Form 8-K Unum Group For: Oct 26
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2016 | ||||
UNUM GROUP | ||||
(Exact name of registrant as specified in its charter) | ||||
Delaware | 001-11294 | 62-1598430 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1 Fountain Square
Chattanooga, Tennessee 37402
(Address of principal executive offices) (Zip Code)
(423) 294-1011
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On October 26, 2016, Unum Group issued a news release reporting its results for the third quarter of 2016, a copy of which is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Also on October 26, 2016, Unum Group posted on its website at www.unum.com the Statistical Supplement relating to its financial results for the third quarter of 2016. A copy of the Statistical Supplement is furnished herewith as Exhibit 99.2 and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this report, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any of Unum Group's filings under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits. | The following exhibits are furnished (but not filed) with this report: |
99.1 | News release of Unum Group dated October 26, 2016, concerning earnings for the third quarter of 2016. |
99.2 | Statistical Supplement of Unum Group for the third quarter of 2016. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Unum Group | |||
(Registrant) | |||
October 26, 2016 | By: | /s/ J. Paul Jullienne | |
Name: | J. Paul Jullienne | ||
Title: | Vice President, Managing Counsel, and | ||
Corporate Secretary | |||
INDEX TO EXHIBITS
Exhibit No. | Description |
99.1 | News release of Unum Group dated October 26, 2016, concerning earnings for the third quarter of 2016. |
99.2 | Statistical Supplement of Unum Group for the third quarter of 2016. |
Exhibit 99.1 | ||
1 Fountain Square | ||
Chattanooga, TN 37402 | ||
www.unum.com |
FOR IMMEDIATE RELEASE | |||
news | Contacts | ||
INVESTORS | Tom White | 423 294 8996 | |
Matt Barnett | 423 294 7498 | ||
MEDIA | Jim Sabourin | 423 294 6300 | |
Unum Group Reports Third Quarter 2016 Results
CHATTANOOGA, Tenn. (October 26, 2016) - Unum Group (NYSE: UNM) today reported net income of $236.0 million ($1.01 per diluted common share) for the third quarter of 2016, compared to net income of $203.8 million ($0.83 per diluted common share) for the third quarter of 2015.
After-tax operating income, which excludes after-tax realized investment gains and losses on the Company’s investment portfolio and the amortization of prior period actuarial losses on the Company’s pension plans, was $231.3 million ($0.99 per diluted common share) in the third quarter of 2016, compared to $223.0 million ($0.91 per diluted common share) in the third quarter of 2015. The combined impact of the amounts excluded for the third quarters of 2016 and 2015 equaled net after-tax income of $4.7 million ($0.02 per diluted common share) and net after-tax losses of $19.2 million ($0.08 per diluted common share), respectively.
“Our third quarter results were very strong, driven in large part by solid premium growth in our core business operations,” said Richard P. McKenney, president and chief executive officer. “We continued to grow the top line and deliver value to our customers, as evidenced by our steady customer retention trends, while further cementing our position as a leader in the employee benefits marketplace. We also continued to generate excess capital, allowing us to invest in our business, such as our acquisition in the dental and vision market, while also directly returning value to shareholders.”
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. |
RESULTS BY SEGMENT
We measure and analyze our segment performance on the basis of "operating income" or "operating loss", which differ from income before income tax as presented in our consolidated statements of income due to the exclusion of net realized investment gains and losses and non-operating retirement-related gains or losses. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for income before income tax or net income.
Unum US Segment
Unum US reported operating income of $231.0 million in the third quarter of 2016, an increase of 5.6 percent from $218.7 million in the third quarter of 2015. Premium income for the segment increased 5.9 percent to $1,315.0 million in the third quarter of 2016, compared to premium income of $1,241.8 million in the third quarter of 2015. Net investment income for the segment was $207.3 million in the third quarter of 2016, compared to $214.3 million in the third quarter of 2015.
Within the Unum US operating segment, the group disability line of business reported a 20.6 percent increase in operating income to $85.4 million in the third quarter of 2016, compared to $70.8 million in the third quarter of 2015. Premium income in group disability increased 2.8 percent to $583.6 million in the third quarter of 2016, compared to $567.5 million in the third quarter of 2015, primarily due to an increase in the in-force block due to prior period sales, partially offset by lower persistency. Net investment income declined by 1.3 percent to $120.1 million in the third quarter of 2016, compared to $121.7 million in the third quarter of 2015, primarily due to a decline in yields. The benefit ratio for the third quarter of 2016 was 78.6 percent, compared to 80.5 percent in the third quarter of 2015, due primarily to lower claim incidence rates and favorable claim recovery experience in our group long-term disability product line and shorter claim duration periods and lower prevalence rates in our group short-term disability product line. Group long-term disability sales declined to $24.3 million in the third quarter of 2016, compared to $34.3 million in the third quarter of 2015. Group short-term disability sales declined to $11.7 million in the third quarter of 2016, compared to $15.2 million in the third quarter of 2015. Persistency in the group long-term disability line of business was 90.5 percent for the first nine months of 2016, compared to 92.1 percent for the first nine months of 2015. Persistency in the group short-term disability line of business was 87.4 percent for the first nine months of 2016, compared to 87.9 percent for the first nine months of 2015.
The group life and accidental death and dismemberment line of business reported operating income of $53.4 million in the third quarter of 2016, a decline of 11.3 percent from $60.2 million in the third quarter of 2015. Premium income for this line of business increased 5.5 percent to $388.7 million in the third quarter of 2016, compared to $368.6 million in the third quarter of 2015, primarily due to growth in the in-force block resulting from prior period sales and improved persistency. Net investment income declined 19.0 percent to $28.1 million in the third quarter of 2016, compared to $34.7 million in the third quarter of 2015, primarily due to a decline in the level of invested assets supporting this line of business. The benefit ratio in the third quarter of 2016 was 72.6 percent, compared to 71.0 percent in the third quarter of 2015, reflecting a higher average
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 2 |
claim size in the group life line, partially offset by favorable experience under group life waiver of premium benefits. Sales of group life and accidental death and dismemberment products declined 8.8 percent in the third quarter of 2016 to $31.1 million, compared to $34.1 million in the third quarter of 2015. Persistency in the group life line of business was 90.3 percent for the first nine months of 2016, compared to 88.5 percent for the first nine months of 2015.
The supplemental and voluntary line of business reported an increase of 5.1 percent in operating income to $92.2 million in the third quarter of 2016, compared to $87.7 million in the third quarter of 2015. Premium income for supplemental and voluntary increased 12.1 percent to $342.7 million in the third quarter of 2016, compared to $305.7 million in the third quarter of 2015, driven by the addition of a U.S. dental and vision product offering resulting from an acquisition in August 2016 (see “Acquisition of Business” as follows), as well as growth in the in-force block of individual disability and voluntary benefits products due to prior period sales and favorable persistency. Net investment income increased to $59.1 million in the third quarter of 2016, compared to $57.9 million in the third quarter of 2015, due to an increase in the level of invested assets, partially offset by a decline in yields. The benefit ratio for the individual disability product line was 52.6 percent for the third quarter of 2016, compared to 52.3 percent for the third quarter of 2015. The benefit ratio for voluntary benefits was 46.5 percent in the third quarter of 2016, compared to 45.8 percent in the third quarter of 2015, primarily driven by less favorable experience in the life product line. The benefit ratio for dental and vision was 68.0 percent. Relative to the third quarter of 2015, sales in the individual disability product line declined 22.6 percent in the third quarter of 2016 to $16.4 million. Sales in the voluntary benefits line of business declined 1.3 percent in the third quarter of 2016 to $45.6 million. Sales in the dental and vision product line totaled $4.5 million. Persistency in the individual disability product line was 91.2 percent for the first nine months of 2016, compared to 90.2 percent for the first nine months of 2015. Persistency in the voluntary benefits product line was 76.8 percent for the first nine months of 2016, compared to 75.3 percent for the first nine months of 2015.
Unum UK Segment
Unum UK reported operating income of $28.2 million in the third quarter of 2016, a decline of 13.8 percent from $32.7 million in the third quarter of 2015. In local currency, operating income increased by 1.9 percent to £21.5 million in the third quarter of 2016, compared to £21.1 million in the third quarter of 2015.
Premium income declined by 12.0 percent to $127.3 million in the third quarter of 2016, compared to $144.6 million in the third quarter of 2015. In local currency, premium income was £96.9 million in the third quarter of 2016, an increase of 3.9 percent from £93.3 million in the third quarter of 2015, primarily resulting from the addition of the U.K. dental product line in September 2015. Net investment income increased 1.8 percent to $28.5 million in the third quarter of 2016, compared to $28.0 million in the third quarter of 2015. In local currency, net investment income increased 19.9 percent to £21.7 million in the third quarter of 2016, compared to £18.1 million in the third quarter of 2015, primarily due to an increase in investment income from inflation index-linked bonds which support the claim reserves associated with certain group policies that provide
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 3 |
for inflation-linked increases in benefits. The benefit ratio in the third quarter of 2016 was 71.8 percent, compared to 67.8 percent in the third quarter of 2015, due primarily to a higher average claim size and an increase in the claim incidence rate in group life, and a higher average claim size in group long-term disability. The addition of the dental product offering also contributed to the increase in our benefit ratio as this product line typically has a higher benefit ratio than other product lines reported in our supplemental product line.
Sales declined by 1.5 percent to $19.4 million in the third quarter of 2016, compared to $19.7 million in the third quarter of 2015. In local currency, sales for the third quarter of 2016 increased by 15.6 percent to £14.8 million. Persistency in the group long-term disability line of business was 88.7 percent for the first nine months of 2016 compared to 88.5 percent for the first nine months of 2015. Persistency in the group life line of business was 80.1 percent for the first nine months of 2016, compared to 80.6 percent for the first nine months of 2015.
Colonial Life Segment
Colonial Life reported a 3.5 percent increase in operating income to $79.0 million in the third quarter of 2016, compared to $76.3 million in the third quarter of 2015.
Premium income for the third quarter of 2016 increased 6.3 percent to $354.1 million, compared to $333.1 million in the third quarter of 2015, primarily due to sales growth and stable persistency. Net investment income increased by 0.6 percent to $36.1 million in the third quarter of 2016, compared to $35.9 million in the third quarter of 2015. The benefit ratio in the third quarter of 2016 was 51.6 percent, compared to 51.2 percent in the third quarter of 2015, primarily reflecting less favorable mortality experience in the life product line, which was partially offset by favorable claims experience in the accident, sickness, and disability product line and the cancer and critical illness product line.
Sales increased 9.3 percent to $104.2 million in the third quarter of 2016 from $95.3 million in the third quarter of 2015, with favorable sales trends in both the core commercial and public sector market segments. Persistency in Colonial Life was 79.0 percent for the first nine months of 2016 compared to 78.6 percent for the first nine months of 2015.
Closed Block Segment
The Closed Block segment reported operating income of $28.6 million in the third quarter of 2016, compared to operating income of $27.7 million in the third quarter of 2015.
Premium income for this segment declined 2.8 percent in the third quarter of 2016 compared to the third quarter of 2015, due to expected policy terminations and maturities in the individual disability line of business which was partially offset by an increase in premium income for the long-term care line of business resulting from premium rate increases on certain in-force policies less the impact of policy terminations. Net investment income increased 2.0 percent to $334.1 million in the third quarter of 2016, compared to $327.5 million in the third quarter of 2015, due to an increase in the level of invested assets and higher miscellaneous investment income. The interest adjusted loss ratio for the individual disability line of business increased to 81.5 percent in
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 4 |
the third quarter of 2016, compared to 80.8 percent in the third quarter of 2015, due primarily to unfavorable mortality experience, lower claim recoveries, and a reduction in the claim reserve discount rate to recognize the impact on future portfolio yields from the higher than normal level of bond tenders and calls experienced during 2016. The interest adjusted loss ratio for the long-term care line of business was 93.8 percent in the third quarter of 2016 compared to 89.9 percent in the third quarter of 2015, due to a higher average size of new claims and less favorable mortality experience, as well as the unfavorable impact of a large group case moving to an individual policy ported status during 2016.
Corporate Segment
The Corporate segment reported an operating loss of $41.6 million for the third quarter of 2016, compared to an operating loss of $26.9 million in the third quarter of 2015. The higher operating loss in the third quarter of 2016 was due primarily to lower net investment income, higher interest and debt expense, and higher expenses primarily related to the third quarter of 2016 business acquisition (see “Acquisition of Business” as follows).
OTHER INFORMATION
Acquisition of Business
On August 1, 2016, the Company acquired H&J Capital, L.L.C., parent of Starmount Life Insurance Company and AlwaysCare Benefits, for an initial cash purchase price of $140.1 million plus contingent cash consideration of $10.0 million to be paid upon satisfaction of certain conditions. Starmount Life Insurance Company is an independent provider of dental and vision insurance in the U.S. workplace, and AlwaysCare Benefits is a nationally licensed, third-party administrator. This acquisition, the results of which are included in our consolidated financial statements for the period subsequent to the date of acquisition, did not have a material impact on revenue or results of operations during the third quarter of 2016. The existing dental and vision products as well as new dental and vision products to be marketed by Unum US are reported in the Unum US segment within the supplemental and voluntary product lines. Colonial Life dental and vision products are expected to be introduced in 2018.
Shares Outstanding
The Company’s weighted average number of shares outstanding, assuming dilution was 234.2 million for the third quarter of 2016, compared to 246.3 million for the third quarter of 2015. Shares outstanding totaled 232.1 million at September 30, 2016. During the third quarter of 2016, the Company repurchased approximately 2.9 million shares at a cost of approximately $100 million.
Capital Management
At September 30, 2016, the weighted average risk-based capital ratio for the Company’s traditional U.S. insurance companies was approximately 395 percent, and cash and marketable securities in the holding companies equaled approximately $598 million, excluding amounts committed for subsidiary contributions.
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 5 |
Book Value
Book value per common share as of September 30, 2016 was $40.33, compared to $35.25 at September 30, 2015.
Outlook
The Company’s expectation for after-tax operating income growth per share for full-year 2016 is at to slightly above the higher end of the range of three percent to six percent.
NON-GAAP FINANCIAL MEASURES
We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measure of "after-tax operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of net realized investment gains and losses and non-operating retirement-related gains or losses as specified in the reconciliations below. We believe operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.
Realized investment gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of realized investment gains or losses. Although we may experience realized investment gains or losses which will affect future earnings levels, a long-term focus is necessary to maintain profitability over the life of the business since our underlying business is long-term in nature, and we need to earn the interest rates assumed in calculating our liabilities.
The amortization of prior period actuarial gains or losses, a component of the net periodic benefit cost for our pensions and other postretirement benefit plans, is driven by market performance as well as plan amendments and is not indicative of the operational results of our businesses. We believe that excluding the amortization of prior period gains or losses from operating income or loss provides investors with additional information for comparison and analysis of our operating results. Although we manage our non-operating retirement-related gains or losses separately from the operational performance of our business, these gains or losses impact the overall profitability of our company and have historically increased or decreased over time, depending on plan amendments and market conditions and the resulting impact on the actuarial gains or losses in our pensions and other postretirement benefit plans.
