical Supplement 16 Throughout this supplement, segment operating results exclude income taxes and realized investment gains and losses. See quot;Notes to Statistical Supplementquot; on page 16 for a discussion of non-GAAP financial measures. N.M. = not a meaningful percentage
  • 3. Unum Group Financial Highlights Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Financial Results Premium Income $ 1,983.9 $ 2,022.0 $ 7,901.1 $ 7,948.2 $ 7,815.6 Segment Operating Revenue $ 2,669.3 $ 2,695.4 $ 10,585.1 $ 10,533.1 $ 10,266.0 Net Realized Investment Gain (Loss) (25.8) 0.7 (65.2) 2.2 (6.7) Revenue $ 2,643.5 $ 2,696.1 $ 10,519.9 $ 10,535.3 $ 10,259.3 Income from Continuing Operations $ 160.5 $ 274.2 $ 672.4 $ 403.6 $ 504.0 Income from Discontinued Operations, net of tax - 1.9 6.9 7.4 9.6 Net Income $ 160.5 $ 276.1 $ 679.3 $ 411.0 $ 513.6 Assets $ 52,432.7 $ 52,823.3 $ 51,866.8 Stockholders' Equity $ 8,039.9 $ 7,718.8 $ 7,363.9 2007 • Full year 2007 results include a claim reassessment charge of $53.0 million before tax, or $34.5 million after tax. • Fourth quarter 2007 results include costs related to early retirement of debt of $55.6 million before tax, or $36.1 million after tax, and full year 2007 results include $58.8 million before tax, or $38.3 million after tax. 2006 • Full year 2006 results include claim reassessment charges of $411.4 million before tax, or $267.4 million after tax. • Full year 2006 results include broker compensation settlement expenses of $18.5 million before tax, or $12.7 million after tax. • Fourth quarter 2006 results include costs related to early retirement of debt of $2.7 million before tax, or $1.9 million after tax, and full year 2006 results include $25.8 million before tax, or $16.9 million after tax. • Fourth quarter and full year 2006 results include income of $2.6 million before tax, or $3.9 million after tax, attributable to the receipt of interest and tax refunds on prior year tax items in excess of what was previously provided. • Fourth quarter and full year 2006 results include an income tax benefit of approximately $91.9 million as the result of group relief benefits recognized from the use of net operating losses in a foreign jurisdiction in which our businesses operate. 2005 • Full year 2005 results include a claim reassessment charge of $75.0 million before tax, or $51.6 million after tax. • Full year 2005 results include a gain on the sale of the U.K. Netherlands branch of $5.7 million before tax, or $4.0 million after tax. • Full year 2005 results include an income tax benefit of $42.8 million related to the reduction of income tax liabilities. See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 1
  • 4. Unum Group Financial Highlights Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Per Common Share Information Assuming Dilution: Income from Continuing Operations $ 0.44 $ 0.79 $ 1.89 $ 1.21 $ 1.61 Income from Discontinued Operations, net of tax - 0.01 0.02 0.02 0.03 Net Income $ 0.44 $ 0.80 $ 1.91 $ 1.23 $ 1.64 Basic: Income from Continuing Operations $ 0.45 $ 0.80 $ 1.90 $ 1.25 $ 1.71 Income from Discontinued Operations, net of tax - 0.01 0.02 0.02 0.03 Net Income $ 0.45 $ 0.81 $ 1.92 $ 1.27 $ 1.74 Dividends Paid $ 0.075 $ 0.075 $ 0.300 $ 0.300 $ 0.300 Book Value $ 22.28 $ 22.53 $ 24.66 Price (UNM closing price on last trading day of period) $ 23.79 $ 20.78 $ 22.75 1.1
  • 5. Unum Group Consolidated Statements of Income Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Revenue Premium Income $ 1,983.9 $ 2,022.0 $ 7,901.1 $ 7,948.2 $ 7,815.6 Net Investment Income 619.4 601.4 2,409.9 2,320.6 2,188.3 Net Realized Investment Gain (Loss) (25.8) 0.7 (65.2) 2.2 (6.7) Other Income 66.0 72.0 274.1 264.3 262.1 Total Revenue 2,643.5 2,696.1 10,519.9 10,535.3 10,259.3 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 1,715.7 1,812.9 6,988.2 7,577.2 7,083.2 Commissions 210.6 205.5 841.1 819.0 804.7 Interest and Debt Expense - Non-recourse Debt 10.0 1.3 15.7 1.3 - Interest and Debt Expense - All Other Debt 38.8 44.5 167.4 190.5 208.0 Cost Related to Early Retirement of Debt 55.6 2.7 58.8 25.8 - Deferral of Acquisition Costs (142.7) (135.4) (556.3) (528.2) (519.4) Amortization of Deferred Acquisition Costs 120.3 124.9 480.4 478.6 463.7 Other Expenses 409.8 374.1 1,527.4 1,505.7 1,525.2 Total Benefits and Expenses 2,418.1 2,430.5 9,522.7 10,069.9 9,565.4 Income from Continuing Operations Before Income Taxes 225.4 265.6 997.2 465.4 693.9 Income Taxes (Benefit) 64.9 (8.6) 324.8 61.8 189.9 Income from Continuing Operations 160.5 274.2 672.4 403.6 504.0 Income from Discontinued Operations, net of tax - 1.9 6.9 7.4 9.6 Net Income $ 160.5 $ 276.1 $ 679.3 $ 411.0 $ 513.6 Average Number of Shares Outstanding Basic 359,809,213 340,812,551 352,969,131 324,654,923 295,776,405 Dilutive Securities: Purchase Contracts - 3,006,443 1,672,949 8,153,001 14,297,834 Options and Other Dilutive Securities 898,404 1,708,851 1,134,373 1,553,820 2,438,404 Assuming Dilution 360,707,617 345,527,845 355,776,453 334,361,744 312,512,643 Actual Number of Shares Outstanding 360,893,475 342,627,521 298,557,764 2
