More Related Content Similar to unum group StatSupp_Q305 Similar to unum group StatSupp_Q305 (20) 2. UnumProvident
Statistical Supplement Third Quarter 2005
TABLE OF CONTENTS
(dollars in millions, except share data)
Interim Results are Unaudited
Page
Financial Highlights 1
Consolidated Statements of Operations 2
Financial Sales Data 3
Consolidated Balance Sheets 4
Financial Results by Segment 5
Quarterly Historical Financial Results by Segment 6
Financial Results and Selected Statistics by Segment
U.S. Brokerage 7
Unum Limited 8
Colonial 9
Individual Income Protection - Closed Block 10
Other 11
Corporate 12
Investment Fact Sheets 13
Statutory Capital and Surplus and Results 14
Notes to Statistical Supplement 15
Throughout this supplement, segment operating results exclude income taxes and realized investment gains and losses.
See quot;Notes to Statistical Supplementquot; on page 15 for a discussion of non-GAAP financial measures.
N.M. = not a meaningful percentage
3. UnumProvident Financial Highlights
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Financial Results
Premium Income $ 1,952.2 $ 1,962.3 $ 5,827.2 $ 5,875.3 $ 7,839.6 $ 7,615.7 $ 7,151.1
Segment Operating Revenue $ 2,615.3 $ 2,590.8 $ 7,781.6 $ 7,784.9 $ 10,435.7 $ 10,165.4 $ 9,568.2
Net Realized Investment Gain (Loss) (71.4) 64.5 (9.1) 3.4 29.2 (173.8) (309.1)
Revenue $ 2,543.9 $ 2,655.3 $ 7,772.5 $ 7,788.3 $ 10,464.9 $ 9,991.6 $ 9,259.1
Income (Loss) from Continuing Operations Before Cumulative
Effect of Accounting Principle Change $ 52.6 $ 167.6 $ 376.1 $ (326.7) $ (192.2) $ (264.6) $ 396.9
Income (Loss) from Discontinued Operations, net of tax - - - (60.8) (60.8) (161.7) 11.4
Cumulative Effect of Accounting Principle Change, net of tax - - - - - 39.9 (7.1)
Net Income (Loss) $ 52.6 $ 167.6 $ 376.1 $ (387.5) $ (253.0) $ (386.4) $ 401.2
Assets $ 51,146.9 $ 49,774.1 $ 50,832.3 $ 49,718.3 $ 45,259.5
Stockholders' Equity $ 7,237.7 $ 6,900.4 $ 7,224.1 $ 7,271.0 $ 6,843.2
2005
• Included in the three and nine months of 2005 net income is a charge of $75.0 million before tax, or $51.6 million after tax, related to the settlement agreement with the California
Department of Insurance and related matters.
• Included in the three and nine months of 2005 net income is a gain on the sale of the U.K. Netherlands branch of $5.7 million before tax and $4.0 million after tax.
• Included in the three and nine months of 2005 net income is an income tax benefit of $10.8 million related to the finalization of income tax reviews of the Company's
U.K. subsidiaries.
• In April 2005, the Internal Revenue Service completed its examination of tax years 1999 through 2001 and issued its revenue agent's report (RAR). Income tax liabilities of
$32.0 million that relate primarily to interest on the timing of expense deductions were released in the first quarter of 2005, all of which was reflected as a reduction to
income tax expense.
2004
• Included in the twelve months of 2004 net loss is a charge of $127.0 million before tax, or $87.8 million after tax, related to the settlement of the multistate market conduct
examination.
• Included in the nine months and full year 2004 net loss is a charge of $967.0 million before tax, or $701.0 million after tax, related to the restructuring of the individual income
protection - closed block business.
2003
• Included in the twelve months of 2003 net loss is a charge of $894.0 million before tax, or $581.1 million after tax, related to the U.S. Brokerage group income protection reserve
strengthening.