We may at other times exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace net income or net loss as a measure of our overall profitability.
Information reconciling the Company’s outlook on after-tax operating income growth per share to the comparable GAAP financial measure is not provided. The only amounts excluded from after-tax operating income are those described in the preceding paragraphs. While the amortization of prior period actuarial gains or losses in our net
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 6 |
periodic benefit cost for our pensions and other postretirement benefit plans is generally consistent in a given annual period and can reasonably be predicted, the Company is unable to predict with reasonable certainty realized investment gains and losses, which are affected by overall market conditions and also by factors such as an economic or political change in the country of the issuer, a regulatory change pertaining to the issuer’s industry, a significant improvement or deterioration in the cash flows of the issuer, unforeseen accounting irregularities or fraud committed by an issuer, movement in credit spreads, ratings upgrades or downgrades, a change in the issuer’s marketplace or business prospects, or any other event that significantly affects the issuers of the fixed maturity securities which the Company holds in its investment portfolio.
CONFERENCE CALL INFORMATION
Members of Unum Group senior management will host a conference call on Thursday, Oct. 27, at 9 a.m. (Eastern Time) to discuss the results of operations for the third quarter. Topics may include forward-looking information, such as the Company’s outlook on future results, trends in operations, and other material information.
The dial-in number for the conference call is (800) 753-9057 for U.S. and Canada (pass code 1162703). For international, the dial-in number is (913) 312-0860 (pass code 1162703). A live webcast of the call will also be available at www.investors.unum.com in a listen-only mode. It is recommended that webcast viewers access the “Investors” section of the Company’s website and opt-in to the webcast approximately 5-10 minutes prior to the start of the call. The Company will maintain a replay of the call on its website through Thursday, Nov. 3. A replay of the call will also be available by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International) pass code 1162703.
In conjunction with today’s earnings announcement, the Company’s Statistical Supplement for the third quarter of 2016 is available on the “Investors” section of the Company’s website.
# # #
ABOUT UNUM GROUP
Unum (www.unum.com) is one of the leading providers of employee benefits products and services and the largest provider of disability insurance products in the United States and the United Kingdom.
SAFE HARBOR STATEMENT
Certain information in this press release constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments and speak only as of the date made. These forward-looking statements, including statements about anticipated growth in after-tax operating income per share, are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. The following factors, in addition to other factors mentioned from time to time, may cause actual results to differ materially from those contemplated by the forward-looking statements: (1) sustained periods of low interest rates; (2) fluctuation in insurance reserve liabilities and claim payments due to changes in claim incidence, recovery rates, mortality and morbidity rates, and policy benefit offsets due to, among other factors, the rate of unemployment and consumer confidence, the emergence of new diseases, epidemics, or pandemics, new trends and developments in medical treatments, the effectiveness of our claims operational processes, and
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 7 |
changes in government programs; (3) unfavorable economic or business conditions, both domestic and foreign; (4) legislative, regulatory, or tax changes, both domestic and foreign, including the effect of potential legislation and increased regulation in the current political environment; (5) investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our liabilities; (6) a cyber attack or other security breach could result in the unauthorized acquisition of confidential data; (7) the failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cyber attack, or other event; (8) increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors; (9) execution risk related to our technology needs; (10) changes in our financial strength and credit ratings; (11) damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, external events, and/or inadequate or failed internal controls and procedures; (12) actual experience that deviates from our assumptions used in pricing, underwriting, and reserving; (13) actual persistency and/or sales growth that is higher or lower than projected; (14) changes in demand for our products due to, among other factors, changes in societal attitudes, the rate of unemployment, consumer confidence, and/or legislative and regulatory changes, including healthcare reform; (15) effectiveness of our risk management program; (16) contingencies and the level and results of litigation; (17) availability of reinsurance in the market and the ability of our reinsurers to meet their obligations to us; (18) ineffectiveness of our derivatives hedging programs due to changes in the economic environment, counterparty risk, ratings downgrades, capital market volatility, changes in interest rates, and/or regulation; (19) changes in accounting standards, practices, or policies; (20) fluctuation in foreign currency exchange rates; (21) ability to generate sufficient internal liquidity and/or obtain external financing; (22) recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets; and (23) terrorism, both within the U.S. and abroad, ongoing military actions, and heightened security measures in response to these types of threats.
For further discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Part 1, Item 1A “ Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2015 and, to the extent applicable, our subsequent quarterly reports on Form 10-Q. The forward-looking statements in this press release are being made as of the date of this press release, and the Company expressly disclaims any obligation to update or revise any forward-looking statement contained herein, even if made available on our website or otherwise.
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 8 |
Unum Group
FINANCIAL HIGHLIGHTS
(Unaudited)
($ in millions, except share data) | |||||||||||||||
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | |||||||||||||||
Premium Income | $ | 2,089.4 | $ | 2,020.8 | $ | 6,258.5 | $ | 6,044.6 | |||||||
Net Investment Income | 611.4 | 612.1 | 1,841.1 | 1,844.8 | |||||||||||
Net Realized Investment Gain (Loss) | 11.0 | (26.6 | ) | (4.2 | ) | (41.1 | ) | ||||||||
Other Income | 51.5 | 51.5 | 154.6 | 160.6 | |||||||||||
Total Revenue | 2,763.3 | 2,657.8 | 8,250.0 | 8,008.9 | |||||||||||
Benefits and Expenses | |||||||||||||||
Benefits and Change in Reserves for Future Benefits | 1,742.6 | 1,690.9 | 5,205.9 | 5,047.6 | |||||||||||
Commissions | 256.8 | 246.3 | 771.7 | 747.8 | |||||||||||
Interest and Debt Expense | 45.2 | 38.1 | 126.2 | 113.9 | |||||||||||
Deferral of Acquisition Costs | (147.8 | ) | (139.4 | ) | (447.0 | ) | (425.1 | ) | |||||||
Amortization of Deferred Acquisition Costs | 118.8 | 117.0 | 377.2 | 375.4 | |||||||||||
Other Expenses | 415.6 | 406.0 | 1,239.5 | 1,227.6 | |||||||||||
Total Benefits and Expenses | 2,431.2 | 2,358.9 | 7,273.5 | 7,087.2 | |||||||||||
Income Before Income Tax | 332.1 | 298.9 | 976.5 | 921.7 | |||||||||||
Income Tax | 96.1 | 95.1 | 293.1 | 280.7 | |||||||||||
Net Income | $ | 236.0 | $ | 203.8 | $ | 683.4 | $ | 641.0 | |||||||
PER SHARE INFORMATION | |||||||||||||||
Net Income Per Common Share | |||||||||||||||
Basic | $ | 1.01 | $ | 0.83 | $ | 2.89 | $ | 2.58 | |||||||
Assuming Dilution | $ | 1.01 | $ | 0.83 | $ | 2.88 | $ | 2.57 | |||||||
Weighted Average Common Shares - Basic (000s) | 233,752.0 | 245,400.0 | 236,744.3 | 248,372.9 | |||||||||||
Weighted Average Common Shares - Assuming Dilution (000s) | 234,213.5 | 246,324.4 | 237,143.8 | 249,228.1 | |||||||||||
Outstanding Shares - (000s) | 232,095.5 | 243,422.0 |
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 9 |
Reconciliation of Non-GAAP Financial Measures
Three Months Ended September 30 | |||||||||||||||
2016 | 2015 | ||||||||||||||
per share * | per share * | ||||||||||||||
Net Income | $ | 236.0 | $ | 1.01 | $ | 203.8 | $ | 0.83 | |||||||
Excluding: | |||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $3.7; $(9.3)) | 7.3 | 0.03 | (17.3 | ) | (0.07 | ) | |||||||||
Non-operating Retirement-related Loss (net of tax benefit of $1.5; $1.1) | (2.6 | ) | (0.01 | ) | (1.9 | ) | (0.01 | ) | |||||||
After-tax Operating Income | $ | 231.3 | $ | 0.99 | $ | 223.0 | $ | 0.91 | |||||||
* Assuming Dilution |
September 30 | |||||||||||||||
2016 | 2015 | ||||||||||||||
per share | per share | ||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 9,361.2 | $ | 40.33 | $ | 8,581.1 | $ | 35.25 | |||||||
Excluding: | |||||||||||||||
Net Unrealized Gain on Securities | 803.2 | 3.47 | 158.6 | 0.65 | |||||||||||
Net Gain on Cash Flow Hedges | 335.2 | 1.44 | 405.1 | 1.66 | |||||||||||
Subtotal | 8,222.8 | 35.42 | 8,017.4 | 32.94 | |||||||||||
Excluding: | |||||||||||||||
Foreign Currency Translation Adjustment | (305.2 | ) | (1.32 | ) | (146.6 | ) | (0.60 | ) | |||||||
Subtotal | 8,528.0 | 36.74 | 8,164.0 | 33.54 | |||||||||||
Excluding: | |||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (382.5 | ) | (1.65 | ) | (395.1 | ) | (1.62 | ) | |||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 8,910.5 | $ | 38.39 | $ | 8,559.1 | $ | 35.16 |
UNUM IS A REGISTERED TRADEMARK AND MARKETING BRAND OF UNUM GROUP AND ITS INSURING SUBSIDIARIES. | 10 |
Unum Group
Statistical Supplement Third Quarter 2016
TABLE OF CONTENTS
(in millions of dollars, except share data and where noted)
Interim Results are Unaudited
Page | |||
See "Appendix to Statistical Supplement" on page 16 for a summary of significant items and a reconciliation of our non-GAAP financial measures. | |||
N.M. = not a meaningful percentage |
Unum Group Financial Highlights
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Consolidated U.S. GAAP Results¹ | |||||||||||||||||||||||
Premium Income | $ | 2,089.4 | $ | 2,020.8 | $ | 6,258.5 | $ | 6,044.6 | $ | 8,082.4 | $ | 7,797.2 | |||||||||||
Operating Revenue | $ | 2,752.3 | $ | 2,684.4 | $ | 8,254.2 | $ | 8,050.0 | $ | 10,775.1 | $ | 10,508.4 | |||||||||||
Net Realized Investment Gain (Loss) | 11.0 | (26.6 | ) | (4.2 | ) | (41.1 | ) | (43.8 | ) | 16.1 | |||||||||||||
Revenue | $ | 2,763.3 | $ | 2,657.8 | $ | 8,250.0 | $ | 8,008.9 | $ | 10,731.3 | $ | 10,524.5 | |||||||||||
Net Income | $ | 236.0 | $ | 203.8 | $ | 683.4 | $ | 641.0 | $ | 867.1 | $ | 402.1 | |||||||||||
Net Income Per Common Share: | |||||||||||||||||||||||
Basic | $ | 1.01 | $ | 0.83 | $ | 2.89 | $ | 2.58 | $ | 3.51 | $ | 1.57 | |||||||||||
Assuming Dilution | $ | 1.01 | $ | 0.83 | $ | 2.88 | $ | 2.57 | $ | 3.50 | $ | 1.57 | |||||||||||
Assets | $ | 63,905.1 | $ | 61,478.8 | $ | 60,563.6 | $ | 62,422.5 | |||||||||||||||
Stockholders' Equity | $ | 9,361.2 | $ | 8,581.1 | $ | 8,663.9 | $ | 8,521.9 | |||||||||||||||
Operating Return on Equity | |||||||||||||||||||||||
Unum US | 15.0 | % | 13.6 | % | 14.6 | % | 13.2 | % | 13.3 | % | 13.3 | % | |||||||||||
Unum UK | 20.7 | % | 15.8 | % | 19.5 | % | 16.4 | % | 18.0 | % | 18.3 | % | |||||||||||
Colonial Life | 17.3 | % | 16.3 | % | 17.5 | % | 16.7 | % | 16.6 | % | 16.7 | % | |||||||||||
Core Operating Segments | 16.0 | % | 14.4 | % | 15.7 | % | 14.2 | % | 14.5 | % | 14.5 | % | |||||||||||
Consolidated | 11.3 | % | 11.1 | % | 11.3 | % | 11.3 | % | 11.3 | % | 11.3 | % |
Traditional U.S. Life Insurance Companies' Statutory Results² | |||||||||||||||||||||||
Net Gain from Operations, After Tax | $ | 211.5 | $ | 187.9 | $ | 624.0 | $ | 506.8 | $ | 689.2 | $ | 623.9 | |||||||||||
Net Realized Investment Gain (Loss), After Tax | (7.7 | ) | (7.5 | ) | (21.4 | ) | (8.3 | ) | (35.5 | ) | 5.0 | ||||||||||||
Net Income | $ | 203.8 | $ | 180.4 | $ | 602.6 | $ | 498.5 | $ | 653.7 | $ | 628.9 | |||||||||||
Capital and Surplus | $ | 3,475.7 | $ | 3,448.8 | $ | 3,470.3 | $ | 3,507.2 | |||||||||||||||
Weighted Average Risk-based Capital Ratio | ~ 395% | ~ 400% | ~ 400% | ~ 400% |
1 Generally Accepted Accounting Principles
2 Our traditional U.S. life insurance companies are Provident Life and Accident Insurance Company, Unum Life Insurance Company of America , The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company, Provident Life and Casualty Insurance Company, First Unum Life Insurance Company, Unum Insurance Company and Starmount Life Insurance Company.