  • 6. Unum Group Sales Data Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 12/31/2005 Unum US Segment Fully Insured Products Group Long-term Disability $ 75.3 $ 89.1 (15.5) % $ 177.7 $ 208.5 $ 180.4 Group Short-term Disability 24.8 33.5 (26.0) 64.7 74.1 74.8 Group Life 61.3 55.4 10.6 134.0 149.8 157.8 Accidental Death & Dismemberment 6.2 6.0 3.3 13.8 13.7 14.7 Individual Disability - Recently Issued 15.5 16.4 (5.5) 59.7 55.4 53.8 Group Long-term Care 11.4 11.3 0.9 32.8 25.1 21.1 Individual Long-term Care 3.3 2.6 26.9 9.9 11.0 13.0 Voluntary Benefits 29.1 25.5 14.1 138.4 134.2 130.2 Total Fully Insured Products 226.9 239.8 (5.4) 631.0 671.8 645.8 Administrative Services Only (ASO) Products Group Long-term Disability - 3.2 (100.0) 1.6 3.7 1.8 Group Short-term Disability 2.6 6.4 (59.4) 5.6 10.0 5.8 Total ASO Products 2.6 9.6 (72.9) 7.2 13.7 7.6 Unum US Segment 229.5 249.4 (8.0) 638.2 685.5 653.4 Unum UK Segment Group Long-term Disability 29.3 39.8 (26.4) 84.4 79.1 91.2 Group Life 3.0 2.8 7.1 13.2 16.5 33.0 Individual Disability 2.3 1.4 64.3 7.8 5.5 8.1 Unum UK Segment 34.6 44.0 (21.4) 105.4 101.1 132.3 Colonial Segment Accident, Sickness, and Disability 71.9 60.0 19.8 211.3 194.4 176.8 Life 22.0 22.1 (0.5) 66.7 66.6 60.6 Cancer and Critical Illness 20.3 19.8 2.5 56.9 54.1 49.0 Colonial Segment 114.2 101.9 12.1 334.9 315.1 286.4 Individual Disability - Closed Block Segment 0.7 0.9 (22.2) 3.0 4.4 6.5 Total Sales $ 379.0 $ 396.2 (4.3) $ 1,081.5 $ 1,106.1 $ 1,078.6 3
  • 7. Unum Group Consolidated Balance Sheets December 31, 2007 2006 Assets Investments Fixed Maturity Securities $ 35,654.7 $ 35,001.5 Mortgage Loans 1,068.9 944.0 Real Estate 18.2 17.9 Policy Loans 2,617.7 3,429.5 Other Long-term Investments 104.7 122.0 Short-term Investments 1,486.8 648.4 Total Investments 40,951.0 40,163.3 Cash and Bank Deposits 199.1 121.3 Accounts and Premiums Receivable 1,914.7 2,057.1 Reinsurance Recoverable 5,160.0 5,512.2 Accrued Investment Income 592.3 646.8 Deferred Acquisition Costs 2,381.9 2,983.1 Goodwill 204.3 204.1 Other Assets 1,009.2 994.6 Other Assets - Discontinued Operations - 112.3 Separate Account Assets 20.2 28.5 Total Assets $ 52,432.7 $ 52,823.3 Liabilities Policy and Contract Benefits $ 1,979.7 $ 2,220.4 Reserves for Future Policy and Contract Benefits 35,828.0 35,689.4 Unearned Premiums 523.1 520.1 Other Policyholders' Funds 1,821.2 2,019.1 Income Tax 400.3 611.7 Short-term Debt 175.0 - Long-term Debt - Non-recourse 912.5 130.0 Long-term Debt - All Other 1,602.7 2,529.6 Other Liabilities 1,130.1 1,326.7 Other Liabilities - Discontinued Operations - 29.0 Separate Account Liabilities 20.2 28.5 Total Liabilities 44,392.8 45,104.5 Stockholders' Equity Common Stock 36.3 34.4 Additional Paid-in Capital 2,516.9 2,200.0 Accumulated Other Comprehensive Income 463.5 612.8 Retained Earnings 5,077.4 4,925.8 Treasury Stock (54.2) (54.2) Total Stockholders' Equity 8,039.9 7,718.8 Total Liabilities and Stockholders' Equity $ 52,432.7 $ 52,823.3 4
  • 8. Unum Group Deferred Acquisition Costs by Segment Unum US Unum UK Colonial Other Consolidated Balances at December 31, 2004 $ 2,196.2 $ 154.9 $ 530.9 $ 0.5 $ 2,882.5 Capitalized 311.9 34.1 173.4 - 519.4 Amortized (306.9) (21.6) (134.7) (0.5) (463.7) Foreign Currency - (24.9) - - (24.9) Balances at December 31, 2005 2,201.2 142.5 569.6 - 2,913.3 Capitalized 306.2 34.4 187.6 - 528.2 Amortized (302.2) (32.0) (144.4) - (478.6) Foreign Currency - 20.2 - - 20.2 Balances at December 31, 2006 2,205.2 165.1 612.8 - 2,983.1 Cumulative Effect of SOP 05-1 (589.8) (88.3) - - (678.1) Capitalized 304.2 41.2 210.9 - 556.3 Amortized (277.1) (49.4) (153.9) - (480.4) Foreign Currency - 1.0 - - 1.0 Balances at December 31, 2007 $ 1,642.5 $ 69.6 $ 669.8 $ - $ 2,381.9 4.1
  • 9. Unum Group Balance Sheets by Segment - December 31, 2007 Unum US Group Life and Accidental Supplemental Individual Group Death & and Total Disability - Corporate Disability Dismemberment Voluntary Unum US Unum UK Colonial Closed Block and Other Consolidated Assets Investments $ 10,011.0 $ 2,144.9 $ 5,819.8 $ 17,975.7 $ 3,423.6 $ 1,658.0 $ 12,078.5 $ 5,815.2 $ 40,951.0 Deferred Acquisition Costs 145.6 100.4 1,396.5 1,642.5 69.6 669.8 - - 2,381.9 Goodwill 2.5 - 187.5 190.0 14.3 - - - 204.3 All Other 724.5 102.1 378.0 1,204.6 509.0 190.7 3,097.1 3,894.1 8,895.5 Total Assets $ 10,883.6 $ 2,347.4 $ 7,781.8 $ 21,012.8 $ 4,016.5 $ 2,518.5 $ 15,175.6 $ 9,709.3 $ 52,432.7 Liabilities Reserves and Policyholder Benefits $ 8,836.9 $ 1,514.0 $ 5,171.1 $ 15,522.0 $ 2,867.1 $ 1,464.5 $ 12,679.9 $ 7,618.5 $ 40,152.0 Debt - - - - - - - 2,690.2 2,690.2 All Other 182.5 10.7 380.0 573.2 167.2 162.3 7.4 640.5 1,550.6 Total Liabilities 9,019.4 1,524.7 5,551.1 16,095.2 3,034.3 1,626.8 12,687.3 10,949.2 44,392.8 Other Allocated Stockholders' Equity 1,932.5 799.0 1,945.9 4,677.4 899.5 868.1 2,322.8 (1,266.5) 7,501.3 Unrealized Gain/Loss on Securities (68.3) 23.7 284.8 240.2 82.7 23.6 165.5 26.6 538.6 Total Allocated Stockholders' Equity 1,864.2 822.7 2,230.7 4,917.6 982.2 891.7 2,488.3 (1,239.9) 8,039.9 Total Liabilities and Allocated Stockholders' Equity $ 10,883.6 $ 2,347.4 $ 7,781.8 $ 21,012.8 $ 4,016.5 $ 2,518.5 $ 15,175.6 $ 9,709.3 $ 52,432.7 Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements. 4.2