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
1
4. UnumProvident Financial Highlights
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Per Common Share Information
Assuming Dilution:
Income (Loss) from Continuing Operations Before
Cumulative Effect of Accounting Principle Change $ 0.17 $ 0.55 $ 1.21 $ (1.11) $ (0.65) $ (0.96) $ 1.63
Income (Loss) from Discontinued Operations, net of tax - - - (0.20) (0.21) (0.58) 0.05
Cumulative Effect of Accounting Principle Change, net of tax - - - - - 0.14 (0.03)
Net Income (Loss) $ 0.17 $ 0.55 $ 1.21 $ (1.31) $ (0.86) $ (1.40) $ 1.65
Basic:
Income (Loss) from Continuing Operations Before
Cumulative Effect of Accounting Principle Change $ 0.18 $ 0.57 $ 1.27 $ (1.11) $ (0.65) $ (0.96) $ 1.64
Income (Loss) from Discontinued Operations, net of tax - - - (0.20) (0.21) (0.58) 0.05
Cumulative Effect of Accounting Principle Change, net of tax - - - - - 0.14 (0.03)
Net Income (Loss) $ 0.18 $ 0.57 $ 1.27 $ (1.31) $ (0.86) $ (1.40) $ 1.66
Dividends Paid $ 0.0750 $ 0.0750 $ 0.2250 $ 0.2250 $ 0.3000 $ 0.3725 $ 0.5900
Book Value $ 24.29 $ 23.27 $ 24.36 $ 24.55 $ 28.33
Price (UNM closing price on last trading day of period) $ 20.50 $ 15.69 $ 17.94 $ 15.77 $ 17.54
1.1
5. UnumProvident Consolidated Statements of Operations
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Revenue
Premium Income $ 1,952.2 $ 1,962.3 $ 5,827.2 $ 5,875.3 $ 7,839.6 $ 7,615.7 $ 7,151.1
Net Investment Income 547.2 527.2 1,623.4 1,594.2 2,158.7 2,158.4 2,028.9
Net Realized Investment Gain (Loss) (71.4) 64.5 (9.1) 3.4 29.2 (173.8) (309.1)
Other Income 115.9 101.3 331.0 315.4 437.4 391.3 388.2
Total Revenue 2,543.9 2,655.3 7,772.5 7,788.3 10,464.9 9,991.6 9,259.1
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 1,812.1 1,764.2 5,280.6 5,400.3 7,248.4 7,868.1 6,324.8
Commissions 191.5 207.8 609.4 641.5 842.3 844.1 820.2
Interest and Debt Expense 49.8 53.4 155.5 154.1 207.1 187.2 162.4
Deferral of Policy Acquisition Costs (119.5) (137.9) (402.1) (432.3) (557.3) (665.9) (671.4)
Amortization of Deferred Policy Acquisition Costs 112.5 108.2 349.4 326.4 436.7 458.6 398.9
Amortization of Value of Business Acquired 3.9 4.5 11.9 13.6 15.8 37.5 39.0
Impairment of Intangible Assets - - - 856.4 856.4 - -
Other Operating Expenses 425.3 399.3 1,252.1 1,230.6 1,675.0 1,697.2 1,592.0
Total Benefits and Expenses 2,475.6 2,399.5 7,256.8 8,190.6 10,724.4 10,426.8 8,665.9
Income (Loss) from Continuing Operations Before
Income Taxes and Cumulative Effect of