1
Unum Group Capital Metrics
9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 9,361.2 | $ | 40.33 | $ | 8,581.1 | $ | 35.25 | $ | 8,663.9 | $ | 35.96 | $ | 8,521.9 | $ | 33.78 | |||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Net Unrealized Gain on Securities | 803.2 | 3.47 | 158.6 | 0.65 | 204.3 | 0.84 | 290.3 | 1.15 | |||||||||||||||||||||||
Net Gain on Cash Flow Hedges | 335.2 | 1.44 | 405.1 | 1.66 | 378.0 | 1.57 | 391.0 | 1.55 | |||||||||||||||||||||||
Subtotal | 8,222.8 | 35.42 | 8,017.4 | 32.94 | 8,081.6 | 33.55 | 7,840.6 | 31.08 | |||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | (305.2 | ) | (1.32 | ) | (146.6 | ) | (0.60 | ) | (173.6 | ) | (0.72 | ) | (113.4 | ) | (0.45 | ) | |||||||||||||||
Subtotal | 8,528.0 | 36.74 | 8,164.0 | 33.54 | 8,255.2 | 34.27 | 7,954.0 | 31.53 | |||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (382.5 | ) | (1.65 | ) | (395.1 | ) | (1.62 | ) | (392.6 | ) | (1.63 | ) | (401.5 | ) | (1.59 | ) | |||||||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income | $ | 8,910.5 | $ | 38.39 | $ | 8,559.1 | $ | 35.16 | $ | 8,647.8 | $ | 35.90 | $ | 8,355.5 | $ | 33.12 | |||||||||||||||
Dividends Paid | $ | 136.2 | $ | 0.570 | $ | 129.2 | $ | 0.515 | $ | 174.2 | $ | 0.700 | $ | 159.4 | $ | 0.620 |
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Shares Repurchased (millions) | 2.9 | 3.2 | 9.4 | 9.4 | 12.3 | 8.7 | |||||||||||||||||
Cost of Shares Repurchased (millions)(1) | $ | 100.2 | $ | 115.0 | $ | 300.3 | $ | 326.2 | $ | 426.7 | $ | 300.6 | |||||||||||
Price (UNM closing price on last trading day of period) | $ | 35.31 | $ | 32.08 | $ | 33.29 | $ | 34.88 | |||||||||||||||
Leverage Ratio | 27.2 | % | 24.8 | % | 25.5 | % | 25.2 | % | |||||||||||||||
Holding Company Cash and Marketable Securities | $ | 598 | $ | 484 | $ | 475 | $ | 575 |
(1) Includes commissions of $0.1 million and $0.2 million for the three and nine month period ended September 30, 2016, respectively, $0.1 million for the nine month period ended September 30, 2015, a de minimis amount for the three month period ended September 30, 2015, and $0.3 million and $0.1 million for the years ended December 31, 2015 and 2014, respectively.
2
Unum Group Ratings
AM Best | Fitch | Moody's | S&P | ||||
Outlook | Stable | Stable | Stable | Stable | |||
Issuer Credit Ratings | bbb | BBB | Baa2 | BBB | |||
Financial Strength Ratings | |||||||
Provident Life and Accident | A | A | A2 | A | |||
Unum Life of America | A | A | A2 | A | |||
Colonial Life & Accident | A | A | A2 | A | |||
Paul Revere Life | A | A | A2 | A | |||
Starmount Life Insurance Company | A- | NR | NR | NR | |||
Unum Limited | NR | NR | NR | A- |
NR = not rated
3
Unum Group Consolidated Statements of Income
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Revenue | |||||||||||||||||||||||
Premium Income | $ | 2,089.4 | $ | 2,020.8 | $ | 6,258.5 | $ | 6,044.6 | $ | 8,082.4 | $ | 7,797.2 | |||||||||||
Net Investment Income | 611.4 | 612.1 | 1,841.1 | 1,844.8 | 2,481.2 | 2,492.2 | |||||||||||||||||
Net Realized Investment Gain (Loss) | 11.0 | (26.6 | ) | (4.2 | ) | (41.1 | ) | (43.8 | ) | 16.1 | |||||||||||||
Other Income | 51.5 | 51.5 | 154.6 | 160.6 | 211.5 | 219.0 | |||||||||||||||||
Total Revenue | 2,763.3 | 2,657.8 | 8,250.0 | 8,008.9 | 10,731.3 | 10,524.5 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 1,742.6 | 1,690.9 | 5,205.9 | 5,047.6 | 6,782.8 | 7,310.8 | |||||||||||||||||
Commissions | 256.8 | 246.3 | 771.7 | 747.8 | 996.3 | 935.3 | |||||||||||||||||
Interest and Debt Expense - Non-recourse Debt | 1.7 | 1.6 | 5.1 | 5.0 | 6.6 | 7.3 | |||||||||||||||||
Interest and Debt Expense - All Other Debt | 43.5 | 36.5 | 121.1 | 108.9 | 146.2 | 160.2 | |||||||||||||||||
Deferral of Acquisition Costs | (147.8 | ) | (139.4 | ) | (447.0 | ) | (425.1 | ) | (569.7 | ) | (524.0 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 118.8 | 117.0 | 377.2 | 375.4 | 482.3 | 440.8 | |||||||||||||||||
Other Expenses | 415.6 | 406.0 | 1,239.5 | 1,227.6 | 1,648.5 | 1,652.1 | |||||||||||||||||
Total Benefits and Expenses | 2,431.2 | 2,358.9 | 7,273.5 | 7,087.2 | 9,493.0 | 9,982.5 | |||||||||||||||||
Income Before Income Tax | 332.1 | 298.9 | 976.5 | 921.7 | 1,238.3 | 542.0 | |||||||||||||||||
Income Tax Expense | 96.1 | 95.1 | 293.1 | 280.7 | 371.2 | 139.9 | |||||||||||||||||
Net Income | $ | 236.0 | $ | 203.8 | $ | 683.4 | $ | 641.0 | $ | 867.1 | $ | 402.1 | |||||||||||
Average Weighted Shares Outstanding | |||||||||||||||||||||||
Basic | 233.8 | 245.4 | 236.7 | 248.4 | 247.0 | 255.5 | |||||||||||||||||
Assuming Dilution | 234.2 | 246.3 | 237.1 | 249.2 | 247.9 | 256.7 | |||||||||||||||||
Actual Number of Shares Outstanding | 232.1 | 243.4 | 240.9 | 252.3 |
4
Unum Group Sales Data for Unum US Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
9/30/2016 | 9/30/2015 | % Change | 9/30/2016 | 9/30/2015 | % Change | 12/31/2015 | 12/31/2014 | ||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Disability and Group Life and AD&D | |||||||||||||||||||||||||||||
Group Long-term Disability | $ | 24.3 | $ | 34.3 | (29.2 | )% | $ | 110.1 | $ | 123.5 | (10.9 | )% | $ | 239.7 | $ | 223.6 | |||||||||||||
Group Short-term Disability | 11.7 | 15.2 | (23.0 | ) | 52.8 | 71.6 | (26.3 | ) | 119.7 | 118.8 | |||||||||||||||||||
Group Life and AD&D | 31.1 | 34.1 | (8.8 | ) | 127.2 | 125.7 | 1.2 | 250.1 | 264.8 | ||||||||||||||||||||
Subtotal | 67.1 | 83.6 | (19.7 | ) | 290.1 | 320.8 | (9.6 | ) | 609.5 | 607.2 | |||||||||||||||||||
Supplemental and Voluntary | |||||||||||||||||||||||||||||
Individual Disability | 16.4 | 21.2 | (22.6 | ) | 47.7 | 46.5 | 2.6 | 67.5 | 56.8 | ||||||||||||||||||||
Voluntary Benefits | 45.6 | 46.2 | (1.3 | ) | 216.3 | 217.4 | (0.5 | ) | 262.6 | 238.1 | |||||||||||||||||||
Dental and Vision | 4.5 | — | — | 4.5 | — | — | — | — | |||||||||||||||||||||
Subtotal | 66.5 | 67.4 | (1.3 | ) | 268.5 | 263.9 | 1.7 | 330.1 | 294.9 | ||||||||||||||||||||
Total Sales | $ | 133.6 | $ | 151.0 | (11.5 | ) | $ | 558.6 | $ | 584.7 | (4.5 | ) | $ | 939.6 | $ | 902.1 | |||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Disability and Group Life and AD&D | |||||||||||||||||||||||||||||
Core Market (< 2,000 lives) | $ | 52.8 | $ | 61.2 | (13.7 | )% | $ | 196.4 | $ | 228.5 | (14.0 | )% | $ | 405.4 | $ | 401.7 | |||||||||||||
Large Case Market | 14.3 | 22.4 | (36.2 | ) | 93.7 | 92.3 | 1.5 | 204.1 | 205.5 | ||||||||||||||||||||
Subtotal | 67.1 | 83.6 | (19.7 | ) | 290.1 | 320.8 | (9.6 | ) | 609.5 | 607.2 | |||||||||||||||||||
Supplemental and Voluntary | 66.5 | 67.4 | (1.3 | ) | 268.5 | 263.9 | 1.7 | 330.1 | 294.9 | ||||||||||||||||||||
Total Sales | $ | 133.6 | $ | 151.0 | (11.5 | ) | $ | 558.6 | $ | 584.7 | (4.5 | ) | $ | 939.6 | $ | 902.1 |
5
Unum Group Sales Data for Unum UK Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
(in millions of dollars) | 9/30/2016 | 9/30/2015 | % Change | 9/30/2016 | 9/30/2015 | % Change | 12/31/2015 | 12/31/2014 | |||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Long-term Disability | $ | 11.6 | $ | 11.8 | (1.7 | )% | $ | 36.4 | $ | 36.8 | (1.1 | )% | $ | 53.4 | $ | 57.4 | |||||||||||||
Group Life | 6.1 | 6.7 | (9.0 | ) | 16.2 | 16.9 | (4.1 | ) | 25.7 | 23.8 | |||||||||||||||||||
Supplemental | 1.7 | 1.2 | 41.7 | 8.2 | 3.2 | 156.3 | 5.0 | 3.9 | |||||||||||||||||||||
Total Sales | $ | 19.4 | $ | 19.7 | (1.5 | ) | $ | 60.8 | $ | 56.9 | 6.9 | $ | 84.1 | $ | 85.1 | ||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Long-term Disability and Group Life | |||||||||||||||||||||||||||||
Core Market (< 500 lives) | $ | 10.9 | $ | 12.9 | (15.5 | )% | $ | 30.6 | $ | 29.9 | 2.3 | % | $ | 44.3 | $ | 42.5 | |||||||||||||
Large Case Market | 6.8 | 5.6 | 21.4 | 22.0 | 23.8 | (7.6 | ) | 34.8 | 38.7 | ||||||||||||||||||||
Subtotal | 17.7 | 18.5 | (4.3 | ) | 52.6 | 53.7 | (2.0 | ) | 79.1 | 81.2 | |||||||||||||||||||
Supplemental | 1.7 | 1.2 | 41.7 | 8.2 | 3.2 | 156.3 | 5.0 | 3.9 | |||||||||||||||||||||
Total Sales | $ | 19.4 | $ | 19.7 | (1.5 | ) | $ | 60.8 | $ | 56.9 | 6.9 | $ | 84.1 | $ | 85.1 | ||||||||||||||
(in millions of pounds) | |||||||||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Long-term Disability | £ | 8.8 | £ | 7.7 | 14.3 | % | £ | 26.1 | £ | 24.1 | 8.3 | % | £ | 35.0 | £ | 35.1 | |||||||||||||
Group Life | 4.7 | 4.3 | 9.3 | 11.7 | 11.0 | 6.4 | 16.8 | 14.4 | |||||||||||||||||||||
Supplemental | 1.3 | 0.8 | 62.5 | 5.8 | 2.1 | 176.2 | 3.3 | 2.4 | |||||||||||||||||||||
Total Sales | £ | 14.8 | £ | 12.8 | 15.6 | £ | 43.6 | £ | 37.2 | 17.2 | £ | 55.1 | £ | 51.9 | |||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Long-term Disability and Group Life | |||||||||||||||||||||||||||||
Core Market (< 500 lives) | £ | 8.4 | £ | 8.3 | 1.2 | % | £ | 22.1 | £ | 19.4 | 13.9 | % | £ | 29.0 | £ | 25.8 | |||||||||||||
Large Case Market | 5.1 | 3.7 | 37.8 | 15.7 | 15.7 | — | 22.8 | 23.7 | |||||||||||||||||||||
Subtotal | 13.5 | 12.0 | 12.5 | 37.8 | 35.1 | 7.7 | 51.8 | 49.5 | |||||||||||||||||||||
Supplemental | 1.3 | 0.8 | 62.5 | 5.8 | 2.1 | 176.2 | 3.3 | 2.4 | |||||||||||||||||||||
Total Sales | £ | 14.8 | £ | 12.8 | 15.6 | £ | 43.6 | £ | 37.2 | 17.2 | £ | 55.1 | £ | 51.9 |
5. 1
Unum Group Sales Data for Colonial Life Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
9/30/2016 | 9/30/2015 | % Change | 9/30/2016 | 9/30/2015 | % Change | 12/31/2015 | 12/31/2014 | ||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Accident, Sickness, and Disability | $ | 67.0 | $ | 59.9 | 11.9 | % | $ | 195.4 | $ | 169.6 | 15.2 | % | $ | 276.1 | $ | 260.7 | |||||||||||||
Life | 20.9 | 18.6 | 12.4 | 59.6 | 53.1 | 12.2 | 85.6 | 78.8 | |||||||||||||||||||||
Cancer and Critical Illness | 16.3 | 16.8 | (3.0 | ) | 47.6 | 45.9 | 3.7 | 76.8 | 70.6 | ||||||||||||||||||||
Total Sales | $ | 104.2 | $ | 95.3 | 9.3 | $ | 302.6 | $ | 268.6 | 12.7 | $ | 438.5 | $ | 410.1 | |||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Core Market (< 1,000 lives) | $ | 67.7 | $ | 60.1 | 12.6 | % | $ | 201.0 | $ | 182.4 | 10.2 | % | $ | 290.8 | $ | 275.6 | |||||||||||||
Large Case Market | 10.6 | 11.7 | (9.4 | ) | 32.9 | 28.9 | 13.8 | 54.2 | 53.2 | ||||||||||||||||||||
Subtotal | 78.3 | 71.8 | 9.1 | 233.9 | 211.3 | 10.7 | 345.0 | 328.8 | |||||||||||||||||||||
Public Sector | 25.9 | 23.5 | 10.2 | 68.7 | 57.3 | 19.9 | 93.5 | 81.3 | |||||||||||||||||||||
Total Sales | $ | 104.2 | $ | 95.3 | 9.3 | $ | 302.6 | $ | 268.6 | 12.7 | $ | 438.5 | $ | 410.1 |
5. 2
Unum Group Consolidated Balance Sheets
September 30 | December 31 | ||||||
2016 | 2015 | ||||||
As Adjusted | |||||||
Assets | |||||||
Investments | |||||||
Fixed Maturity Securities | $ | 46,315.5 | $ | 43,354.4 | |||
Mortgage Loans | 1,970.4 | 1,883.6 | |||||
Policy Loans | 3,432.8 | 3,395.4 | |||||
Other Long-term Investments | 634.3 | 583.0 | |||||
Short-term Investments | 755.6 | 807.3 | |||||
Total Investments | 53,108.6 | 50,023.7 | |||||
Other Assets | |||||||
Cash and Bank Deposits | 87.9 | 112.9 | |||||
Accounts and Premiums Receivable | 1,625.9 | 1,598.4 | |||||
Reinsurance Recoverable | 4,845.6 | 4,725.1 | |||||
Accrued Investment Income | 694.4 | 702.8 | |||||
Deferred Acquisition Costs | 2,048.4 | 2,008.5 | |||||
Goodwill | 336.8 | 230.9 | |||||
Property and Equipment | 509.7 | 523.9 | |||||
Other Assets | 647.8 | 637.4 | |||||
Total Assets | $ | 63,905.1 | $ | 60,563.6 | |||
Liabilities | |||||||
Policy and Contract Benefits | $ | 1,483.5 | $ | 1,484.6 | |||