  • 10. Unum Group Balance Sheets by Segment - December 31, 2006 Unum US Group Life Corporate, and Accidental Supplemental Individual Other, and Group Death & and Total Disability - Discontinued Disability Dismemberment Voluntary Unum US Unum UK Colonial Closed Block Operations Consolidated Assets Investments $ 9,618.2 $ 2,272.1 $ 5,093.6 $ 16,983.9 $ 3,216.9 $ 1,524.8 $ 12,244.8 $ 6,192.9 $ 40,163.3 Deferred Acquisition Costs 571.9 273.1 1,360.2 2,205.2 165.1 612.8 - - 2,983.1 Goodwill 2.5 - 187.5 190.0 14.1 - - - 204.1 All Other 968.4 104.6 448.7 1,521.7 508.1 217.4 3,364.7 3,860.9 9,472.8 Total Assets $ 11,161.0 $ 2,649.8 $ 7,090.0 $ 20,900.8 $ 3,904.2 $ 2,355.0 $ 15,609.5 $ 10,053.8 $ 52,823.3 Liabilities Reserves and Policyholder Benefits $ 8,756.5 $ 1,564.8 $ 4,548.5 $ 14,869.8 $ 2,750.9 $ 1,382.5 $ 12,684.3 $ 8,761.5 $ 40,449.0 Debt - - - - - - - 2,659.6 2,659.6 All Other 365.3 82.3 398.4 846.0 179.5 147.5 26.2 796.7 1,995.9 Total Liabilities 9,121.8 1,647.1 4,946.9 15,715.8 2,930.4 1,530.0 12,710.5 12,217.8 45,104.5 Other Allocated Stockholders' Equity 2,012.3 973.6 1,834.5 4,820.4 899.6 791.5 2,640.0 (2,161.7) 6,989.8 Unrealized Gain/Loss on Securities 26.9 29.1 308.6 364.6 74.2 33.5 259.0 (2.3) 729.0 Total Allocated Stockholders' Equity 2,039.2 1,002.7 2,143.1 5,185.0 973.8 825.0 2,899.0 (2,164.0) 7,718.8 Total Liabilities and Allocated Stockholders' Equity $ 11,161.0 $ 2,649.8 $ 7,090.0 $ 20,900.8 $ 3,904.2 $ 2,355.0 $ 15,609.5 $ 10,053.8 $ 52,823.3 4.3
  • 11. Unum Group Financial Results by Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change Premium Income Unum US $ 1,248.1 $ 1,302.0 (4.1) % $ 5,014.0 $ 5,196.0 (3.5) % Unum UK 251.4 231.0 8.8 968.3 842.8 14.9 Colonial 232.0 217.2 6.8 907.2 842.1 7.7 Individual Disability - Closed Block 252.2 269.8 (6.5) 1,009.9 1,062.8 (5.0) Other 0.2 2.0 (90.0) 1.7 4.5 (62.2) 1,983.9 2,022.0 (1.9) 7,901.1 7,948.2 (0.6) Net Investment Income Unum US 283.0 284.6 (0.6) 1,129.9 1,063.1 6.3 Unum UK 57.3 50.9 12.6 200.4 174.6 14.8 Colonial 25.6 24.0 6.7 99.9 93.6 6.7 Individual Disability - Closed Block 205.6 205.5 - 827.2 828.7 (0.2) Other 28.7 28.1 2.1 108.4 113.2 (4.2) Corporate 19.2 8.3 131.3 44.1 47.4 (7.0) 619.4 601.4 3.0 2,409.9 2,320.6 3.8 Other Income Unum US 33.7 27.7 21.7 135.7 108.5 25.1 Unum UK 0.4 0.1 N.M. 3.1 0.1 N.M. Colonial - 0.2 (100.0) 0.9 1.1 (18.2) Individual Disability - Closed Block 25.1 29.4 (14.6) 103.7 105.1 (1.3) Other 6.3 8.8 (28.4) 28.5 33.8 (15.7) Corporate 0.5 5.8 (91.4) 2.2 15.7 (86.0) 66.0 72.0 (8.3) 274.1 264.3 3.7 Total Operating Revenue Unum US 1,564.8 1,614.3 (3.1) 6,279.6 6,367.6 (1.4) Unum UK 309.1 282.0 9.6 1,171.8 1,017.5 15.2 Colonial 257.6 241.4 6.7 1,008.0 936.8 7.6 Individual Disability - Closed Block 482.9 504.7 (4.3) 1,940.8 1,996.6 (2.8) Other 35.2 38.9 (9.5) 138.6 151.5 (8.5) Corporate 19.7 14.1 39.7 46.3 63.1 (26.6) 2,669.3 2,695.4 (1.0) 10,585.1 10,533.1 0.5 5
  • 12. Unum Group Financial Results by Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 % Change 12/31/2007 12/31/2006 % Change Benefits and Expenses Unum US $ 1,398.2 $ 1,478.4 (5.4) % $ 5,714.0 $ 6,271.9 (8.9) % Unum UK 224.1 200.2 11.9 833.0 759.7 9.6 Colonial 198.8 190.9 4.1 762.2 738.1 3.3 Individual Disability - Closed Block 459.5 476.0 (3.5) 1,822.9 1,925.3 (5.3) Other 28.9 32.5 (11.1) 121.1 127.1 (4.7) Corporate 108.6 52.5 106.9 269.5 247.8 8.8 2,418.1 2,430.5 (0.5) 9,522.7 10,069.9 (5.4) Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss) Unum US 166.6 135.9 22.6 565.6 95.7 N.M. Unum UK 85.0 81.8 3.9 338.8 257.8 31.4 Colonial 58.8 50.5 16.4 245.8 198.7 23.7 Individual Disability - Closed Block 23.4 28.7 (18.5) 117.9 71.3 65.4 Other 6.3 6.4 (1.6) 17.5 24.4 (28.3) Corporate (88.9) (38.4) (131.5) (223.2) (184.7) (20.8) 251.2 264.9 (5.2) 1,062.4 463.2 129.4 Income Taxes (Benefit) 74.2 (8.8) N.M. 346.8 61.1 N.M. Income from Continuing Operations Before Net Realized Investment Gain (Loss) 177.0 273.7 (35.3) 715.6 402.1 78.0 Net Realized Investment Gain (Loss) (25.8) 0.7 N.M. (65.2) 2.2 N.M. Tax Expense (Benefit) on Net Realized Investment Gain (Loss) (9.3) 0.2 N.M. (22.0) 0.7 N.M. Income from Discontinued Operations, net of tax - 1.9 (100.0) 6.9 7.4 (6.8) Net Income $ 160.5 $ 276.1 (41.9) $ 679.3 $ 411.0 65.3 Note: See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 5.1