Accounting Principle Change 68.3 255.8 515.7 (402.3) (259.5) (435.2) 593.2
Income Taxes (Benefit) 15.7 88.2 139.6 (75.6) (67.3) (170.6) 196.3
Income (Loss) from Continuing Operations Before
Cumulative Effect of Accounting
Principle Change 52.6 167.6 376.1 (326.7) (192.2) (264.6) 396.9
Income (Loss) from Discontinued
Operations, net of tax - - - (60.8) (60.8) (161.7) 11.4
Cumulative Effect of Accounting Principle
Change, net of tax - - - - - 39.9 (7.1)
Net Income (Loss) $ 52.6 $ 167.6 $ 376.1 $ (387.5) $ (253.0) $ (386.4) $ 401.2
Average Number of Shares Outstanding
Basic 295,767,170 295,264,952 295,628,573 295,154,633 295,224,305 276,132,176 242,032,884
Dilutive Securities:
Purchase Contracts (see page 15) 16,156,382 6,870,466 12,432,463 - - - -
Options and Other Dilutive Securities 2,724,576 1,493,158 2,398,406 - - - 1,037,230
Assuming Dilution 314,648,128 303,628,576 310,459,442 295,154,633 295,224,305 276,132,176 243,070,114
Actual Number of Shares Outstanding 298,019,247 296,491,489 296,545,913 296,143,422 241,587,260
2
6. UnumProvident Financial Sales Data
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 % Change 9/30/2005 9/30/2004 % Change 12/31/2004 12/31/2003 12/31/2002
U.S. Brokerage Segment
Fully Insured Products
Group Long-term Income Protection $ 27.6 $ 23.8 16.0 % $ 112.3 $ 100.6 11.6 % $ 180.4 $ 299.1 $ 325.2
Group Short-term Income Protection 11.5 8.3 38.6 42.2 50.9 (17.1) 79.5 127.2 129.3
Group Life 23.4 27.7 (15.5) 93.6 96.9 (3.4) 166.5 241.6 274.1
Accidental Death & Dismemberment 1.7 2.1 (19.0) 8.4 8.2 2.4 12.8 26.6 41.1
Individual Income Protection - Recently Issued 13.4 15.4 (13.0) 38.7 47.3 (18.2) 61.6 72.9 83.9
Group Long-term Care 4.3 3.6 19.4 14.7 11.4 28.9 18.7 27.0 23.5
Individual Long-term Care 3.5 4.2 (16.7) 9.9 15.6 (36.5) 19.5 43.9 63.7
Voluntary Workplace Benefits 27.5 23.1 19.0 102.7 87.7 17.1 114.1 105.8 79.1
Total Fully Insured Products 112.9 108.2 4.3 422.5 418.6 0.9 653.1 944.1 1,019.9
Administrative Services Only (ASO) Products
Group Long-term Income Protection 0.9 0.1 N.M. 1.5 0.4 N.M. 1.1 6.5 4.8
Group Short-term Income Protection 0.8 0.9 (11.1) 2.2 3.4 (35.3) 7.3 14.4 20.2
Total ASO Products 1.7 1.0 70.0 3.7 3.8 (2.6) 8.4 20.9 25.0
U.S. Brokerage Segment $ 114.6 $ 109.2 4.9 $ 426.2 $ 422.4 0.9 $ 661.5 $ 965.0 $ 1,044.9
Unum Limited Segment
Group Long-term Income Protection $ 17.1 $ 17.3 (1.2) $ 73.7 $ 78.9 (6.6) $ 103.3 $ 81.5 $ 57.0
Group Life 6.4 19.2 (66.7) 27.2 57.4 (52.6) 68.1 27.7 14.5
Other 1.2 3.0 (60.0) 6.5 7.9 (17.7) 11.1 19.4 22.7