Reserves for Future Policy and Contract Benefits | 45,745.1 | 43,540.6 | |||||
Unearned Premiums | 427.8 | 384.2 | |||||
Other Policyholders’ Funds | 1,619.6 | 1,674.6 | |||||
Income Tax Payable | — | 6.0 | |||||
Deferred Income Tax | 358.5 | 91.8 | |||||
Short-term Debt | — | 352.0 | |||||
Long-term Debt - Non-recourse | 269.7 | 324.0 | |||||
Long-term Debt - All Other | 2,750.1 | 2,125.4 | |||||
Payables for Collateral on Investments | 440.1 | 415.4 | |||||
Other Liabilities | 1,449.5 | 1,501.1 | |||||
Total Liabilities | 54,543.9 | 51,899.7 | |||||
Stockholders’ Equity | |||||||
Common Stock | 30.3 | 30.3 | |||||
Additional Paid-in Capital | 2,263.0 | 2,247.2 | |||||
Accumulated Other Comprehensive Income | 450.7 | 16.1 | |||||
Retained Earnings | 8,542.4 | 7,995.2 | |||||
Treasury Stock | (1,925.2 | ) | (1,624.9 | ) | |||
Total Stockholders’ Equity | 9,361.2 | 8,663.9 | |||||
Total Liabilities and Stockholders’ Equity | $ | 63,905.1 | $ | 60,563.6 |
6
Unum Group Deferred Acquisition Costs by Segment
Unum US | Unum UK | Colonial Life | Consolidated | ||||||||||||
Balances at December 31, 2014 | $ | 1,096.5 | $ | 30.4 | $ | 774.4 | $ | 1,901.3 | |||||||
Capitalization | 307.3 | 9.6 | 252.8 | 569.7 | |||||||||||
Amortization | (272.3 | ) | (11.3 | ) | (198.7 | ) | (482.3 | ) | |||||||
Adjustment Related to Unrealized Investment Gains and Losses | 4.9 | — | 16.5 | 21.4 | |||||||||||
Foreign Currency | — | (1.6 | ) | — | (1.6 | ) | |||||||||
Balances at December 31, 2015 | 1,136.4 | 27.1 | 845.0 | 2,008.5 | |||||||||||
Capitalization | 239.8 | 6.1 | 201.1 | 447.0 | |||||||||||
Amortization | (214.0 | ) | (7.4 | ) | (155.8 | ) | (377.2 | ) | |||||||
Adjustment Related to Unrealized Investment Gains and Losses | (0.7 | ) | — | (26.0 | ) | (26.7 | ) | ||||||||
Foreign Currency | — | (3.2 | ) | — | (3.2 | ) | |||||||||
Balances at September 30, 2016 | $ | 1,161.5 | $ | 22.6 | $ | 864.3 | $ | 2,048.4 |
6. 1
Unum Group Balance Sheets by Segment - September 30, 2016
Unum US | |||||||||||||||||||||||||||||||||||
Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Investments | $ | 9,117.9 | $ | 2,388.8 | $ | 4,642.3 | $ | 16,149.0 | $ | 3,099.9 | $ | 2,858.7 | $ | 28,866.0 | $ | 2,135.0 | $ | 53,108.6 | |||||||||||||||||
Deferred Acquisition Costs | 87.6 | 72.3 | 1,001.5 | 1,161.4 | 22.7 | 864.3 | — | — | 2,048.4 | ||||||||||||||||||||||||||
Goodwill | — | — | 271.0 | 271.0 | 38.2 | 27.6 | — | — | 336.8 | ||||||||||||||||||||||||||
All Other | 455.4 | 155.9 | 273.1 | 884.4 | 235.2 | 189.9 | 5,955.9 | 1,145.9 | 8,411.3 | ||||||||||||||||||||||||||
Total Assets | $ | 9,660.9 | $ | 2,617.0 | $ | 6,187.9 | $ | 18,465.8 | $ | 3,396.0 | $ | 3,940.5 | $ | 34,821.9 | $ | 3,280.9 | $ | 63,905.1 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 7,775.2 | $ | 1,718.9 | $ | 3,904.3 | $ | 13,398.4 | $ | 2,582.0 | $ | 2,322.1 | $ | 30,973.5 | $ | — | $ | 49,276.0 | |||||||||||||||||
Debt | — | — | — | — | — | — | 269.7 | 2,750.1 | 3,019.8 | ||||||||||||||||||||||||||
All Other | 284.3 | 72.6 | 358.0 | 714.9 | 80.8 | 284.9 | (52.2 | ) | 1,219.7 | 2,248.1 | |||||||||||||||||||||||||
Total Liabilities | 8,059.5 | 1,791.5 | 4,262.3 | 14,113.3 | 2,662.8 | 2,607.0 | 31,191.0 | 3,969.8 | 54,543.9 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,568.4 | 775.6 | 1,764.7 | 4,108.7 | 600.0 | 1,208.2 | 3,119.8 | (813.9 | ) | 8,222.8 | |||||||||||||||||||||||||
Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | 33.0 | 49.9 | 160.9 | 243.8 | 133.2 | 125.3 | 511.1 | 125.0 | 1,138.4 | ||||||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,601.4 | 825.5 | 1,925.6 | 4,352.5 | 733.2 | 1,333.5 | 3,630.9 | (688.9 | ) | 9,361.2 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 9,660.9 | $ | 2,617.0 | $ | 6,187.9 | $ | 18,465.8 | $ | 3,396.0 | $ | 3,940.5 | $ | 34,821.9 | $ | 3,280.9 | $ | 63,905.1 |
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with our target capital levels for regulatory and rating agency purposes. We modify this formula periodically to recognize changes in the views of capital requirements.
6. 2
Unum Group Balance Sheets by Segment - December 31, 2015 - As Adjusted
Unum US | |||||||||||||||||||||||||||||||||||
Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Investments | $ | 8,761.1 | $ | 2,724.2 | $ | 4,119.8 | $ | 15,605.1 | $ | 3,131.2 | $ | 2,650.5 | $ | 27,005.7 | $ | 1,631.2 | $ | 50,023.7 | |||||||||||||||||
Deferred Acquisition Costs | 79.3 | 66.9 | 990.2 | 1,136.4 | 27.1 | 845.0 | — | — | 2,008.5 | ||||||||||||||||||||||||||
Goodwill | — | — | 187.6 | 187.6 | 43.3 | — | — | — | 230.9 | ||||||||||||||||||||||||||
All Other | 599.7 | 160.6 | 553.0 | 1,313.3 | 230.8 | 281.3 | 5,995.2 | 479.9 | 8,300.5 | ||||||||||||||||||||||||||
Total Assets | $ | 9,440.1 | $ | 2,951.7 | $ | 5,850.6 | $ | 18,242.4 | $ | 3,432.4 | $ | 3,776.8 | $ | 33,000.9 | $ | 2,111.1 | $ | 60,563.6 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 7,575.1 | $ | 1,735.0 | $ | 3,704.8 | $ | 13,014.9 | $ | 2,649.5 | $ | 2,221.7 | $ | 29,197.9 | $ | — | $ | 47,084.0 | |||||||||||||||||
Debt | — | — | — | — | — | — | 332.5 | 2,468.9 | 2,801.4 | ||||||||||||||||||||||||||
All Other | 370.0 | 131.6 | 371.4 | 873.0 | 71.2 | 258.6 | (33.7 | ) | 845.2 | 2,014.3 | |||||||||||||||||||||||||
Total Liabilities | 7,945.1 | 1,866.6 | 4,076.2 | 13,887.9 | 2,720.7 | 2,480.3 | 29,496.7 | 3,314.1 | 51,899.7 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,488.9 | 1,070.3 | 1,689.9 | 4,249.1 | 652.9 | 1,239.9 | 3,164.0 | (1,224.3 | ) | 8,081.6 | |||||||||||||||||||||||||
Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | 6.1 | 14.8 | 84.5 | 105.4 | 58.8 | 56.6 | 340.2 | 21.3 | 582.3 | ||||||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,495.0 | 1,085.1 | 1,774.4 | 4,354.5 | 711.7 | 1,296.5 | 3,504.2 | (1,203.0 | ) | 8,663.9 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 9,440.1 | $ | 2,951.7 | $ | 5,850.6 | $ | 18,242.4 | $ | 3,432.4 | $ | 3,776.8 | $ | 33,000.9 | $ | 2,111.1 | $ | 60,563.6 |
6. 3
Unum Group Financial Results by Segment
We measure and analyze our segment performance on the basis of "operating revenue" and "operating income" or "operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of net realized investment gains and losses and non-operating retirement-related gains or losses as specified in the following pages. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
9/30/2016 | 9/30/2015 | % Change | 9/30/2016 | 9/30/2015 | % Change | ||||||||||||||||
Premium Income | |||||||||||||||||||||
Unum US | $ | 1,315.0 | $ | 1,241.8 | 5.9 | % | $ | 3,915.7 | $ | 3,708.4 | 5.6 | % | |||||||||
Unum UK | 127.3 | 144.6 | (12.0 | ) | 407.4 | 425.8 | (4.3 | ) | |||||||||||||
Colonial Life | 354.1 | 333.1 | 6.3 | 1,056.7 | 1,001.2 | 5.5 | |||||||||||||||
Closed Block | 293.0 | 301.3 | (2.8 | ) | 878.7 | 909.2 | (3.4 | ) | |||||||||||||
2,089.4 | 2,020.8 | 3.4 | 6,258.5 | 6,044.6 | 3.5 | ||||||||||||||||
Net Investment Income | |||||||||||||||||||||
Unum US | 207.3 | 214.3 | (3.3 | ) | 622.4 | 645.0 | (3.5 | ) | |||||||||||||
Unum UK | 28.5 | 28.0 | 1.8 | 89.3 | 90.1 | (0.9 | ) | ||||||||||||||
Colonial Life | 36.1 | 35.9 | 0.6 | 105.7 | 109.8 | (3.7 | ) | ||||||||||||||
Closed Block | 334.1 | 327.5 | 2.0 | 1,008.6 | 979.6 | 3.0 | |||||||||||||||
Corporate | 5.4 | 6.4 | (15.6 | ) | 15.1 | 20.3 | (25.6 | ) | |||||||||||||
611.4 | 612.1 | (0.1 | ) | 1,841.1 | 1,844.8 | (0.2 | ) | ||||||||||||||
Other Income | |||||||||||||||||||||
Unum US | 28.7 | 28.1 | 2.1 | 85.6 | 90.4 | (5.3 | ) | ||||||||||||||
Unum UK | — | — | — | 0.2 | — | 100.0 | |||||||||||||||
Colonial Life | 0.4 | 0.1 | N.M. | 1.0 | 0.1 | N.M. | |||||||||||||||
Closed Block | 21.5 | 21.5 | — | 65.3 | 67.5 | (3.3 | ) | ||||||||||||||
Corporate | 0.9 | 1.8 | (50.0 | ) | 2.5 | 2.6 | (3.8 | ) | |||||||||||||
51.5 | 51.5 | — | 154.6 | 160.6 | (3.7 | ) | |||||||||||||||
Total Operating Revenue | |||||||||||||||||||||
Unum US | 1,551.0 | 1,484.2 | 4.5 | 4,623.7 | 4,443.8 | 4.0 | |||||||||||||||
Unum UK | 155.8 | 172.6 | (9.7 | ) | 496.9 | 515.9 | (3.7 | ) | |||||||||||||
Colonial Life | 390.6 | 369.1 | 5.8 | 1,163.4 | 1,111.1 | 4.7 | |||||||||||||||
Closed Block | 648.6 | 650.3 | (0.3 | ) | 1,952.6 | 1,956.3 | (0.2 | ) | |||||||||||||
Corporate | 6.3 | 8.2 | (23.2 | ) | 17.6 | 22.9 | (23.1 | ) | |||||||||||||
$ | 2,752.3 | $ | 2,684.4 | 2.5 | $ | 8,254.2 | $ | 8,050.0 | 2.5 |
7
Unum Group Financial Results by Segment - Continued
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
9/30/2016 | 9/30/2015 | % Change | 9/30/2016 | 9/30/2015 | % Change | ||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||
Unum US | $ | 1,320.0 | $ | 1,265.5 | 4.3 | % | $ | 3,949.6 | $ | 3,808.0 | 3.7 | % | |||||||||
Unum UK | 127.6 | 139.9 | (8.8 | ) | 398.2 | 412.3 | (3.4 | ) | |||||||||||||
Colonial Life | 311.6 | 292.8 | 6.4 | 929.1 | 879.6 | 5.6 | |||||||||||||||
Closed Block | 620.0 | 622.6 | (0.4 | ) | 1,857.7 | 1,865.3 | (0.4 | ) | |||||||||||||
Corporate | 47.9 | 35.1 | 36.5 | 126.7 | 113.1 | 12.0 | |||||||||||||||
2,427.1 | 2,355.9 | 3.0 | 7,261.3 | 7,078.3 | 2.6 | ||||||||||||||||
Income (Loss) Before Income Tax, Net Realized Investment Gain (Loss), and Non-operating Retirement-related Loss | |||||||||||||||||||||
Unum US | 231.0 | 218.7 | 5.6 | 674.1 | 635.8 | 6.0 | |||||||||||||||
Unum UK | 28.2 | 32.7 | (13.8 | ) | 98.7 | 103.6 | (4.7 | ) | |||||||||||||
Colonial Life | 79.0 | 76.3 | 3.5 | 234.3 | 231.5 | 1.2 | |||||||||||||||
Closed Block | 28.6 | 27.7 | 3.2 | 94.9 | 91.0 | 4.3 | |||||||||||||||
Corporate | (41.6 | ) | (26.9 | ) | (54.6 | ) | (109.1 | ) | (90.2 | ) | (21.0 | ) | |||||||||
325.2 | 328.5 | (1.0 | ) | 992.9 | 971.7 | 2.2 | |||||||||||||||
Income Tax Expense | 93.9 | 105.5 | (11.0 | ) | 299.1 | 301.3 | (0.7 | ) | |||||||||||||
Income Before Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss, Net of Tax | 231.3 | 223.0 | 3.7 | 693.8 | 670.4 | 3.5 | |||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $3.7; $(9.3); $(1.7); $(17.5)) | 7.3 | (17.3 | ) | 142.2 | (2.5 | ) | (23.6 | ) | 89.4 | ||||||||||||
Non-operating Retirement-related Loss (net of tax benefit of ($1.5; $1.1; $4.3; $3.1) | (2.6 | ) | (1.9 | ) | (36.8 | ) | (7.9 | ) | (5.8 | ) | (36.2 | ) | |||||||||
Net Income | $ | 236.0 | $ | 203.8 | 15.8 | $ | 683.4 | $ | 641.0 | 6.6 |
7. 1
Unum Group Quarterly Historical Financial Results by Segment
9/30/16 | 6/30/16 | 3/31/16 | 12/31/15 | 9/30/15 | 6/30/15 | 3/31/15 | 12/31/14 | 9/30/14 | |||||||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||||||||||||||
Unum US | $ | 1,315.0 | $ | 1,299.4 | $ | 1,301.3 | $ | 1,251.6 | $ | 1,241.8 | $ | 1,236.4 | $ | 1,230.2 | $ | 1,186.8 | $ | 1,162.7 | |||||||||||||||||
Unum UK | 127.3 | 140.8 | 139.3 | 150.4 | 144.6 | 142.2 | 139.0 | 148.9 | 152.6 | ||||||||||||||||||||||||||
Colonial Life | 354.1 | 351.4 | 351.2 | 337.4 | 333.1 | 335.9 | 332.2 | 321.1 | 319.4 | ||||||||||||||||||||||||||
Closed Block | 293.0 | 290.0 | 295.7 | 298.4 | 301.3 | 303.0 | 304.9 | 311.1 | 312.5 | ||||||||||||||||||||||||||
2,089.4 | 2,081.6 | 2,087.5 | 2,037.8 | 2,020.8 | 2,017.5 | 2,006.3 | 1,967.9 | 1,947.2 | |||||||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||||||||||||
Unum US | 207.3 | 207.7 | 207.4 | 220.3 | 214.3 | 215.7 | 215.0 | 223.2 | 214.4 | ||||||||||||||||||||||||||
Unum UK | 28.5 | 34.0 | 26.8 | 34.8 | 28.0 | 38.6 | 23.5 | 38.7 | 34.4 | ||||||||||||||||||||||||||