  • 13. Unum Group Quarterly Historical Financial Results by Segment 12/31/07 9/30/07 6/30/07 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Premium Income Unum US $ 1,248.1 $ 1,255.3 $ 1,265.7 $ 1,244.9 $ 1,302.0 $ 1,278.6 $ 1,311.6 $ 1,303.8 $ 1,309.0 Unum UK 251.4 247.6 247.0 222.3 231.0 219.7 200.7 191.4 198.2 Colonial 232.0 227.0 224.8 223.4 217.2 212.8 209.5 202.6 200.5 Individual Disability - Closed Block 252.2 256.0 249.4 252.3 269.8 257.8 264.2 271.0 279.3 Other 0.2 0.6 (0.2) 1.1 2.0 0.1 1.2 1.2 1.4 1,983.9 1,986.5 1,986.7 1,944.0 2,022.0 1,969.0 1,987.2 1,970.0 1,988.4 Net Investment Income Unum US 283.0 283.1 286.9 276.9 284.6 261.9 258.9 257.7 255.4 Unum UK 57.3 47.4 49.9 45.8 50.9 45.8 39.9 38.0 37.7 Colonial 25.6 25.0 24.9 24.4 24.0 23.6 23.4 22.6 24.3 Individual Disability - Closed Block 205.6 213.6 203.4 204.6 205.5 207.0 214.0 202.2 207.5 Other 28.7 24.7 26.9 28.1 28.1 28.0 28.4 28.7 29.1 Corporate 19.2 9.4 5.8 9.7 8.3 12.5 12.0 14.6 10.9 619.4 603.2 597.8 589.5 601.4 578.8 576.6 563.8 564.9 Other Income Unum US 33.7 32.8 34.5 34.7 27.7 27.3 28.1 25.4 28.6 Unum UK 0.4 0.7 0.3 1.7 0.1 - (0.1) 0.1 - Colonial - 0.3 0.3 0.3 0.2 0.2 0.4 0.3 0.9 Individual Disability - Closed Block 25.1 27.5 25.8 25.3 29.4 25.5 23.9 26.3 25.0 Other 6.3 4.9 9.1 8.2 8.8 8.3 8.4 8.3 10.6 Corporate 0.5 0.4 0.7 0.6 5.8 3.5 3.0 3.4 (0.6) 66.0 66.6 70.7 70.8 72.0 64.8 63.7 63.8 64.5 Total Operating Revenue Unum US 1,564.8 1,571.2 1,587.1 1,556.5 1,614.3 1,567.8 1,598.6 1,586.9 1,593.0 Unum UK 309.1 295.7 297.2 269.8 282.0 265.5 240.5 229.5 235.9 Colonial 257.6 252.3 250.0 248.1 241.4 236.6 233.3 225.5 225.7 Individual Disability - Closed Block 482.9 497.1 478.6 482.2 504.7 490.3 502.1 499.5 511.8 Other 35.2 30.2 35.8 37.4 38.9 36.4 38.0 38.2 41.1 Corporate 19.7 9.8 6.5 10.3 14.1 16.0 15.0 18.0 10.3 2,669.3 2,656.3 2,655.2 2,604.3 2,695.4 2,612.6 2,627.5 2,597.6 2,617.8 6
  • 14. Unum Group Quarterly Historical Financial Results by Segment 12/31/07 9/30/07 6/30/07 3/31/07 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Benefits and Expenses Unum US $ 1,398.2 $ 1,406.9 $ 1,494.8 $ 1,414.1 $ 1,478.4 $ 1,741.0 $ 1,494.1 $ 1,558.4 $ 1,489.1 Unum UK 224.1 194.7 219.5 194.7 200.2 200.0 184.4 175.1 186.6 Colonial 198.8 189.8 185.1 188.5 190.9 184.5 183.4 179.3 187.0 Individual Disability - Closed Block 459.5 467.7 436.0 459.7 476.0 495.6 468.9 484.8 478.1 Other 28.9 26.6 31.8 33.8 32.5 28.6 32.6 33.4 36.4 Corporate 108.6 45.5 65.5 49.9 52.5 65.1 68.7 61.5 53.3 2,418.1 2,331.2 2,432.7 2,340.7 2,430.5 2,714.8 2,432.1 2,492.5 2,430.5 Income (Loss) from Continuing Operations Before Income Taxes and Net Realized Investment Gain (Loss) Unum US 166.6 164.3 92.3 142.4 135.9 (173.2) 104.5 28.5 103.9 Unum UK 85.0 101.0 77.7 75.1 81.8 65.5 56.1 54.4 49.3 Colonial 58.8 62.5 64.9 59.6 50.5 52.1 49.9 46.2 38.7 Individual Disability - Closed Block 23.4 29.4 42.6 22.5 28.7 (5.3) 33.2 14.7 33.7 Other 6.3 3.6 4.0 3.6 6.4 7.8 5.4 4.8 4.7 Corporate (88.9) (35.7) (59.0) (39.6) (38.4) (49.1) (53.7) (43.5) (43.0) 251.2 325.1 222.5 263.6 264.9 (102.2) 195.4 105.1 187.3 Income Taxes (Benefit) 74.2 108.1 75.5 89.0 (8.8) (33.8) 68.5 35.2 54.0 Income (Loss) from Continuing Operations Before Net Realized Investment Gain (Loss) 177.0 217.0 147.0 174.6 273.7 (68.4) 126.9 69.9 133.3 Net Realized Investment Gain (Loss) (25.8) (46.1) 10.4 (3.7) 0.7 4.8 (5.8) 2.5 2.4 Tax Expense (Benefit) on Net Realized Investment Gain (Loss) (9.3) (16.1) 3.9 (0.5) 0.2 1.7 (2.2) 1.0 0.9 Income from Discontinued Operations, net of tax - - - 6.9 1.9 1.6 1.9 2.0 2.7 Net Income (Loss) $ 160.5 $ 187.0 $ 153.5 $ 178.3 $ 276.1 $ (63.7) $ 125.2 $ 73.4 $ 137.5 Per Common Share - Assuming Dilution Income (Loss) from Continuing Operations $ 0.44 $ 0.52 $ 0.43 $ 0.49 $ 0.79 $ (0.19) $ 0.37 $ 0.22 $ 0.42 Income from Discontinued Operations, net of tax - - - 0.02 0.01 - 0.01 0.01 0.01 Net Income (Loss) $ 0.44 $ 0.52 $ 0.43 $ 0.51 $ 0.80 $ (0.19) $ 0.38 $ 0.23 $ 0.43 Note: See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 6.1
  • 15. Unum Group Financial Results for Unum US Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 1,248.1 $ 1,302.0 $ 5,014.0 $ 5,196.0 $ 5,229.0 Net Investment Income 283.0 284.6 1,129.9 1,063.1 998.2 Other Income 33.7 27.7 135.7 108.5 108.6 Total Operating Revenue 1,564.8 1,614.3 6,279.6 6,367.6 6,335.8 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 1,019.0 1,107.5 4,246.4 4,752.1 4,419.3 Commissions 124.1 125.2 501.5 505.2 501.6 Deferral of Acquisition Costs (78.2) (78.0) (304.2) (306.2) (311.9) Amortization of Deferred Acquisition Costs 68.8 71.9 277.1 302.2 306.9 Other Expenses 264.5 251.8 993.2 1,018.6 1,032.2 Total Benefits and Expenses 1,398.2 1,478.4 5,714.0 6,271.9 5,948.1 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 166.6 $ 135.9 $ 565.6 $ 95.7 $ 387.7 Operating Ratios Benefit Ratio 81.6 % 85.1 % 84.7 % 91.5 % 84.5 % Other Expense Ratio 21.2 % 19.3 % 19.8 % 19.6 % 19.7 % Before-tax Profit Margin 13.3 % 10.4 % 11.3 % 1.8 % 7.4 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 166.6 $ 135.9 $ 565.6 $ 95.7 $ 387.7 Settlement Agreements Claim Reassessment - Reserve Charge - - (76.5) (349.2) (29.6) Settlement Agreements Claim Reassessment - Other Expense Charge - - 10.3 (15.0) (11.1) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 166.6 $ 135.9 $ 631.8 $ 459.9 $ 428.4 Operating Ratios, as Adjusted Benefit Ratio 81.6 % 85.1 % 83.2 % 84.7 % 83.9 % Other Expense Ratio 21.2 % 19.3 % 20.0 % 19.3 % 19.5 % Before-tax Profit Margin 13.3 % 10.4 % 12.6 % 8.9 % 8.2 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7