Unum Limited Segment $ 24.7 $ 39.5 (37.5) $ 107.4 $ 144.2 (25.5) $ 182.5 $ 128.6 $ 94.2
Colonial Segment $ 61.9 $ 61.2 1.1 $ 189.1 $ 186.1 1.6 $ 278.5 $ 285.2 $ 257.1
Individual Income Protection - Closed Block Segment $ 1.6 $ 1.9 (15.8) $ 4.8 $ 5.8 (17.2) $ 7.8 $ 12.1 $ 18.6
Total Sales from Continuing Operations $ 202.8 $ 211.8 (4.2) $ 727.5 $ 758.5 (4.1) $ 1,130.3 $ 1,390.9 $ 1,414.8
Sales from Discontinued Operations $ - $ - N.M. $ - $ 10.1 N.M. $ 10.1 $ 36.6 $ 34.5
Total $ 202.8 $ 211.8 (4.2) % $ 727.5 $ 768.6 (5.3) % $ 1,140.4 $ 1,427.5 $ 1,449.3
3
7. UnumProvident Consolidated Balance Sheets
December 31,
September 30,
2005 2004 2003
Assets
Investments
Fixed Maturity Securities Available-for-Sale
Continuing $ 34,532.7 $ 32,488.4 $ 30,084.2
Discontinued - - 1,102.4
Total Fixed Maturity Securities Available-for-Sale 34,532.7 32,488.4 31,186.6
Equity Securities 12.9 12.9 39.1
Mortgage Loans 661.1 498.2 474.7
Real Estate 18.2 27.4 25.9
Policy Loans 3,074.4 3,073.6 2,877.9
Other Long-term Investments 75.1 77.0 91.9
Short-term Investments 311.1 410.2 332.2
Total Investments 38,685.5 36,587.7 35,028.3
Cash and Bank Deposits 63.7 130.7 119.2
Reinsurance Receivable 5,511.4 6,969.2 6,242.6
Accrued Investment Income 649.5 588.3 543.6
Deferred Policy Acquisition Costs 2,913.6 2,882.5 3,051.9
Value of Business Acquired 83.2 101.5 463.5
Goodwill 273.3 271.1 476.7
Other Discontinued Assets - - 330.2
Other Assets 2,936.0 3,269.6 3,429.8
Separate Account Assets 30.7 31.7 32.5
Total Assets $ 51,146.9 $ 50,832.3 $ 49,718.3
Liabilities
Policy and Contract Benefits $ 1,722.5 $ 1,841.6 $ 1,763.6
Reserves for Future Policy and Contract Benefits 34,125.2 33,224.8 31,139.2
Unearned Premiums 549.7 500.8 456.7
Other Policyholders' Funds 2,275.1 2,425.3 2,493.3
Income Tax 967.0 1,060.9 946.8
Short-term Debt - 227.0 -
Long-term Debt 2,862.0 2,862.0 2,789.0
Other Discontinued Liabilities - - 1,462.6
Other Liabilities 1,377.0 1,434.1 1,363.6
Separate Account Liabilities 30.7 31.7 32.5
Total Liabilities 43,909.2 43,608.2 42,447.3
Stockholders' Equity
Common Stock 30.0 29.8 29.8
Additional Paid-in Capital 1,617.5 1,588.4 1,609.1
Retained Earnings 4,495.1 4,185.5 4,526.9
Accumulated Other Comprehensive Income 1,167.0 1,481.1 1,171.2
Treasury Stock (54.2) (54.2) (54.2)
Deferred Compensation (17.7) (6.5) (11.8)
Total Stockholders' Equity 7,237.7 7,224.1 7,271.0
Total Liabilities and Stockholders' Equity $ 51,146.9 $ 50,832.3 $ 49,718.3
4
8. UnumProvident Segment Deferred Policy Acquisition Cost
Individual
Income