Colonial Life | 36.1 | 35.6 | 34.0 | 35.6 | 35.9 | 36.9 | 37.0 | 37.6 | 35.5 | ||||||||||||||||||||||||||
Closed Block | 334.1 | 341.1 | 333.4 | 340.4 | 327.5 | 331.7 | 320.4 | 323.0 | 317.2 | ||||||||||||||||||||||||||
Corporate | 5.4 | 4.9 | 4.8 | 5.3 | 6.4 | 7.8 | 6.1 | 10.2 | 9.8 | ||||||||||||||||||||||||||
611.4 | 623.3 | 606.4 | 636.4 | 612.1 | 630.7 | 602.0 | 632.7 | 611.3 | |||||||||||||||||||||||||||
Other Income | |||||||||||||||||||||||||||||||||||
Unum US | 28.7 | 27.9 | 29.0 | 28.8 | 28.1 | 31.4 | 30.9 | 30.7 | 30.2 | ||||||||||||||||||||||||||
Unum UK | — | 0.2 | — | — | — | — | — | (0.1 | ) | — | |||||||||||||||||||||||||
Colonial Life | 0.4 | 0.3 | 0.3 | — | 0.1 | — | — | — | 0.1 | ||||||||||||||||||||||||||
Closed Block | 21.5 | 21.4 | 22.4 | 21.8 | 21.5 | 22.8 | 23.2 | 22.3 | 23.4 | ||||||||||||||||||||||||||
Corporate | 0.9 | 1.3 | 0.3 | 0.3 | 1.8 | 0.5 | 0.3 | 2.8 | 0.9 | ||||||||||||||||||||||||||
51.5 | 51.1 | 52.0 | 50.9 | 51.5 | 54.7 | 54.4 | 55.7 | 54.6 | |||||||||||||||||||||||||||
Total Operating Revenue | |||||||||||||||||||||||||||||||||||
Unum US | 1,551.0 | 1,535.0 | 1,537.7 | 1,500.7 | 1,484.2 | 1,483.5 | 1,476.1 | 1,440.7 | 1,407.3 | ||||||||||||||||||||||||||
Unum UK | 155.8 | 175.0 | 166.1 | 185.2 | 172.6 | 180.8 | 162.5 | 187.5 | 187.0 | ||||||||||||||||||||||||||
Colonial Life | 390.6 | 387.3 | 385.5 | 373.0 | 369.1 | 372.8 | 369.2 | 358.7 | 355.0 | ||||||||||||||||||||||||||
Closed Block | 648.6 | 652.5 | 651.5 | 660.6 | 650.3 | 657.5 | 648.5 | 656.4 | 653.1 | ||||||||||||||||||||||||||
Corporate | 6.3 | 6.2 | 5.1 | 5.6 | 8.2 | 8.3 | 6.4 | 13.0 | 10.7 | ||||||||||||||||||||||||||
$ | 2,752.3 | $ | 2,756.0 | $ | 2,745.9 | $ | 2,725.1 | $ | 2,684.4 | $ | 2,702.9 | $ | 2,662.7 | $ | 2,656.3 | $ | 2,613.1 |
8
Unum Group Quarterly Historical Financial Results by Segment - Continued
9/30/16 | 6/30/16 | 3/31/16 | 12/31/15 | 9/30/15 | 6/30/15 | 3/31/15 | 12/31/14 | 9/30/14 | |||||||||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||||||||||||||
Unum US | $ | 1,320.0 | $ | 1,307.8 | $ | 1,321.8 | $ | 1,286.5 | $ | 1,265.5 | $ | 1,280.7 | $ | 1,261.8 | $ | 1,231.2 | $ | 1,195.2 | |||||||||||||||||
Unum UK | 127.6 | 138.1 | 132.5 | 148.2 | 139.9 | 142.5 | 129.9 | 149.3 | 153.5 | ||||||||||||||||||||||||||
Colonial Life | 311.6 | 309.4 | 308.1 | 295.4 | 292.8 | 295.2 | 291.6 | 284.7 | 284.0 | ||||||||||||||||||||||||||
Closed Block | 620.0 | 619.9 | 617.8 | 632.5 | 622.6 | 620.9 | 621.8 | 1,325.2 | 627.4 | ||||||||||||||||||||||||||
Corporate | 47.9 | 41.9 | 36.9 | 40.2 | 35.1 | 41.7 | 36.3 | 37.4 | 35.8 | ||||||||||||||||||||||||||
2,427.1 | 2,417.1 | 2,417.1 | 2,402.8 | 2,355.9 | 2,381.0 | 2,341.4 | 3,027.8 | 2,295.9 | |||||||||||||||||||||||||||
Income (Loss) Before Income Tax, Net Realized Investment Gain (Loss), and Non-operating Retirement-related Loss | |||||||||||||||||||||||||||||||||||
Unum US | 231.0 | 227.2 | 215.9 | 214.2 | 218.7 | 202.8 | 214.3 | 209.5 | 212.1 | ||||||||||||||||||||||||||
Unum UK | 28.2 | 36.9 | 33.6 | 37.0 | 32.7 | 38.3 | 32.6 | 38.2 | 33.5 | ||||||||||||||||||||||||||
Colonial Life | 79.0 | 77.9 | 77.4 | 77.6 | 76.3 | 77.6 | 77.6 | 74.0 | 71.0 | ||||||||||||||||||||||||||
Closed Block | 28.6 | 32.6 | 33.7 | 28.1 | 27.7 | 36.6 | 26.7 | (668.8 | ) | 25.7 | |||||||||||||||||||||||||
Corporate | (41.6 | ) | (35.7 | ) | (31.8 | ) | (34.6 | ) | (26.9 | ) | (33.4 | ) | (29.9 | ) | (24.4 | ) | (25.1 | ) | |||||||||||||||||
325.2 | 338.9 | 328.8 | 322.3 | 328.5 | 321.9 | 321.3 | (371.5 | ) | 317.2 | ||||||||||||||||||||||||||
Income Tax Expense (Benefit) | 93.9 | 103.2 | 102.0 | 91.7 | 105.5 | 99.3 | 96.5 | (143.4 | ) | 98.1 | |||||||||||||||||||||||||
Income (Loss) Before Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss, Net of Tax | 231.3 | 235.7 | 226.8 | 230.6 | 223.0 | 222.6 | 224.8 | (228.1 | ) | 219.1 | |||||||||||||||||||||||||
Net Realized Investment Gain (Loss) | 11.0 | 5.3 | (20.5 | ) | (2.7 | ) | (26.6 | ) | 0.8 | (15.3 | ) | (17.3 | ) | 1.2 | |||||||||||||||||||||
Tax Expense (Benefit) on Net Realized Investment Gain (Loss) | 3.7 | 1.5 | (6.9 | ) | (0.2 | ) | (9.3 | ) | (2.9 | ) | (5.3 | ) | (6.1 | ) | 0.3 | ||||||||||||||||||||
Non-operating Retirement-related Loss | (4.1 | ) | (4.0 | ) | (4.1 | ) | (3.0 | ) | (3.0 | ) | (2.9 | ) | (3.0 | ) | (65.8 | ) | (1.4 | ) | |||||||||||||||||
Tax Benefit on Non-operating Retirement-related Loss | (1.5 | ) | (1.3 | ) | (1.5 | ) | (1.0 | ) | (1.1 | ) | (0.9 | ) | (1.1 | ) | (22.9 | ) | (0.5 | ) | |||||||||||||||||
Net Income (Loss) | $ | 236.0 | $ | 236.8 | $ | 210.6 | $ | 226.1 | $ | 203.8 | $ | 224.3 | $ | 212.9 | $ | (282.2 | ) | $ | 219.1 | ||||||||||||||||
Net Income (Loss) Per Common Share - Assuming Dilution | $ | 1.01 | $ | 1.00 | $ | 0.88 | $ | 0.93 | $ | 0.83 | $ | 0.90 | $ | 0.84 | $ | (1.12 | ) | $ | 0.86 |
8. 1
Unum Group Financial Results for Unum US Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | $ | 1,315.0 | $ | 1,241.8 | $ | 3,915.7 | $ | 3,708.4 | $ | 4,960.0 | $ | 4,659.7 | |||||||||||
Net Investment Income | 207.3 | 214.3 | 622.4 | 645.0 | 865.3 | 878.9 | |||||||||||||||||
Other Income | 28.7 | 28.1 | 85.6 | 90.4 | 119.2 | 122.1 | |||||||||||||||||
Total | 1,551.0 | 1,484.2 | 4,623.7 | 4,443.8 | 5,944.5 | 5,660.7 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 912.1 | 866.6 | 2,712.7 | 2,586.3 | 3,476.7 | 3,288.1 | |||||||||||||||||
Commissions | 145.4 | 137.4 | 439.8 | 421.8 | 562.2 | 528.7 | |||||||||||||||||
Deferral of Acquisition Costs | (76.2 | ) | (74.1 | ) | (239.8 | ) | (230.7 | ) | (307.3 | ) | (292.7 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 64.3 | 65.0 | 214.0 | 216.4 | 272.3 | 248.1 | |||||||||||||||||
Other Expenses | 274.4 | 270.6 | 822.9 | 814.2 | 1,090.6 | 1,043.6 | |||||||||||||||||
Total | 1,320.0 | 1,265.5 | 3,949.6 | 3,808.0 | 5,094.5 | 4,815.8 | |||||||||||||||||
Operating Income | $ | 231.0 | $ | 218.7 | $ | 674.1 | $ | 635.8 | $ | 850.0 | $ | 844.9 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 69.4 | % | 69.8 | % | 69.3 | % | 69.7 | % | 70.1 | % | 70.6 | % | |||||||||||
Other Expense Ratio | 20.9 | % | 21.8 | % | 21.0 | % | 22.0 | % | 22.0 | % | 22.4 | % | |||||||||||
Operating Income Ratio | 17.6 | % | 17.6 | % | 17.2 | % | 17.1 | % | 17.1 | % | 18.1 | % |
9
Unum Group Financial Results for Unum US Group Disability
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | $ | 428.1 | $ | 414.3 | $ | 1,291.6 | $ | 1,229.0 | $ | 1,644.7 | $ | 1,553.5 | |||||||||||
Group Short-term Disability | 155.5 | 153.2 | 469.2 | 452.5 | 607.4 | 558.1 | |||||||||||||||||
Total Premium Income | 583.6 | 567.5 | 1,760.8 | 1,681.5 | 2,252.1 | 2,111.6 | |||||||||||||||||
Net Investment Income | 120.1 | 121.7 | 360.7 | 371.9 | 496.5 | 515.9 | |||||||||||||||||
Other Income | 22.8 | 21.6 | 68.2 | 70.0 | 92.9 | 91.0 | |||||||||||||||||
Total | 726.5 | 710.8 | 2,189.7 | 2,123.4 | 2,841.5 | 2,718.5 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 458.5 | 457.1 | 1,404.0 | 1,367.9 | 1,834.0 | 1,746.4 | |||||||||||||||||
Commissions | 44.2 | 42.4 | 134.3 | 128.9 | 172.2 | 161.2 | |||||||||||||||||
Deferral of Acquisition Costs | (11.6 | ) | (10.3 | ) | (35.3 | ) | (31.8 | ) | (43.2 | ) | (40.2 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 9.0 | 8.4 | 27.0 | 25.2 | 33.7 | 26.3 | |||||||||||||||||
Other Expenses | 141.0 | 142.4 | 429.5 | 426.9 | 572.4 | 550.0 | |||||||||||||||||
Total | 641.1 | 640.0 | 1,959.5 | 1,917.1 | 2,569.1 | 2,443.7 | |||||||||||||||||
Operating Income | $ | 85.4 | $ | 70.8 | $ | 230.2 | $ | 206.3 | $ | 272.4 | $ | 274.8 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 78.6 | % | 80.5 | % | 79.7 | % | 81.3 | % | 81.4 | % | 82.7 | % | |||||||||||
Other Expense Ratio | 24.2 | % | 25.1 | % | 24.4 | % | 25.4 | % | 25.4 | % | 26.0 | % | |||||||||||
Operating Income Ratio | 14.6 | % | 12.5 | % | 13.1 | % | 12.3 | % | 12.1 | % | 13.0 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Group Long-term Disability | 90.5 | % | 92.1 | % | 92.1 | % | 90.6 | % | |||||||||||||||
Group Short-term Disability | 87.4 | % | 87.9 | % | 88.1 | % | 89.6 | % |
9. 1
Unum Group Financial Results for Unum US Group Life and Accidental Death & Dismemberment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Life | $ | 353.4 | $ | 336.5 | $ | 1,053.6 | $ | 1,007.5 | $ | 1,347.4 | $ | 1,262.3 | |||||||||||
Accidental Death & Dismemberment | 35.3 | 32.1 | 104.8 | 98.0 | 131.7 | 125.9 | |||||||||||||||||
Total Premium Income | 388.7 | 368.6 | 1,158.4 | 1,105.5 | 1,479.1 | 1,388.2 | |||||||||||||||||
Net Investment Income | 28.1 | 34.7 | 85.5 | 102.0 | 135.1 | 135.2 | |||||||||||||||||
Other Income | 1.1 | 0.5 | 3.3 | 1.5 | 2.1 | 1.4 | |||||||||||||||||
Total | 417.9 | 403.8 | 1,247.2 | 1,209.0 | 1,616.3 | 1,524.8 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 282.2 | 261.8 | 832.5 | 792.5 | 1,061.6 | 975.8 | |||||||||||||||||
Commissions | 31.5 | 30.0 | 94.8 | 90.5 | 121.2 | 113.3 | |||||||||||||||||
Deferral of Acquisition Costs | (8.9 | ) | (7.9 | ) | (27.4 | ) | (24.7 | ) | (33.3 | ) | (31.3 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 7.3 | 6.5 | 22.0 | 19.6 | 26.2 | 21.4 | |||||||||||||||||
Other Expenses | 52.4 | 53.2 | 159.6 | 160.5 | 215.7 | 205.2 | |||||||||||||||||
Total | 364.5 | 343.6 | 1,081.5 | 1,038.4 | 1,391.4 | 1,284.4 | |||||||||||||||||
Operating Income | $ | 53.4 | $ | 60.2 | $ | 165.7 | $ | 170.6 | $ | 224.9 | $ | 240.4 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 72.6 | % | 71.0 | % | 71.9 | % | 71.7 | % | 71.8 | % | 70.3 | % | |||||||||||
Other Expense Ratio | 13.5 | % | 14.4 | % | 13.8 | % | 14.5 | % | 14.6 | % | 14.8 | % | |||||||||||
Operating Income Ratio | 13.7 | % | 16.3 | % | 14.3 | % | 15.4 | % | 15.2 | % | 17.3 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Group Life | 90.3 | % | 88.5 | % | 89.2 | % | 90.8 | % | |||||||||||||||
Accidental Death & Dismemberment | 90.4 | % | 89.5 | % | 89.8 | % | 91.1 | % |
9. 2
Unum Group Financial Results for Unum US Supplemental and Voluntary
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Individual Disability | $ | 125.6 | $ | 119.6 | $ | 374.4 | $ | 355.9 | $ | 478.9 | $ | 466.1 | |||||||||||
Voluntary Benefits | 197.1 | 186.1 | 602.1 | 565.5 | 749.9 | 693.8 | |||||||||||||||||
Dental and Vision | 20.0 | — | 20.0 | — | — | — | |||||||||||||||||
Total Premium Income | 342.7 | 305.7 | 996.5 | 921.4 | 1,228.8 | 1,159.9 | |||||||||||||||||
Net Investment Income | 59.1 | 57.9 | 176.2 | 171.1 | 233.7 | 227.8 | |||||||||||||||||
Other Income | 4.8 | 6.0 | 14.1 | 18.9 | 24.2 | 29.7 | |||||||||||||||||
Total | 406.6 | 369.6 | 1,186.8 | 1,111.4 | 1,486.7 | 1,417.4 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 171.4 | 147.7 | 476.2 | 425.9 | 581.1 | 565.9 | |||||||||||||||||
Commissions | 69.7 | 65.0 | 210.7 | 202.4 | 268.8 | 254.2 | |||||||||||||||||
Deferral of Acquisition Costs | (55.7 | ) | (55.9 | ) | (177.1 | ) | (174.2 | ) | (230.8 | ) | (221.2 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 48.0 | 50.1 | 165.0 | 171.6 | 212.4 | 200.4 | |||||||||||||||||
Other Expenses | 81.0 | 75.0 | 233.8 | 226.8 | 302.5 | 288.4 | |||||||||||||||||
Total | 314.4 | 281.9 | 908.6 | 852.5 | 1,134.0 | 1,087.7 | |||||||||||||||||
Operating Income | $ | 92.2 | $ | 87.7 | $ | 278.2 | $ | 258.9 | $ | 352.7 | $ | 329.7 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratios: | |||||||||||||||||||||||