  • 16. Unum Group Financial Results for Unum US Group Disability Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Long-term Disability $ 473.3 $ 493.8 $ 1,895.7 $ 1,953.3 $ 1,961.6 Group Short-term Disability 115.3 131.3 485.6 530.2 566.3 Total Premium Income 588.6 625.1 2,381.3 2,483.5 2,527.9 Net Investment Income 154.9 168.4 636.0 621.9 605.7 Other Income 26.5 20.6 100.2 82.3 80.3 Total Operating Revenue 770.0 814.1 3,117.5 3,187.7 3,213.9 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 538.7 587.6 2,277.4 2,702.5 2,397.7 Commissions 40.3 43.0 167.7 175.8 175.1 Deferral of Acquisition Costs (15.2) (16.1) (60.4) (64.5) (64.6) Amortization of Deferred Acquisition Costs 16.6 20.8 66.2 86.4 92.2 Other Expenses 148.3 143.7 561.6 588.6 582.5 Total Benefits and Expenses 728.7 779.0 3,012.5 3,488.8 3,182.9 Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses $ 41.3 $ 35.1 $ 105.0 $ (301.1) $ 31.0 Operating Ratios Benefit Ratio 91.5 % 94.0 % 95.6 % 108.8 % 94.8 % Other Expense Ratio 25.2 % 23.0 % 23.6 % 23.7 % 23.0 % Before-tax Profit (Loss) Margin 7.0 % 5.6 % 4.4 % (12.1)% 1.2 % Premium Persistency: Group Long-term Disability 85.1 % 87.8 % 84.8 % Group Short-term Disability 74.0 % 85.6 % 79.6 % Case Persistency: Group Long-term Disability 88.4 % 87.4 % 87.2 % Group Short-term Disability 87.4 % 86.2 % 85.6 % 7.1
  • 17. Unum Group Financial Results for Unum US Group Disability - Continued Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Income (Loss) Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 41.3 $ 35.1 $ 105.0 $ (301.1) $ 31.0 Settlement Agreements Claim Reassessment - Reserve Charge - - (76.5) (349.2) (27.3) Settlement Agreements Claim Reassessment - Other Expense Charge - - 10.3 (15.0) (10.1) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 41.3 $ 35.1 $ 171.2 $ 63.1 $ 68.4 Operating Ratios, as Adjusted Benefit Ratio 91.5 % 94.0 % 92.4 % 94.8 % 93.8 % Other Expense Ratio 25.2 % 23.0 % 24.0 % 23.1 % 22.6 % Before-tax Profit Margin 7.0 % 5.6 % 7.2 % 2.5 % 2.7 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7.2
  • 18. Unum Group Financial Results for Unum US Group Life and Accidental Death and Dismemberment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Life $ 273.1 $ 311.0 $ 1,107.4 $ 1,248.1 $ 1,306.8 Accidental Death & Dismemberment 33.3 37.8 131.0 151.6 156.4 Total Premium Income 306.4 348.8 1,238.4 1,399.7 1,463.2 Net Investment Income 32.5 35.6 134.9 141.3 151.9 Other Income 0.5 - 2.4 - 2.0 Total Operating Revenue 339.4 384.4 1,375.7 1,541.0 1,617.1 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 212.9 264.9 901.6 1,067.3 1,111.9 Commissions 22.4 23.0 88.7 90.1 97.8 Deferral of Acquisition Costs (9.8) (9.0) (36.1) (37.7) (42.7) Amortization of Deferred Acquisition Costs 10.3 16.2 39.4 65.0 73.0 Other Expenses 43.5 43.0 164.9 178.3 188.3 Total Benefits and Expenses 279.3 338.1 1,158.5 1,363.0 1,428.3 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 60.1 $ 46.3 $ 217.2 $ 178.0 $ 188.8 Operating Ratios Benefit Ratio 69.5 % 75.9 % 72.8 % 76.3 % 76.0 % Other Expense Ratio 14.2 % 12.3 % 13.3 % 12.7 % 12.9 % Before-tax Profit Margin 19.6 % 13.3 % 17.5 % 12.7 % 12.9 % Premium Persistency: Group Life 78.8 % 81.2 % 78.3 % Accidental Death & Dismemberment 80.8 % 82.8 % 76.9 % Case Persistency: Group Life 87.7 % 86.9 % 86.3 % Accidental Death & Dismemberment 88.0 % 87.0 % 86.4 % 7.3
  • 19. Unum Group Financial Results for Unum US Supplemental and Voluntary Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Individual Disability - Recently Issued $ 113.2 $ 105.9 $ 456.7 $ 438.5 $ 425.1 Long-term Care 137.1 126.5 532.9 492.4 473.2 Voluntary Benefits 102.8 95.7 404.7 381.9 339.6 Total Premium Income 353.1 328.1 1,394.3 1,312.8 1,237.9 Net Investment Income 95.6 80.6 359.0 299.9 240.6 Other Income 6.7 7.1 33.1 26.2 26.3 Total Operating Revenue 455.4 415.8 1,786.4 1,638.9 1,504.8 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 267.4 255.0 1,067.4 982.3 909.7 Commissions 61.4 59.2 245.1 239.3 228.7 Deferral of Acquisition Costs (53.2) (52.9) (207.7) (204.0) (204.6) Amortization of Deferred Acquisition Costs 41.9 34.9 171.5 150.8 141.7 Other Expenses 72.7 65.1 266.7 251.7 261.4 Total Benefits and Expenses 390.2 361.3 1,543.0 1,420.1 1,336.9 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 167.9 Operating Ratios Benefit Ratios Individual Disability - Recently Issued 53.1 % 61.5 % 56.7 % 58.0 % 57.5 % Long-term Care 104.7 % 101.7 % 106.0 % 99.2 % 93.0 % Voluntary Benefits 62.1 % 64.1 % 60.1 % 62.7 % 66.3 % Other Expense Ratio 20.6 % 19.8 % 19.1 % 19.2 % 21.1 % Before-tax Profit Margin 18.5 % 16.6 % 17.5 % 16.7 % 13.6 % Interest Adjusted Loss Ratios Individual Disability - Recently Issued 35.8 % 45.7 % 40.8 % 43.5 % 44.4 % Long-term Care 75.5 % 74.3 % 77.7 % 73.1 % 70.9 % 7.4