U.S. Unum Protection - Corporate
Brokerage Limited Colonial Closed Block and Other Consolidated
Balances at December 31, 2002 $ 1,965.8 $ 107.0 $ 440.6 $ 318.3 $ 0.8 $ 2,832.5
Capitalized 458.8 33.6 166.1 7.5 (0.1) 665.9
Amortized (282.0) (17.0) (118.3) (41.3) - (458.6)
Foreign Currency and Other (0.5) 14.7 - (2.3) 0.2 12.1
Balances at December 31, 2003 2,142.1 138.3 488.4 282.2 0.9 3,051.9
Capitalized 346.0 37.7 173.7 - (0.1) 557.3
Amortized (286.3) (19.2) (131.2) - - (436.7)
Impairment - - - (282.2) - (282.2)
Foreign Currency and Other (5.6) (1.9) - - (0.3) (7.8)
Balances at December 31, 2004 2,196.2 154.9 530.9 - 0.5 2,882.5
Capitalized 244.2 26.8 131.1 - - 402.1
Amortized (233.2) (16.0) (100.2) - - (349.4)
Foreign Currency and Other - (21.6) - - - (21.6)
Balances at September 30, 2005 $ 2,207.2 $ 144.1 $ 561.8 $ - $ 0.5 $ 2,913.6
4.1
9. UnumProvident Segment Balance Sheets - September 30, 2005
U.S. Brokerage
Group Life Individual
Group and Accidental Supplemental Total Income
Income Death & and U.S. Unum Protection - Corporate
Protection Dismemberment Voluntary Brokerage Limited Colonial Closed Block and Other Consolidated
Assets
Investments $ 9,442.9 $ 2,404.2 $ 4,253.6 $ 16,100.7 $ 2,834.3 $ 1,591.4 $ 12,489.9 $ 5,669.2 $ 38,685.5
Deferred Policy Acquisition Costs 604.4 312.5 1,290.3 2,207.2 144.1 561.8 - 0.5 2,913.6
Value of Business Acquired - - 2.7 2.7 64.7 15.8 - - 83.2
Goodwill 2.5 - 187.5 190.0 12.7 - - 70.6 273.3
All Other 865.3 186.9 415.5 1,467.7 395.0 17.6 3,269.5 4,041.5 9,191.3
Total Assets $ 10,915.1 $ 2,903.6 $ 6,149.6 $ 19,968.3 $ 3,450.8 $ 2,186.6 $ 15,759.4 $ 9,781.8 $ 51,146.9
Liabilities
Reserves and Policyholder Benefits $ 8,453.0 $ 1,613.7 $ 3,785.5 $ 13,852.2 $ 2,408.5 $ 1,254.0 $ 12,659.6 $ 8,498.2 $ 38,672.5
Debt - - - - - - - 2,862.0 2,862.0
All Other 427.4 138.3 489.8 1,055.5 272.8 132.6 241.9 671.9 2,374.7
Total Liabilities 8,880.4 1,752.0 4,275.3 14,907.7 2,681.3 1,386.6 12,901.5 12,032.1 43,909.2
Other Allocated Stockholders' Equity 1,930.7 1,098.1 1,456.6 4,485.4 686.1 741.5 2,401.9 (2,367.4) 5,947.5
Unrealized Gain/Loss on Securities 104.0 53.5 417.7 575.2 83.4 58.5 456.0 117.1 1,290.2
Total Allocated Stockholders'
Equity 2,034.7 1,151.6 1,874.3 5,060.6 769.5 800.0 2,857.9 (2,250.3) 7,237.7
Total Liabilities and Allocated
Stockholders' Equity $ 10,915.1 $ 2,903.6 $ 6,149.6 $ 19,968.3 $ 3,450.8 $ 2,186.6 $ 15,759.4 $ 9,781.8 $ 51,146.9
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns
with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements.