Individual Disability | 52.6 | % | 52.3 | % | 52.5 | % | 50.9 | % | 51.8 | % | 51.6 | % | |||||||||||
Voluntary Benefits | 46.5 | % | 45.8 | % | 44.2 | % | 43.3 | % | 44.4 | % | 46.9 | % | |||||||||||
Dental and Vision | 68.0 | % | — | % | 68.0 | % | — | % | — | % | — | % | |||||||||||
Other Expense Ratio | 23.6 | % | 24.5 | % | 23.5 | % | 24.6 | % | 24.6 | % | 24.9 | % | |||||||||||
Operating Income Ratio | 26.9 | % | 28.7 | % | 27.9 | % | 28.1 | % | 28.7 | % | 28.4 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Individual Disability | 91.2 | % | 90.2 | % | 90.3 | % | 90.0 | % | |||||||||||||||
Voluntary Benefits | 76.8 | % | 75.3 | % | 75.9 | % | 77.6 | % | |||||||||||||||
Dental and Vision | 84.5 | % | — | % | — | % | — | % |
9. 3
Unum Group Financial Results for Unum UK Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | $ | 85.5 | $ | 100.6 | $ | 274.1 | $ | 296.5 | $ | 397.4 | $ | 418.9 | |||||||||||
Group Life | 24.9 | 29.7 | 80.9 | 90.6 | 121.5 | 133.2 | |||||||||||||||||
Supplemental | 16.9 | 14.3 | 52.4 | 38.7 | 57.3 | 55.1 | |||||||||||||||||
Total Premium Income | 127.3 | 144.6 | 407.4 | 425.8 | 576.2 | 607.2 | |||||||||||||||||
Net Investment Income | 28.5 | 28.0 | 89.3 | 90.1 | 124.9 | 151.0 | |||||||||||||||||
Other Income | — | — | 0.2 | — | — | — | |||||||||||||||||
Total | 155.8 | 172.6 | 496.9 | 515.9 | 701.1 | 758.2 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 91.3 | 98.0 | 284.8 | 289.5 | 394.8 | 431.0 | |||||||||||||||||
Commissions | 9.2 | 11.3 | 27.9 | 33.6 | 41.8 | 42.8 | |||||||||||||||||
Deferral of Acquisition Costs | (2.1 | ) | (2.6 | ) | (6.1 | ) | (7.2 | ) | (9.6 | ) | (10.5 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 2.3 | 3.2 | 7.4 | 8.8 | 11.3 | 12.5 | |||||||||||||||||
Other Expenses | 26.9 | 30.0 | 84.2 | 87.6 | 122.2 | 134.6 | |||||||||||||||||
Total | 127.6 | 139.9 | 398.2 | 412.3 | 560.5 | 610.4 | |||||||||||||||||
Operating Income | $ | 28.2 | $ | 32.7 | $ | 98.7 | $ | 103.6 | $ | 140.6 | $ | 147.8 | |||||||||||
10
Unum Group Financial Results for Unum UK Segment - Continued
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
(in millions of pounds, except exchange rate) | 9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | |||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | £ | 65.1 | £ | 64.9 | £ | 196.7 | £ | 193.4 | £ | 259.9 | £ | 254.4 | |||||||||||
Group Life | 19.0 | 19.2 | 58.0 | 59.1 | 79.5 | 80.8 | |||||||||||||||||
Supplemental | 12.8 | 9.2 | 37.6 | 25.3 | 37.5 | 33.4 | |||||||||||||||||
Total Premium Income | 96.9 | 93.3 | 292.3 | 277.8 | 376.9 | 368.6 | |||||||||||||||||
Net Investment Income | 21.7 | 18.1 | 64.1 | 58.7 | 81.6 | 91.6 | |||||||||||||||||
Other Income | — | — | 0.1 | — | — | 0.1 | |||||||||||||||||
Total | 118.6 | 111.4 | 356.5 | 336.5 | 458.5 | 460.3 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 69.6 | 63.3 | 204.5 | 188.8 | 258.1 | 261.4 | |||||||||||||||||
Commissions | 7.0 | 7.3 | 20.0 | 22.0 | 27.4 | 26.0 | |||||||||||||||||
Deferral of Acquisition Costs | (1.6 | ) | (1.7 | ) | (4.4 | ) | (4.7 | ) | (6.3 | ) | (6.4 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 1.7 | 2.0 | 5.3 | 5.7 | 7.4 | 7.6 | |||||||||||||||||
Other Expenses | 20.4 | 19.4 | 60.4 | 57.1 | 79.9 | 81.9 | |||||||||||||||||
Total | 97.1 | 90.3 | 285.8 | 268.9 | 366.5 | 370.5 | |||||||||||||||||
Operating Income | £ | 21.5 | £ | 21.1 | £ | 70.7 | £ | 67.6 | £ | 92.0 | £ | 89.8 | |||||||||||
Weighted Average Pound/Dollar Exchange Rate | 1.312 | 1.550 | 1.396 | 1.533 | 1.528 | 1.646 | |||||||||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 71.8 | % | 67.8 | % | 70.0 | % | 68.0 | % | 68.5 | % | 70.9 | % | |||||||||||
Other Expense Ratio | 21.1 | % | 20.8 | % | 20.7 | % | 20.6 | % | 21.2 | % | 22.2 | % | |||||||||||
Operating Income Ratio | 22.2 | % | 22.6 | % | 24.2 | % | 24.3 | % | 24.4 | % | 24.4 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Group Long-term Disability | 88.7 | % | 88.5 | % | 89.2 | % | 90.1 | % | |||||||||||||||
Group Life | 80.1 | % | 80.6 | % | 80.0 | % | 76.0 | % | |||||||||||||||
Supplemental | 90.5 | % | 88.6 | % | 87.7 | % | 86.6 | % |
10. 1
Unum Group Financial Results for Colonial Life Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Accident, Sickness, and Disability | $ | 207.7 | $ | 196.5 | $ | 619.2 | $ | 591.1 | $ | 789.0 | $ | 759.8 | |||||||||||
Life | 68.0 | 62.5 | 203.4 | 188.1 | 252.4 | 231.8 | |||||||||||||||||
Cancer and Critical Illness | 78.4 | 74.1 | 234.1 | 222.0 | 297.2 | 282.1 | |||||||||||||||||
Total Premium Income | 354.1 | 333.1 | 1,056.7 | 1,001.2 | 1,338.6 | 1,273.7 | |||||||||||||||||
Net Investment Income | 36.1 | 35.9 | 105.7 | 109.8 | 145.4 | 145.5 | |||||||||||||||||
Other Income | 0.4 | 0.1 | 1.0 | 0.1 | 0.1 | 0.1 | |||||||||||||||||
Total | 390.6 | 369.1 | 1,163.4 | 1,111.1 | 1,484.1 | 1,419.3 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 182.6 | 170.5 | 541.2 | 510.2 | 683.0 | 660.6 | |||||||||||||||||
Commissions | 78.7 | 72.7 | 233.3 | 217.8 | 293.5 | 262.3 | |||||||||||||||||
Deferral of Acquisition Costs | (69.5 | ) | (62.7 | ) | (201.1 | ) | (187.2 | ) | (252.8 | ) | (220.8 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 52.2 | 48.8 | 155.8 | 150.2 | 198.7 | 180.2 | |||||||||||||||||
Other Expenses | 67.6 | 63.5 | 199.9 | 188.6 | 252.6 | 238.0 | |||||||||||||||||
Total | 311.6 | 292.8 | 929.1 | 879.6 | 1,175.0 | 1,120.3 | |||||||||||||||||
Operating Income | $ | 79.0 | $ | 76.3 | $ | 234.3 | $ | 231.5 | $ | 309.1 | $ | 299.0 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 51.6 | % | 51.2 | % | 51.2 | % | 51.0 | % | 51.0 | % | 51.9 | % | |||||||||||
Other Expense Ratio | 19.1 | % | 19.1 | % | 18.9 | % | 18.8 | % | 18.9 | % | 18.7 | % | |||||||||||
Operating Income Ratio | 22.3 | % | 22.9 | % | 22.2 | % | 23.1 | % | 23.1 | % | 23.5 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Accident, Sickness, and Disability | 75.2 | % | 74.8 | % | 74.8 | % | 75.5 | % | |||||||||||||||
Life | 84.8 | % | 85.0 | % | 84.9 | % | 85.2 | % | |||||||||||||||
Cancer and Critical Illness | 82.6 | % | 81.6 | % | 81.2 | % | 83.5 | % |
11
Unum Group Financial Results for Closed Block Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Individual Disability | $ | 129.9 | $ | 142.2 | $ | 394.0 | $ | 433.0 | $ | 572.4 | $ | 624.8 | |||||||||||
Long-term Care | 161.4 | 158.6 | 482.0 | 475.0 | 633.5 | 630.9 | |||||||||||||||||
All Other | 1.7 | 0.5 | 2.7 | 1.2 | 1.7 | 0.9 | |||||||||||||||||
Total Premium Income | 293.0 | 301.3 | 878.7 | 909.2 | 1,207.6 | 1,256.6 | |||||||||||||||||
Net Investment Income | 334.1 | 327.5 | 1,008.6 | 979.6 | 1,320.0 | 1,281.5 | |||||||||||||||||
Other Income | 21.5 | 21.5 | 65.3 | 67.5 | 89.3 | 91.8 | |||||||||||||||||
Total | 648.6 | 650.3 | 1,952.6 | 1,956.3 | 2,616.9 | 2,629.9 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 556.6 | 555.8 | 1,667.2 | 1,661.6 | 2,228.3 | 2,931.1 | |||||||||||||||||
Commissions | 23.5 | 24.9 | 70.7 | 74.6 | 98.8 | 101.5 | |||||||||||||||||
Interest and Debt Expense | 1.7 | 1.6 | 5.1 | 5.0 | 6.6 | 7.3 | |||||||||||||||||
Other Expenses | 38.2 | 40.3 | 114.7 | 124.1 | 164.1 | 168.2 | |||||||||||||||||
Total | 620.0 | 622.6 | 1,857.7 | 1,865.3 | 2,497.8 | 3,208.1 | |||||||||||||||||
Income (Loss) Before Income Tax and Net Realized Investment Gains and Losses | 28.6 | 27.7 | 94.9 | 91.0 | 119.1 | (578.2 | ) | ||||||||||||||||
Long-term Care Reserve Increase | — | — | — | — | — | 698.2 | |||||||||||||||||
Operating Income | $ | 28.6 | $ | 27.7 | $ | 94.9 | $ | 91.0 | $ | 119.1 | $ | 120.0 | |||||||||||
Interest Adjusted Loss Ratios: | |||||||||||||||||||||||
Individual Disability | 81.5 | % | 80.8 | % | 83.3 | % | 81.4 | % | 82.8 | % | 83.6 | % | |||||||||||
Long-term Care | 93.8 | % | 89.9 | % | 91.8 | % | 86.9 | % | 87.6 | % | 196.6 | % | |||||||||||
Long-term Care Excluding the Reserve Increase | 85.9 | % | |||||||||||||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Other Expense Ratio | 13.0 | % | 13.4 | % | 13.1 | % | 13.6 | % | 13.6 | % | 13.4 | % | |||||||||||
Income (Loss) Ratio | 9.8 | % | 9.2 | % | 10.8 | % | 10.0 | % | 9.9 | % | (46.0 | )% | |||||||||||
Operating Income Ratio | 9.8 | % | 9.2 | % | 10.8 | % | 10.0 | % | 9.9 | % | 9.5 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Individual Disability | 90.7 | % | 91.0 | % | 90.9 | % | 91.3 | % | |||||||||||||||
Long-term Care | 94.8 | % | 95.4 | % | 95.7 | % | 95.4 | % |
12
Unum Group Financial Results for Corporate Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | 12/31/2015 | 12/31/2014 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||
Net Investment Income | $ | 5.4 | $ | 6.4 | $ | 15.1 | $ | 20.3 | $ | 25.6 | $ | 35.3 | |||||||||||
Other Income | 0.9 | 1.8 | 2.5 | 2.6 | 2.9 | 5.0 | |||||||||||||||||
Total | 6.3 | 8.2 | 17.6 | 22.9 | 28.5 | 40.3 | |||||||||||||||||
Interest and Other Expenses | 47.9 | 35.1 | 126.7 | 113.1 | 153.3 | 157.9 | |||||||||||||||||
Operating Loss Including Costs Related to Early Retirement of Debt | (41.6 | ) | (26.9 | ) | (109.1 | ) | (90.2 | ) | (124.8 | ) | (117.6 | ) | |||||||||||
Costs Related to Early Retirement of Debt | — | — | — | — | — | 13.2 | |||||||||||||||||
Operating Loss | $ | (41.6 | ) | $ | (26.9 | ) | $ | (109.1 | ) | $ | (90.2 | ) | $ | (124.8 | ) | $ | (104.4 | ) |
13
Unum Group Reserves
September 30, 2016 | |||||||||||||||||||||||||||||
Gross | Total | ||||||||||||||||||||||||||||
Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 6,240.5 | $ | 600.4 | 29.3 | % | $ | 6,840.9 | $ | 73.0 | $ | 6,767.9 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 65.5 | 0.4 | 703.4 | 189.5 | 3.8 | 958.4 | 4.1 | 954.3 | |||||||||||||||||||||
Individual Disability | 545.6 | 3.0 | 1,279.8 | 132.3 | 6.0 | 1,957.7 | 106.3 | 1,851.4 | |||||||||||||||||||||
Voluntary Benefits | 1,474.9 | 8.1 | 48.2 | 54.2 | 0.5 | 1,577.3 | 28.3 | 1,549.0 | |||||||||||||||||||||
Dental and Vision | — | — | 1.8 | 6.7 | — | 8.5 | 0.2 | 8.3 | |||||||||||||||||||||
Unum US Segment | 2,086.0 | 11.5 | 8,273.7 | 983.1 | 39.6 | 11,342.8 | 211.9 | 11,130.9 | |||||||||||||||||||||
Unum UK Segment | 18.3 | 0.1 | 1,809.7 | 116.8 | 8.2 | 1,944.8 | 89.6 | 1,855.2 | |||||||||||||||||||||
Colonial Life Segment | 1,839.1 | 10.2 | 278.4 | 131.8 | 1.8 | 2,249.3 | 7.9 | 2,241.4 | |||||||||||||||||||||
Individual Disability | 538.7 | 3.0 | 9,736.8 | 261.9 | 42.8 | 10,537.4 | 1,586.9 | 8,950.5 | |||||||||||||||||||||
Long-term Care | 7,773.3 | 43.0 | 1,325.6 | 133.2 | 6.2 | 9,232.1 | 42.3 | 9,189.8 | |||||||||||||||||||||
Other | 5,829.4 | 32.2 | 191.3 | 126.0 | 1.4 | 6,146.7 | 4,998.2 | 1,148.5 | |||||||||||||||||||||
Closed Block Segment | 14,141.4 | 78.2 | 11,253.7 | 521.1 | 50.4 | 25,916.2 | 6,627.4 | 19,288.8 | |||||||||||||||||||||
Subtotal | $ | 18,084.8 | 100.0 | % | $ | 21,615.5 | $ | 1,752.8 | 100.0 | % | 41,453.1 | 6,936.8 | 34,516.3 | ||||||||||||||||
Adjustment Related to Unrealized Investment Gains and Losses | 5,775.5 | 379.7 | 5,395.8 | ||||||||||||||||||||||||||
Consolidated | $ | 47,228.6 | $ | 7,316.5 | $ | 39,912.1 |
The increase in the adjustment related to unrealized investment gains and losses, relative to year-end 2015, was due to a decrease in U.S. Treasury rates and credit spreads. This adjustment is applied to our reserves and is consistent with a similar adjustment to our invested assets.