  • 20. Unum Group Financial Results for Unum US Supplemental and Voluntary - Continued Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Premium Persistency: Individual Disability - Recently Issued 90.6 % 90.5 % 89.6 % Long-term Care 95.4 % 95.3 % 95.8 % Voluntary Benefits 79.4 % 80.9 % 81.1 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 167.9 Settlement Agreements Claim Reassessment - Reserve Charge - - - - (2.3) Settlement Agreements Claim Reassessment - Other Expense Charge - - - - (1.0) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 65.2 $ 54.5 $ 243.4 $ 218.8 $ 171.2 Operating Ratios, as Adjusted Benefit Ratios Individual Disability - Recently Issued 53.1 % 61.5 % 56.7 % 58.0 % 57.0 % Long-term Care 104.7 % 101.7 % 106.0 % 99.2 % 93.0 % Voluntary Benefits 62.1 % 64.1 % 60.1 % 62.7 % 66.3 % Other Expense Ratio 20.6 % 19.8 % 19.1 % 19.2 % 21.0 % Before-tax Profit Margin 18.5 % 16.6 % 17.5 % 16.7 % 13.8 % Interest Adjusted Loss Ratios, as Adjusted Individual Disability - Recently Issued 35.8 % 45.7 % 40.8 % 43.5 % 43.8 % Long-term Care 75.5 % 74.3 % 77.7 % 73.1 % 70.9 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 7.5
  • 21. Unum Group Financial Results for Unum UK Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Group Long-term Disability $ 191.0 $ 171.7 $ 752.6 $ 638.9 $ 582.9 Group Life 50.4 50.4 177.4 171.0 164.1 Individual Disability 10.0 8.9 38.3 32.9 38.3 Total Premium Income 251.4 231.0 968.3 842.8 785.3 Net Investment Income 57.3 50.9 200.4 174.6 154.2 Other Income 0.4 0.1 3.1 0.1 6.1 Total Operating Revenue 309.1 282.0 1,171.8 1,017.5 945.6 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 152.9 139.0 574.3 553.5 545.8 Commissions 17.7 12.8 67.0 49.7 56.4 Deferral of Acquisition Costs (11.0) (8.8) (41.2) (34.4) (34.1) Amortization of Deferred Acquisition Costs 12.8 15.0 49.4 32.0 21.6 Other Expenses 51.7 42.2 183.5 158.9 168.2 Total Benefits and Expenses 224.1 200.2 833.0 759.7 757.9 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 187.7 Operating Ratios Benefit Ratio 60.8 % 60.2 % 59.3 % 65.7 % 69.5 % Other Expense Ratio 20.6 % 18.3 % 19.0 % 18.9 % 21.4 % Before-tax Profit Margin 33.8 % 35.4 % 35.0 % 30.6 % 23.9 % Premium Persistency: Group Long-term Disability 88.0 % 90.4 % 94.2 % Group Life 70.5 % 69.1 % 86.3 % Individual Disability 89.4 % 88.2 % 88.4 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 187.7 Gain on Sale of Netherlands Branch - - - - 5.7 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 85.0 $ 81.8 $ 338.8 $ 257.8 $ 182.0 Operating Ratio, as Adjusted Before-tax Profit Margin 33.8 % 35.4 % 35.0 % 30.6 % 23.2 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 8
  • 22. Unum Group Financial Results for Colonial Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income Accident, Sickness, and Disability $ 144.7 $ 136.4 $ 566.6 $ 533.3 $ 508.9 Life 37.0 34.8 143.5 130.5 114.0 Cancer and Critical Illness 50.3 46.0 197.1 178.3 164.1 Total Premium Income 232.0 217.2 907.2 842.1 787.0 Net Investment Income 25.6 24.0 99.9 93.6 96.0 Other Income - 0.2 0.9 1.1 4.4 Total Operating Revenue 257.6 241.4 1,008.0 936.8 887.4 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 111.4 113.5 437.8 441.4 433.2 Commissions 51.8 47.1 201.6 184.9 170.7 Deferral of Acquisition Costs (53.5) (48.6) (210.9) (187.6) (173.4) Amortization of Deferred Acquisition Costs 38.7 38.0 153.9 144.4 134.7 Other Expenses 50.4 40.9 179.8 155.0 154.1 Total Benefits and Expenses 198.8 190.9 762.2 738.1 719.3 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 58.8 $ 50.5 $ 245.8 $ 198.7 $ 168.1 Operating Ratios Benefit Ratio 48.0 % 52.3 % 48.3 % 52.4 % 55.0 % Other Expense Ratio 21.7 % 18.8 % 19.8 % 18.4 % 19.6 % Before-tax Profit Margin 25.3 % 23.3 % 27.1 % 23.6 % 21.4 % Premium Persistency: Accident, Sickness, and Disability 75.9 % 74.9 % 75.3 % Life 83.8 % 84.2 % 84.1 % Cancer and Critical Illness 84.1 % 82.3 % 83.2 % 9
  • 23. Unum Group Financial Results for Individual Disability - Closed Block Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 252.2 $ 269.8 $ 1,009.9 $ 1,062.8 $ 1,011.7 Net Investment Income 205.6 205.5 827.2 828.7 770.0 Other Income 25.1 29.4 103.7 105.1 95.2 Total Operating Revenue 482.9 504.7 1,940.8 1,996.6 1,876.9 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 404.9 421.7 1,614.5 1,709.7 1,562.7 Commissions 16.6 18.5 69.1 76.2 74.9 Other Expenses 38.0 35.8 139.3 139.4 159.4 Total Benefits and Expenses 459.5 476.0 1,822.9 1,925.3 1,797.0 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 23.4 $ 28.7 $ 117.9 $ 71.3 $ 79.9 Operating Ratios Interest Adjusted Loss Ratio 91.2 % 93.8 % 91.4 % 97.3 % 89.3 % Premium Persistency 94.3 % 94.4 % 94.5 % Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ 23.4 $ 28.7 $ 117.9 $ 71.3 $ 79.9 Settlement Agreements Claim Reassessment - Reserve Charge - - 10.7 (47.2) (23.1) Settlement Agreements Claim Reassessment - Other Expense Charge - - 2.5 - (11.2) Operating Income Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ 23.4 $ 28.7 $ 104.7 $ 118.5 $ 114.2 Interest Adjusted Loss Ratio, as Adjusted 91.2 % 93.8 % 92.5 % 92.9 % 87.3 % See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 10