4.2
10. UnumProvident Segment Balance Sheets - December 31, 2004
U.S. Brokerage
Group Life Individual
Group and Accidental Supplemental Total Income
Income Death & and U.S. Unum Protection - Corporate
Protection Dismemberment Voluntary Brokerage Limited Colonial Closed Block and Other Consolidated
Assets
Investments $ 9,178.9 $ 2,655.4 $ 3,643.2 $ 15,477.5 $ 2,713.7 $ 1,499.6 $ 11,068.9 $ 5,828.0 $ 36,587.7
Deferred Policy Acquisition Costs 621.4 330.8 1,244.0 2,196.2 154.9 530.9 - 0.5 2,882.5
Value of Business Acquired - - 3.0 3.0 81.8 16.7 - - 101.5
Goodwill 2.5 - 187.5 190.0 13.5 - - 67.6 271.1
All Other 1,043.2 92.9 489.4 1,625.5 400.9 64.0 4,922.5 3,976.6 10,989.5
Total Assets $ 10,846.0 $ 3,079.1 $ 5,567.1 $ 19,492.2 $ 3,364.8 $ 2,111.2 $ 15,991.4 $ 9,872.7 $ 50,832.3
Liabilities
Reserves and Policyholder Benefits $ 8,043.2 $ 1,714.0 $ 3,341.4 $ 13,098.6 $ 2,408.5 $ 1,191.0 $ 12,736.8 $ 8,557.6 $ 37,992.5
Debt - - - - - - - 3,089.0 3,089.0
All Other 497.3 131.6 426.3 1,055.2 238.1 131.5 379.4 722.5 2,526.7
Total Liabilities 8,540.5 1,845.6 3,767.7 14,153.8 2,646.6 1,322.5 13,116.2 12,369.1 43,608.2
Other Allocated Stockholders' Equity 1,984.6 1,184.1 1,445.3 4,614.0 647.4 720.5 2,309.6 (2,614.1) 5,677.4
Unrealized Gain/Loss on Securities 320.9 49.4 354.1 724.4 70.8 68.2 565.6 117.7 1,546.7
Total Allocated Stockholders'
Equity 2,305.5 1,233.5 1,799.4 5,338.4 718.2 788.7 2,875.2 (2,496.4) 7,224.1
Total Liabilities and Allocated
Stockholders' Equity $ 10,846.0 $ 3,079.1 $ 5,567.1 $ 19,492.2 $ 3,364.8 $ 2,111.2 $ 15,991.4 $ 9,872.7 $ 50,832.3
4.3
11. UnumProvident Financial Results by Segment
Three Months Ended Nine Months Ended
9/30/2005 9/30/2004 % Change 9/30/2005 9/30/2004 % Change
Premium Income
U.S. Brokerage $ 1,293.5 $ 1,348.4 (4.1) % $ 3,920.0 $ 4,072.3 (3.7) %
Unum Limited 204.0 170.1 19.9 587.1 482.1 21.8
Colonial 197.4 186.4 5.9 586.5 551.5 6.3
Individual Income Protection - Closed Block 257.6 246.8 4.4 732.4 747.3 (2.0)
Other (0.3) 10.6 (102.8) 1.2 22.1 (94.6)
1,952.2 1,962.3 (0.5) 5,827.2 5,875.3 (0.8)
Net Investment Income
U.S. Brokerage 248.4 237.1 4.8 742.8 704.9 5.4
Unum Limited 39.2 35.3 11.0 116.5 102.2 14.0
Colonial 23.4 23.5 (0.4) 71.7 70.0 2.4
Individual Income Protection - Closed Block 192.9 192.6 0.2 562.5 595.5 (5.5)
Other 29.5 32.1 (8.1) 91.4 96.3 (5.1)
Corporate 13.8 6.6 109.1 38.5 25.3 52.2
547.2 527.2 3.8 1,623.4 1,594.2 1.8
Other Income
U.S. Brokerage 27.8 22.8 21.9 80.0 66.6 20.1
Unum Limited 5.7 0.5 N.M. 6.1 2.6 134.6
Colonial 1.3 0.7 85.7 3.5 1.7 105.9
Individual Income Protection - Closed Block 25.7 21.1 21.8 70.2 69.1 1.6