14
Unum Group Reserves
December 31, 2015 | |||||||||||||||||||||||||||||
Gross | Total Reinsurance Ceded | ||||||||||||||||||||||||||||
Policy Reserves | Claim Reserves | Total Net | |||||||||||||||||||||||||||
% | Incurred | IBNR | % | Total | |||||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 6,347.0 | $ | 597.2 | 29.2 | % | $ | 6,944.2 | $ | 66.3 | $ | 6,877.9 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 68.3 | 0.4 | 725.9 | 186.8 | 3.8 | 981.0 | 4.8 | 976.2 | |||||||||||||||||||||
Individual Disability | 552.9 | 3.1 | 1,238.2 | 130.8 | 5.8 | 1,921.9 | 109.9 | 1,812.0 | |||||||||||||||||||||
Voluntary Benefits | 1,434.4 | 8.1 | 48.9 | 48.5 | 0.4 | 1,531.8 | 28.6 | 1,503.2 | |||||||||||||||||||||
Unum US Segment | 2,055.6 | 11.6 | 8,360.0 | 963.3 | 39.2 | 11,378.9 | 209.6 | 11,169.3 | |||||||||||||||||||||
Unum UK Segment | 21.0 | 0.1 | 2,053.6 | 135.0 | 9.2 | 2,209.6 | 101.2 | 2,108.4 | |||||||||||||||||||||
Colonial Life Segment | 1,760.0 | 10.0 | 276.5 | 132.2 | 1.7 | 2,168.7 | 8.1 | 2,160.6 | |||||||||||||||||||||
Individual Disability | 620.0 | 3.5 | 9,922.8 | 259.2 | 42.8 | 10,802.0 | 1,568.5 | 9,233.5 | |||||||||||||||||||||
Long-term Care | 7,383.3 | 41.9 | 1,225.4 | 123.4 | 5.7 | 8,732.1 | 42.5 | 8,689.6 | |||||||||||||||||||||
Other | 5,810.8 | 32.9 | 204.2 | 140.5 | 1.4 | 6,155.5 | 4,991.0 | 1,164.5 | |||||||||||||||||||||
Closed Block Segment | 13,814.1 | 78.3 | 11,352.4 | 523.1 | 49.9 | 25,689.6 | 6,602.0 | 19,087.6 | |||||||||||||||||||||
Subtotal | $ | 17,650.7 | 100.0 | % | $ | 22,042.5 | $ | 1,753.6 | 100.0 | % | 41,446.8 | 6,920.9 | 34,525.9 | ||||||||||||||||
Adjustment Related to Unrealized Investment Gains and Losses | 3,578.4 | 263.2 | 3,315.2 | ||||||||||||||||||||||||||
Consolidated | $ | 45,025.2 | $ | 7,184.1 | $ | 37,841.1 |
14. 1
Unum Group Investments
9/30/2016 | 9/30/2016 | 12/31/2015 | |||||||||||||||
Fixed Maturity Securities (Fair Value) | |||||||||||||||||
Public | $ | 30,149.7 | 65.1 | % | Selected Statistics | ||||||||||||
Asset-Backed Securities | 91.6 | 0.2 | Earned Book Yield | 5.29 | % | 5.40 | % | ||||||||||
Residential Mortgage-Backed Securities (1) | 2,163.1 | 4.7 | Average Duration (in years) | 7.77 | 7.54 | ||||||||||||
Commercial Mortgage-Backed Securities | 131.5 | 0.3 | |||||||||||||||
Private Placements | 5,407.1 | 11.7 | |||||||||||||||
High Yield | 3,594.9 | 7.8 | |||||||||||||||
Government Securities | 2,433.9 | 5.2 | |||||||||||||||
Municipal Securities (2) | 2,296.7 | 4.9 | |||||||||||||||
Redeemable Preferred Stocks | 47.0 | 0.1 | |||||||||||||||
Total | $ | 46,315.5 | 100.0 | % | |||||||||||||
Amortized Cost | Fair Value | ||||||||||||||||
Quality Ratings of Fixed Maturity Securities | Schedule BA and Non-Current | ||||||||||||||||
Aaa | 8.7 | % | 8.6 | % | Total Non-Current Investments | $ | 41.9 | $ | 36.8 | ||||||||
Aa | 7.8 | 8.5 | Total Schedule BA Assets | $ | 508.8 | $ | 443.5 | ||||||||||
A | 27.7 | 29.1 | |||||||||||||||
Baa | 46.9 | 46.0 | |||||||||||||||
Below Baa | 8.9 | 7.8 | |||||||||||||||
Total | 100.0 | % | 100.0 | % | |||||||||||||
(1) Includes $15.1 million of high yield mortgage-backed securities. | |||||||||||||||||
(2) Includes $1.4 million of high yield taxable municipal securities. |
15
Unum Group Investments at September 30, 2016
Fixed Maturity Securities - By Industry Classification - Unrealized Gain | ||||||||||||||||||||||||
Classification | Fair Value | Net Unrealized Gain | Fair Value of Fixed Maturity Securities with Gross Unrealized Loss | Gross Unrealized Loss | Fair Value of Fixed Maturity Securities with Gross Unrealized Gain | Gross Unrealized Gain | ||||||||||||||||||
Basic Industry | $ | 2,754.8 | $ | 295.6 | $ | 181.1 | $ | 9.9 | $ | 2,573.7 | $ | 305.5 | ||||||||||||
Capital Goods | 4,254.5 | 596.3 | 53.5 | 3.5 | 4,201.0 | 599.8 | ||||||||||||||||||
Communications | 3,183.0 | 517.7 | 152.2 | 7.2 | 3,030.8 | 524.9 | ||||||||||||||||||
Consumer Cyclical | 1,557.0 | 217.0 | 8.4 | — | 1,548.6 | 217.0 | ||||||||||||||||||
Consumer Non-Cyclical | 6,729.2 | 999.1 | 168.6 | 7.3 | 6,560.6 | 1,006.4 | ||||||||||||||||||
Energy | 5,272.6 | 546.0 | 612.4 | 50.3 | 4,660.2 | 596.3 | ||||||||||||||||||
Financial Institutions | 3,445.3 | 376.8 | 18.9 | 0.1 | 3,426.4 | 376.9 | ||||||||||||||||||
Mortgage/Asset-Backed | 2,386.2 | 207.4 | 10.2 | 0.3 | 2,376.0 | 207.7 | ||||||||||||||||||
Sovereigns | 981.7 | 232.7 | — | — | 981.7 | 232.7 | ||||||||||||||||||
Technology | 1,649.8 | 125.2 | 71.6 | 4.0 | 1,578.2 | 129.2 | ||||||||||||||||||
Transportation | 1,929.9 | 336.3 | 0.6 | — | 1,929.3 | 336.3 | ||||||||||||||||||
U.S. Government Agencies and Municipalities | 3,748.9 | 721.7 | 22.1 | 0.2 | 3,726.8 | 721.9 | ||||||||||||||||||
Public Utilities | 8,422.6 | 1,518.6 | 81.4 | 1.3 | 8,341.2 | 1,519.9 | ||||||||||||||||||
Total | $ | 46,315.5 | $ | 6,690.4 | $ | 1,381.0 | $ | 84.1 | $ | 44,934.5 | $ | 6,774.5 | ||||||||||||
Fixed Maturity Securities - Energy Classification - Unrealized Gain (Loss) | ||||||||||||||||||||||||
Midstream | $ | 2,310.1 | $ | 188.9 | $ | 207.8 | $ | 6.0 | $ | 2,102.3 | $ | 194.9 | ||||||||||||
Oil and Gas-Independent | 1,546.7 | 156.0 | 250.5 | 25.3 | 1,296.2 | 181.3 | ||||||||||||||||||
Oil Field | 171.2 | (5.4 | ) | 109.6 | 17.4 | 61.6 | 12.0 | |||||||||||||||||
Oil-Integrated | 891.2 | 170.9 | 13.5 | 0.4 | 877.7 | 171.3 | ||||||||||||||||||
Oil-Refining | 301.0 | 33.2 | 21.0 | 1.2 | 280.0 | 34.4 | ||||||||||||||||||
Other Energy | 52.4 | 2.4 | 10.0 | — | 42.4 | 2.4 | ||||||||||||||||||
Total | $ | 5,272.6 | $ | 546.0 | $ | 612.4 | $ | 50.3 | $ | 4,660.2 | $ | 596.3 | ||||||||||||
Gross Unrealized Loss on Fixed Maturity Securities By Length of Time in Unrealized Loss Position | ||||||||||||||||||||||||
Investment-Grade | Below-Investment-Grade | |||||||||||||||||||||||
Category | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||
Less than 91 days | $ | 194.1 | $ | 2.2 | $ | 103.2 | $ | 0.4 | ||||||||||||||||
91 through 180 days | 13.3 | 0.3 | 5.8 | 0.3 | ||||||||||||||||||||
181 through 270 days | 64.9 | 4.0 | 25.7 | 1.6 | ||||||||||||||||||||
271 days to 1 year | — | — | 12.1 | 0.9 | ||||||||||||||||||||
Greater than 1 year | 242.7 | 9.2 | 719.2 | 65.2 | ||||||||||||||||||||
Total | $ | 515.0 | $ | 15.7 | $ | 866.0 | $ | 68.4 | ||||||||||||||||
15. 1
Appendix to Statistical Supplement
2016 Significant Items
• | In August 2016, we acquired 100 percent of the shares and voting interests in H&J Capital, L.L.C., parent of Starmount Life Insurance Company and AlwaysCare Benefits (which collectively we refer to as Starmount) for an initial cash purchase price of $140.1 million, plus contingent cash consideration of $10.0 million. Starmount Life Insurance Company is an independent provider of dental and vision insurance in the U.S. workplace, and AlwaysCare Benefits is a nationally licensed, third-party administrator. Starmount's dental and vision products and new dental and vision products to be marketed by Unum US are reported in our Unum US segment within our supplemental and voluntary product lines. Colonial Life dental and vision products are expected to be introduced in 2018. This acquisition, the results of which are included in our consolidated financial statements for the period subsequent to the date of acquisition, is not expected to have a material impact on revenue or results of operations for 2016. |
• | In January 2016, we adopted a Financial Accounting Standards Board (FASB) update that simplified the presentation of deferred debt issuance costs by requiring these costs to be presented in the balance sheet as a reduction of the carrying amount of the debt liability to which the deferred costs relate, rather than classifying the deferred costs as an asset. This classification is consistent with the treatment of debt discounts. We applied the amendments in the update retrospectively, adjusting all prior period balance sheets and related metrics throughout this document. |
2015 Significant Items
• | In September 2015, we acquired 100 percent of the common shares and voting interests in National Dental Plan Limited and associated companies (National Dental) for a total cash purchase price of £35.9 million or $54.3 million. National Dental, a provider of dental insurance in the U.K. workplace, is reported in our Unum UK segment as part of our supplemental product line. This acquisition, the results of which are included in our consolidated financial statements for the period subsequent to the date of acquisition, did not have a material impact on revenue or results of operations during 2015. |
• | In January 2014, the FASB issued an update permitting entities to make an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). We adopted this update effective January 1, 2015 and applied the amendments retrospectively, adjusting all prior period operating results, balance sheets, and related metrics throughout this document. |
2014 Significant Items
• | Fourth quarter of 2014 reserve increase of $698.2 million before tax and $453.8 million after tax related to long-term care. |
• | Fourth quarter of 2014 settlement loss of $64.4 million before tax and $41.9 million after tax related to a pension plan amendment. |
• | Second quarter of 2014 costs related to early retirement of debt of $13.2 million before tax and $10.4 million after tax. |
• | In December 2014, we retired 60 million shares of our treasury stock with an average total cost of $1,451.7 million. |
16 |
Appendix to Statistical Supplement - Continued
Non-GAAP Financial Measures
We analyze our performance using non-GAAP financial measures which exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We believe the following non-GAAP financial measures are better performance measures and better indicators of the revenue and profitability and underlying trends in our business:
• | Consolidated operating revenue, which excludes realized investment gains or losses; |
• | After-tax operating income or loss, which excludes realized investment gains or losses, non-operating retirement-related gains or losses, and certain other items, as applicable; |
• | Operating return on equity, which is calculated using after-tax operating income or loss and excludes from equity the unrealized gain or loss on securities and net gain on cash flow hedges; |
• | Leverage ratio, which excludes the unrealized gain or loss on securities and net gain on cash flow hedges, and the non-recourse debt and associated capital of Northwind Holdings, LLC; and |
• | Book value per common share, which is calculated excluding accumulated other comprehensive income (AOCI). |
Realized investment gains or losses; non-operating retirement-related gains or losses; unrealized gains or losses on securities and net gains on cash flow hedges depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our Company. Leverage ratio and book value per common share excluding certain components of AOCI, certain of which tend to fluctuate depending on market conditions and general economic trends, are important measures. We also exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace the comparable GAAP measures in the determination of overall profitability.