  • 24. Unum Group Financial Results for Other Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Premium Income $ 0.2 $ 2.0 $ 1.7 $ 4.5 $ 2.6 Net Investment Income 28.7 28.1 108.4 113.2 120.5 Other Income 6.3 8.8 28.5 33.8 36.0 Total Operating Revenue 35.2 38.9 138.6 151.5 159.1 Benefits and Expenses Benefits and Change in Reserves for Future Benefits 27.5 31.2 115.2 120.5 122.2 Commissions 0.4 1.9 1.9 3.0 1.1 Amortization of Deferred Acquisition Costs - - - - 0.5 Other Expenses 1.0 (0.6) 4.0 3.6 5.3 Total Benefits and Expenses 28.9 32.5 121.1 127.1 129.1 Operating Income Before Income Taxes and Net Realized Investment Gains and Losses $ 6.3 $ 6.4 $ 17.5 $ 24.4 $ 30.0 11
  • 25. Unum Group Financial Results for Corporate Segment Three Months Ended Year Ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 12/31/2005 Operating Revenue Net Investment Income $ 19.2 $ 8.3 $ 44.1 $ 47.4 $ 49.4 Other Income 0.5 5.8 2.2 15.7 11.8 Total Operating Revenue 19.7 14.1 46.3 63.1 61.2 Benefits and Expenses Interest and Debt Expense - Non-recourse Debt 10.0 1.3 15.7 1.3 - Interest and Debt Expense - All Other Debt 38.8 44.5 167.4 190.5 208.0 Cost Related to Early Retirement of Debt 55.6 2.7 58.8 25.8 - Unallocated Expenses 4.2 4.0 27.6 30.2 6.0 Total Benefits and Expenses 108.6 52.5 269.5 247.8 214.0 Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses $ (88.9) $ (38.4) $ (223.2) $ (184.7) $ (152.8) Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Reported $ (88.9) $ (38.4) $ (223.2) $ (184.7) $ (152.8) Broker Compensation Settlement - - - (18.5) - Interest on Federal Income Tax Refund - 2.6 - 2.6 - Cost Related to Early Retirement of Debt (55.6) (2.7) (58.8) (25.8) - Operating Loss Before Income Taxes and Net Realized Investment Gains and Losses, as Adjusted $ (33.3) $ (38.3) $ (164.4) $ (143.0) $ (152.8) See quot;Notes to Statistical Supplementquot; on page 16 for additional information. 12
  • 26. Unum Group Reserves December 31, 2007 Gross Total Policy Claim Reserves Reinsurance Total Reserves % Incurred IBNR % Total Ceded Net Group Disability $ - - % $ 7,770.4 $ 596.9 33.8 % $ 8,367.3 $ 92.9 $ 8,274.4 Group Life and Accidental Death & Dismemberment 73.9 0.6 772.4 178.5 3.8 1,024.8 3.4 1,021.4 Individual Disability - Recently Issued 458.4 3.8 822.4 72.5 3.6 1,353.3 79.4 1,273.9 Long-term Care 2,478.2 20.4 244.3 32.6 1.1 2,755.1 52.6 2,702.5 Voluntary Benefits 853.1 7.0 19.1 35.0 0.2 907.2 14.6 892.6 Unum US Segment 3,863.6 31.8 9,628.6 915.5 42.5 14,407.7 242.9 14,164.8 Unum UK Segment 30.7 0.2 2,420.4 268.8 10.8 2,719.9 149.3 2,570.6 Colonial Segment 1,091.7 9.0 239.9 104.1 1.4 1,435.7 33.4 1,402.3 Individual Disability - Closed Block Segment 1,657.2 13.6 10,013.8 391.7 42.0 12,062.7 1,225.0 10,837.7 Other Segment 5,515.2 45.4 518.3 288.9 3.3 6,322.4 4,770.8 1,551.6 Subtotal, Excluding Unrealized Adjustment $ 12,158.4 100.0 % $ 22,821.0 $ 1,969.0 100.0 % $ 36,948.4 $ 6,421.4 30,527.0 Unrealized Adjustment to Reserves for Unrealized Investment Gains 859.3 Consolidated $ 31,386.3 The decrease in the Unum US segment and Individual Disability - Closed Block segment IBNR from December 31, 2006 is due to the release of reserves to cover costs for the multistate market conduct examination settlement agreements and the California settlement agreement and related matters and a slight decline in insured lives in the group disability, group life, and accidental death and dismemberment lines of business. Offsetting the release for Unum US group disability is the second quarter of 2007 claim reassessment revision to increase reserves $76.5 million. The increase in Unum US Policy and Claim Reserves Incurred from December 31, 2006 is due to growth in the disabled life reserves in the Unum US group disability line of business and growth in the active life reserves for the Unum US long-term care and individual disability - recently issued lines of business. 13
  • 27. Unum Group Reserves December 31, 2006 Gross Total Policy Claim Reserves Reinsurance Total Reserves % Incurred IBNR % Total Ceded Net Group Disability $ - - % $ 7,563.0 $ 790.3 34.3 % $ 8,353.3 $ 101.5 $ 8,251.8 Group Life and Accidental Death & Dismemberment 63.1 0.5 736.5 202.2 3.9 1,001.8 2.7 999.1 Individual Disability - Recently Issued 431.8 3.4 718.9 71.5 3.3 1,222.2 76.7 1,145.5 Long-term Care 2,067.2 16.4 195.0 31.6 0.9 2,293.8 57.1 2,236.7 Voluntary Benefits 787.9 6.2 22.3 36.3 0.2 846.5 13.3 833.2 Unum US Segment 3,350.0 26.5 9,235.7 1,131.9 42.6 13,717.6 251.3 13,466.3 Unum UK Segment 28.9 0.2 2,252.8 286.4 10.4 2,568.1 142.4 2,425.7 Colonial Segment 1,021.3 8.1 234.5 100.8 1.4 1,356.6 36.7 1,319.9 Individual Disability - Closed Block Segment 1,777.8 14.1 9,794.9 443.9 42.1 12,016.6 1,498.7 10,517.9 Other Segment 6,444.3 51.1 561.4 282.1 3.5 7,287.8 5,686.4 1,601.4 Subtotal, Excluding Unrealized Adjustment $ 12,622.3 100.0 % $ 22,079.3 $ 2,245.1 100.0 % $ 36,946.7 $ 7,615.5 29,331.2 Unrealized Adjustment to Reserves for Unrealized Investment Gains 963.1 Consolidated $ 30,294.3 13.1