Other 52.3 52.4 (0.2) 158.8 161.1 (1.4)
Corporate 3.1 3.8 (18.4) 12.4 14.3 (13.3)
115.9 101.3 14.4 331.0 315.4 4.9
Total Operating Revenue
U.S. Brokerage 1,569.7 1,608.3 (2.4) 4,742.8 4,843.8 (2.1)
Unum Limited 248.9 205.9 20.9 709.7 586.9 20.9
Colonial 222.1 210.6 5.5 661.7 623.2 6.2
Individual Income Protection - Closed Block 476.2 460.5 3.4 1,365.1 1,411.9 (3.3)
Other 81.5 95.1 (14.3) 251.4 279.5 (10.1)
Corporate 16.9 10.4 62.5 50.9 39.6 28.5
2,615.3 2,590.8 0.9 7,781.6 7,784.9 -
5
12. UnumProvident Financial Results by Segment
Three Months Ended Nine Months Ended
9/30/2005 9/30/2004 % Change 9/30/2005 9/30/2004 % Change
Benefits and Expenses
U.S. Brokerage $ 1,497.8 $ 1,494.8 0.2 % $ 4,459.0 $ 4,524.0 (1.4) %
Unum Limited 199.1 167.8 18.7 571.3 482.3 18.5
Colonial 180.1 171.0 5.3 532.3 507.6 4.9
Individual Income Protection - Closed Block 480.8 427.3 12.5 1,318.9 2,272.5 (42.0)
Other 67.9 83.4 (18.6) 214.6 242.4 (11.5)
Corporate 49.9 55.2 (9.6) 160.7 161.8 (0.7)
2,475.6 2,399.5 3.2 7,256.8 8,190.6 (11.4)
Income (Loss) from Continuing Operations
Before Income Taxes and Net Realized
Investment Gain (Loss)
U.S. Brokerage 71.9 113.5 (36.7) 283.8 319.8 (11.3)
Unum Limited 49.8 38.1 30.7 138.4 104.6 32.3
Colonial 42.0 39.6 6.1 129.4 115.6 11.9
Individual Income Protection - Closed Block (4.6) 33.2 (113.9) 46.2 (860.6) 105.4
Other 13.6 11.7 16.2 36.8 37.1 (0.8)
Corporate (33.0) (44.8) 26.3 (109.8) (122.2) 10.1
139.7 191.3 (27.0) 524.8 (405.7) 229.4
Income Taxes (Benefit) 40.8 65.5 (37.7) 142.9 (77.0) N.M.
Income (Loss) from Continuing Operations
Before Net Realized Investment Gain (Loss) 98.9 125.8 (21.4) 381.9 (328.7) 216.2
Net Realized Investment Gain (Loss) (71.4) 64.5 (210.7) (9.1) 3.4 N.M.
Tax Expense (Benefit) on Net Realized
Investment Gain (Loss) (25.1) 22.7 (210.6) (3.3) 1.4 N.M.
Loss from Discontinued
Operations, net of tax - - N.M. - (60.8) N.M.
Net Income (Loss) $ 52.6 $ 167.6 (68.6) % $ 376.1 $ (387.5) 197.1 %
Note: See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
5.1
13. UnumProvident Quarterly Historical Financial Results by Segment
9/30/05 6/30/05 3/31/05 12/31/04 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03
Premium Income
U.S. Brokerage $ 1,293.5 $ 1,317.3 $ 1,309.2 $ 1,349.3 $ 1,348.4 $ 1,359.5 $ 1,364.4 $ 1,355.5 $ 1,356.3
Unum Limited 204.0 193.1 190.0 177.0 170.1 161.2 150.8 134.1 119.9
Colonial 197.4 195.6 193.5 189.5 186.4 184.0 181.1 177.2 174.0
Individual Income Protection - Closed Block 257.6 232.8 242.0 239.3 246.8 249.2 251.3 237.4 262.1
Other (0.3) 1.2 0.3 9.2 10.6 2.9 8.6 7.7 9.0
1,952.2 1,940.0 1,935.0 1,964.3 1,962.3 1,956.8 1,956.2 1,911.9 1,921.3