Information reconciling the Company’s outlook on after-tax operating income growth per share to the comparable GAAP financial measure is not provided. The only amounts excluded from after-tax operating income are those described in the preceding paragraphs. While the amortization of prior period actuarial gains or losses in our net periodic benefit cost for our pensions and other postretirement benefit plans is generally consistent in a given annual period and can reasonably be predicted, the Company is unable to predict with reasonable certainty realized investment gains and losses, which are affected by overall market conditions and also by factors such as an economic or political change in the country of the issuer, a regulatory change pertaining to the issuer’s industry, a significant improvement or deterioration in the cash flows of the issuer, unforeseen accounting irregularities or fraud committed by an issuer, movement in credit spreads, ratings upgrades or downgrades, a change in the issuer’s marketplace or business prospects, or any other event that significantly affects the issuers of the fixed maturity securities which the Company holds in its investment portfolio. For a reconciliation of the most directly comparable GAAP measures to these non-GAAP financial measures, refer to the "Reconciliation of Non-GAAP Financial Measures" beginning on page 16.2.
16. 1
Reconciliation of Non-GAAP Financial Measures
Three Months Ended | |||||||||||||||||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||
Total Revenue | $ | 2,763.3 | $ | 2,761.3 | $ | 2,725.4 | $ | 2,722.4 | $ | 2,657.8 | $ | 2,703.7 | $ | 2,647.4 | $ | 2,639.0 | $ | 2,614.3 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||||||
Net Realized Investment Gain (Loss) | 11.0 | 5.3 | (20.5 | ) | (2.7 | ) | (26.6 | ) | 0.8 | (15.3 | ) | (17.3 | ) | 1.2 | |||||||||||||||||||||
Operating Revenue | $ | 2,752.3 | $ | 2,756.0 | $ | 2,745.9 | $ | 2,725.1 | $ | 2,684.4 | $ | 2,702.9 | $ | 2,662.7 | $ | 2,656.3 | $ | 2,613.1 |
Annualized | |||||||||||
After-Tax | Average | Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(1) | On Equity | |||||||||
Three Months Ended September 30, 2016 | |||||||||||
Unum US | $ | 151.0 | $ | 4,034.1 | 15.0 | % | |||||
Unum UK | 30.8 | 596.6 | 20.7 | % | |||||||
Colonial Life | 51.4 | 1,192.1 | 17.3 | % | |||||||
Core Operating Segments | 233.2 | 5,822.8 | 16.0 | % | |||||||
Closed Block | 19.5 | 3,091.3 | |||||||||
Corporate | (21.4 | ) | (726.5 | ) | |||||||
Total | $ | 231.3 | $ | 8,187.6 | 11.3 | % | |||||
Three Months Ended September 30, 2015 | |||||||||||
Unum US | $ | 143.8 | $ | 4,237.4 | 13.6 | % | |||||
Unum UK | 26.6 | 674.0 | 15.8 | % | |||||||
Colonial Life | 49.7 | 1,219.4 | 16.3 | % | |||||||
Core Operating Segments | 220.1 | 6,130.8 | 14.4 | % | |||||||
Closed Block | 18.3 | 3,028.5 | |||||||||
Corporate | (15.4 | ) | (1,144.6 | ) | |||||||
Total | $ | 223.0 | $ | 8,014.7 | 11.1 | % |
(1)Excludes net unrealized gain on securities and net gain on cash flow hedges and is calculated using the stockholders' equity balances presented on page 16.4.
16. 2 |
Reconciliation of Non-GAAP Measures - Continued
Annualized | |||||||||||
After-Tax | Average | Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(2) | On Equity | |||||||||
Nine Months Ended September 30, 2016 | |||||||||||
Unum US | $ | 440.7 | $ | 4,012.5 | 14.6 | % | |||||
Unum UK | 91.6 | 624.9 | 19.5 | % | |||||||
Colonial Life | 152.7 | 1,164.6 | 17.5 | % | |||||||
Core Operating Segments | 685.0 | 5,802.0 | 15.7 | % | |||||||
Closed Block | 63.9 | 3,028.0 | |||||||||
Corporate | (55.1 | ) | (677.8 | ) | |||||||
Total | $ | 693.8 | $ | 8,152.2 | 11.3 | % | |||||
Nine Months Ended September 30, 2015 | |||||||||||
Unum US | $ | 417.1 | $ | 4,222.1 | 13.2 | % | |||||
Unum UK | 82.3 | 669.7 | 16.4 | % | |||||||
Colonial Life | 150.6 | 1,200.8 | 16.7 | % | |||||||
Core Operating Segments | 650.0 | 6,092.6 | 14.2 | % | |||||||
Closed Block | 60.4 | 2,929.2 | |||||||||
Corporate | (40.0 | ) | (1,092.8 | ) | |||||||
Total | $ | 670.4 | $ | 7,929.0 | 11.3 | % |
(2)Excludes net unrealized gain on securities and net gain on cash flow hedges and is calculated using the stockholders' equity balances presented on page 16.4. We updated our internal allocation formula used to determine allocated stockholders' equity for certain of our product lines within our operating segments, and, as a result, we are computing the average allocated equity for 2016 using internally allocated equity which was updated effective January 1, 2016. As a result, average equity for the nine months ended September 30, 2016 for certain of our segments will not compute using the historical allocated equity at December 31, 2015. There was no impact on total allocated equity or total average allocated equity.
16. 3
Reconciliation of Non-GAAP Financial Measures - Continued
After-Tax | Average | Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(3) | On Equity | |||||||||
Year Ended December 31, 2015 | |||||||||||
Unum US | $ | 557.5 | $ | 4,197.8 | 13.3 | % | |||||
Unum UK | 116.9 | 650.6 | 18.0 | % | |||||||
Colonial Life | 201.1 | 1,209.4 | 16.6 | % | |||||||
Core Operating Segments | 875.5 | 6,057.8 | 14.5 | % | |||||||
Closed Block | 79.0 | 2,989.2 | |||||||||
Corporate | (53.5 | ) | (1,085.9 | ) | |||||||
Total | $ | 901.0 | $ | 7,961.1 | 11.3 | % | |||||
Year Ended December 31, 2014 | |||||||||||
Unum US | $ | 554.9 | $ | 4,157.4 | 13.3 | % | |||||
Unum UK | 116.4 | 635.3 | 18.3 | % | |||||||
Colonial Life | 194.4 | 1,163.1 | 16.7 | % | |||||||
Core Operating Segments | 865.7 | 5,955.8 | 14.5 | % | |||||||
Closed Block | 79.2 | 2,756.3 | |||||||||
Corporate | (45.8 | ) | (737.8 | ) | |||||||
Total | $ | 899.1 | $ | 7,974.3 | 11.3 | % |
(3)Excludes net unrealized gain on securities and net gain on cash flow hedges and is calculated using the stockholders' equity balances presented below.
Average allocated equity is computed as follows:
9/30/2016 | 6/30/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 12/31/2014 | 12/31/2013 | |||||||||||||||||||||
Total Stockholders' Equity, As Reported | $ | 9,361.2 | $ | 9,157.0 | $ | 8,663.9 | $ | 8,581.1 | $ | 8,515.7 | $ | 8,521.9 | $ | 8,639.9 | |||||||||||||
Excluding: | |||||||||||||||||||||||||||
Net Unrealized Gain on Securities | 803.2 | 661.1 | 204.3 | 158.6 | 112.1 | 290.3 | 135.7 | ||||||||||||||||||||
Net Gain on Cash Flow Hedges | 335.2 | 343.6 | 378.0 | 405.1 | 391.7 | 391.0 | 396.3 | ||||||||||||||||||||
Total Stockholders' Equity, as Adjusted | $ | 8,222.8 | $ | 8,152.3 | $ | 8,081.6 | $ | 8,017.4 | $ | 8,011.9 | $ | 7,840.6 | $ | 8,107.9 | |||||||||||||
Three Months Ended | Nine Months Ended | Twelve Months Ended | Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||||||
9/30/2016 | 12/31/2015 | 9/30/2015 | 12/31/2014 | ||||||||||||||||||||||||
Average Stockholders' Equity Excluding Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | $ | 8,187.6 | $ | 8,152.2 | $ | 7,961.1 | $ | 8,014.7 | $ | 7,929.0 | $ | 7,974.3 |
16. 4
Reconciliation of Non-GAAP Financial Measures - Continued
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | (in millions) | per share * | ||||||||||||||||||||||||
Net Income | $ | 236.0 | $ | 1.01 | $ | 203.8 | $ | 0.83 | $ | 683.4 | $ | 2.88 | $ | 641.0 | $ | 2.57 | |||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $3.7; $(9.3); $1.7; $(17.5)) | 7.3 | 0.03 | (17.3 | ) | (0.07 | ) | (2.5 | ) | (0.02 | ) | (23.6 | ) | (0.10 | ) | |||||||||||||||||
Non-operating Retirement-related Loss (net of tax benefit of $1.5; $1.1; $4.3; $3.1) | (2.6 | ) | (0.01 | ) | (1.9 | ) | (0.01 | ) | (7.9 | ) | (0.03 | ) | (5.8 | ) | (0.02 | ) | |||||||||||||||
After-tax Operating Income | $ | 231.3 | $ | 0.99 | $ | 223.0 | $ | 0.91 | $ | 693.8 | $ | 2.93 | $ | 670.4 | $ | 2.69 |
Year Ended December 31 | |||||||||||||||
2015 | 2014 | ||||||||||||||
(in millions) | per share * | (in millions) | per share * | ||||||||||||
Net Income | $ | 867.1 | $ | 3.50 | $ | 402.1 | $ | 1.57 | |||||||
Excluding: | |||||||||||||||
Net Realized Investment Gain (Loss) (net of tax expense (benefit) of $(17.7); $3.3) | (26.1 | ) | (0.11 | ) | 12.8 | 0.05 | |||||||||
Non-operating Retirement-related Loss (net of tax benefit of $4.1; $24.4) | (7.8 | ) | (0.03 | ) | (45.6 | ) | (0.18 | ) | |||||||
Costs Related to Early Retirement of Debt (net of tax benefit of $-; $2.8) | — | — | (10.4 | ) | (0.04 | ) | |||||||||
Long-term Care Reserve Increase (net of tax benefit of $-; $244.4) | — | — | (453.8 | ) | (1.77 | ) | |||||||||
After-tax Operating Income | $ | 901.0 | $ | 3.64 | $ | 899.1 | $ | 3.51 | |||||||
* Assuming Dilution |
16. 5
September 30 | December 31 | ||||||||||||||
2016 | 2015 | 2015 | 2014 | ||||||||||||
As Adjusted | |||||||||||||||
Debt, As Reported | $ | 3,019.8 | $ | 2,698.2 | $ | 2,801.4 | $ | 2,752.9 | |||||||
Excluding: | |||||||||||||||
Non-recourse Debt | 269.7 | 335.8 | 324.0 | 398.4 | |||||||||||
Debt, As Adjusted | $ | 2,750.1 | $ | 2,362.4 | $ | 2,477.4 | $ | 2,354.5 | |||||||
Total Stockholders' Equity, As Reported | $ | 9,361.2 | $ | 8,581.1 | $ | 8,663.9 | $ | 8,521.9 | |||||||
Excluding: | |||||||||||||||
Net Unrealized Gain on Securities and Net Gain on Cash Flow Hedges | 1,138.4 | 563.7 | 582.3 | 681.3 | |||||||||||
Northwind Capital | 859.8 | 851.3 | 844.6 | 849.9 | |||||||||||
Equity, As Adjusted | 7,363.0 | 7,166.1 | 7,237.0 | 6,990.7 | |||||||||||
Debt, As Adjusted | 2,750.1 | 2,362.4 | 2,477.4 | 2,354.5 | |||||||||||
Total Capital, As Adjusted | $ | 10,113.1 | $ | 9,528.5 | $ | 9,714.4 | $ | 9,345.2 | |||||||
Leverage Ratio | 27.2 | % | 24.8 | % | 25.5 | % | 25.2 | % |
16. 6
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- CIDARA Therapeutics ALERT: Bragar Eagel & Squire, P.C. is Investigating Cidara Therapeutics, Inc. on Behalf of Cidara Therapeutics Stockholders and Encourages Investors to Contact the Firm
- LINCOLN ALERT: Bragar Eagel & Squire, P.C. Announces that a Class Action Lawsuit Has Been Filed Against Lincoln National Corporation and Encourages Investors to Contact the Firm
- Aterian Sets Date for First Quarter 2024 Earnings Announcement & Investor Conference Call
Create E-mail Alert Related Categories
SEC FilingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!