  • 28. Unum Group Investment Fact Sheet at December 31, 2007 Bonds (Fair Value) 12/31/2007 Selected Statistics 12/31/07 9/30/07 Public (1) $ 21,954.9 62.2 % Portfolio Yield (3) 6.66 % 6.70 % Asset-backed Securities 243.4 0.7 Average Duration 8.07 8.36 Residential Mortgage-backed Securities 3,989.4 11.3 Average Credit Quality A A Commercial Mortgage-backed Securities 4.7 - Private Placements 3,918.4 11.1 High Yield 2,007.2 5.7 Government Securities 3,266.5 9.2 Municipal Securities 45.4 0.1 Derivatives Hedging Available-for-Sale (2) (91.2) (0.3) Total $ 35,338.7 100.0 % Quality Ratings of Bonds Book Value Fair Value Schedule BA and Non-Current Aaa 22.8 % 23.2 % Total Non-Current Investments $ 2.6 $ 16.2 Aa 8.6 8.5 Total Schedule BA Assets $ 102.9 $ 107.2 A 25.5 25.3 Baa 37.0 37.3 Below Baa 6.1 5.7 Total 100.0 % 100.0 % (1) Includes $33.8 million of collateralized debt obligations. (2) Excludes DIG Issue B36 embedded derivatives, which at December 31, 2007 had a fair value of $(68.8) million. (3) Bond equivalent yield is a book value and duration weighted average of the yield on the fixed income securities in the portfolio. 14
  • 29. Unum Group Investment Fact Sheet at December 31, 2007 Fixed Maturity Bonds - By Industry Classification - Unrealized Gain/Loss Fair Value Fair Value of of Bonds Bonds with Net with Gross Gross Gross Gross Fair Value Unrealized Unrealized Unrealized Unrealized Unrealized Classification (1) Gain (Loss) Loss Loss Gain Gain Basic Industry $ 2,281.4 $ 47.5 $ 913.8 $ 50.6 $ 1,367.6 $ 98.1 Canadian 290.0 60.2 - - 290.0 60.2 Capital Goods 2,674.6 105.3 968.3 54.0 1,706.3 159.3 Communications 2,395.9 111.6 841.2 53.6 1,554.7 165.2 Consumer Cyclical 1,348.6 (3.9) 699.6 58.3 649.0 54.4 Consumer Non-Cyclical 4,193.8 91.5 1,723.0 82.7 2,470.8 174.2 Derivatives Hedging Available- for-Sale (91.1) (92.2) (232.6) 232.6 141.5 140.4 Energy (Oil & Gas) 2,455.5 204.2 449.4 16.8 2,006.1 221.0 Financial Institutions 3,536.1 (92.2) 2,563.0 149.1 973.1 56.9 Mortgage/Asset-Backed 4,237.5 230.7 488.8 6.9 3,748.7 237.6 Sovereigns 1,070.4 50.5 558.9 7.5 511.5 58.0 Technology 571.5 8.1 279.9 15.2 291.6 23.3 Transportation 981.1 57.1 322.2 13.0 658.9 70.1 U.S. Government Agencies and Municipalities 2,462.5 149.8 840.9 28.7 1,621.6 178.5 Utilities 6,930.9 179.7 3,169.2 144.3 3,761.7 324.0 Total $ 35,338.7 $ 1,107.9 $ 13,585.6 $ 913.3 $ 21,753.1 $ 2,021.2 Gross Unrealized Loss on Fixed Maturity Bonds By Length of Time in Unrealized Loss Position Investment-Grade Below-Investment-Grade Gross Gross Unrealized Unrealized Category Fair Value Loss Fair Value Loss Less than 91 days $ 657.8 $ 8.7 $ 186.5 $ 5.6 91 through 180 days 500.2 14.4 169.5 11.4 181 through 270 days 1,701.3 48.7 371.7 19.9 271 days to 1 year 925.9 35.4 63.3 11.3 Greater than 1 year 8,527.5 674.3 481.9 83.6 Total $ 12,312.7 $ 781.5 $ 1,272.9 $ 131.8 (1) Excludes DIG Issue B36 embedded derivatives, which at December 31, 2007 had a fair value of $(68.8) million. 14.1
  • 30. Unum Group Investment Fact Sheet at December 31, 2007 Asset and Mortgage-Backed Securities Portfolio at December 31, 2007 % of Total Bond Fair Average Book Value Fair Value Value Rating Asset-Backed Securities Credit Cards $ 239.4 $ 237.7 5.6 % 0.7 % AAA Rate Reduction Bonds 4.8 4.7 0.1 - AAA Home Equity 1.5 1.0 - - A3 Collateralized Debt Obligations - - - - - Total 245.7 243.4 5.7 0.7 AAA Residential Mortgage-Backed Securities Agency CMOs 3,726.2 3,961.7 93.5 11.2 AAA Whole Loans 24.9 21.9 0.5 0.1 AAA Alt-A 5.5 5.8 0.2 - AAA Subprime - - - - - Collateralized Debt Obligations - - - - - Total 3,756.6 3,989.4 94.2 11.3 AAA Commercial Mortgage-Backed Securities 4.5 4.7 0.1 - AA1 Total $ 4,006.8 $ 4,237.5 100.0 % 12.0 % AAA 14.2
  • 31. Unum Group Statutory Capital and Surplus As of As of December 31, 2007 December 31, 2006 Capital and Capital and Capital and Surplus AVR Surplus + AVR Surplus + AVR Traditional U.S. Life Insurance Companies Provident Life and Accident $ 435.1 $ 68.1 $ 503.2 $ 1,189.8 Unum Life of America 1,490.5 131.8 1,622.3 1,682.4 Paul Revere Life (1) 458.7 37.9 496.6 1,070.5 Colonial Life & Accident 369.3 19.6 388.9 382.8 Provident Life and Casualty 99.0 2.9 101.9 102.2 First Unum Life 184.0 9.8 193.8 188.8 Paul Revere Variable (1) 114.0 1.1 115.1 110.4 (1) Capital and Surplus of Paul Revere Variable is included in Paul Revere Life Special Purpose Reinsurance Vehicles Tailwind Reinsurance Company $ 125.0 $ 0.2 $ 125.2 $ 136.3 Northwind Reinsurance Company 1,253.7 0.8 1,254.5 - UnumProvident International Ltd. 369.5 - 369.5 125.1 15