Net Investment Income
U.S. Brokerage 248.4 250.4 244.0 260.9 237.1 238.1 229.7 239.3 258.1
Unum Limited 39.2 39.6 37.7 37.4 35.3 34.5 32.4 28.9 26.3
Colonial 23.4 23.3 25.0 24.5 23.5 23.7 22.8 25.2 22.9
Individual Income Protection - Closed Block 192.9 189.7 179.9 203.6 192.6 189.9 213.0 211.0 208.0
Other 29.5 32.8 29.1 31.0 32.1 32.2 32.0 33.3 32.2
Corporate 13.8 12.4 12.3 7.1 6.6 14.5 4.2 11.1 7.8
547.2 548.2 528.0 564.5 527.2 532.9 534.1 548.8 555.3
Other Income
U.S. Brokerage 27.8 25.2 27.0 23.2 22.8 21.7 22.1 22.2 19.2
Unum Limited 5.7 (0.1) 0.5 0.5 0.5 0.8 1.3 1.7 2.4
Colonial 1.3 1.0 1.2 0.6 0.7 0.7 0.3 0.4 0.4
Individual Income Protection - Closed Block 25.7 19.8 24.7 31.2 21.1 20.2 27.8 18.8 30.2
Other 52.3 52.9 53.6 47.2 52.4 52.5 56.2 45.3 52.8
Corporate 3.1 4.2 5.1 19.3 3.8 10.2 0.3 (1.4) 0.5
115.9 103.0 112.1 122.0 101.3 106.1 108.0 87.0 105.5
Total Operating Revenue
U.S. Brokerage 1,569.7 1,592.9 1,580.2 1,633.4 1,608.3 1,619.3 1,616.2 1,617.0 1,633.6
Unum Limited 248.9 232.6 228.2 214.9 205.9 196.5 184.5 164.7 148.6
Colonial 222.1 219.9 219.7 214.6 210.6 208.4 204.2 202.8 197.3
Individual Income Protection - Closed Block 476.2 442.3 446.6 474.1 460.5 459.3 492.1 467.2 500.3
Other 81.5 86.9 83.0 87.4 95.1 87.6 96.8 86.3 94.0
Corporate 16.9 16.6 17.4 26.4 10.4 24.7 4.5 9.7 8.3
2,615.3 2,591.2 2,575.1 2,650.8 2,590.8 2,595.8 2,598.3 2,547.7 2,582.1
6
14. UnumProvident Quarterly Historical Financial Results by Segment
9/30/05 6/30/05 3/31/05 12/31/04 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03
Benefits and Expenses
U.S. Brokerage $ 1,497.8 $ 1,481.5 $ 1,479.7 $ 1,617.7 $ 1,494.8 $ 1,505.7 $ 1,523.5 $ 1,958.6 $ 1,511.1
Unum Limited 199.1 191.3 180.9 168.2 167.8 164.8 149.7 132.6 121.0
Colonial 180.1 176.3 175.9 174.6 171.0 169.0 167.6 165.2 158.8
Individual Income Protection - Closed Block 480.8 414.6 423.5 436.3 427.3 429.3 1,415.9 445.0 481.1
Other 67.9 73.0 73.7 79.1 83.4 73.0 86.0 84.4 81.0
Corporate 49.9 54.2 56.6 57.9 55.2 55.4 51.2 56.3 55.6
2,475.6 2,390.9 2,390.3 2,533.8 2,399.5 2,397.2 3,393.9 2,842.1 2,408.6
Income (Loss) from Continuing
Operations Before Income Taxes,
Net Realized Investment Gain (Loss),
and Cumulative Effect of Accounting
Principle Change
U.S. Brokerage 71.9 111.4 100.5 15.7 113.5 113.6 92.7 (341.6) 122.5
Unum Limited 49.8 41.3 47.3 46.7 38.1 31.7 34.8 32.1 27.6
Colonial 42.0 43.6 43.8 40.0 39.6 39.4 36.6 37.6 38.5
Individual Income Protection - Closed Block (4.6) 27.7 23.1 37.8 33.2 30.0 (923.8) 22.2 19.2
Other 13.6 13.9 9.3 8.3 11.7 14.6 10.8 1.9 13.0
Corporate (33.0) (37.6) (39.2) (31.5) (44.8) (30.7) (46.7) (46.6) (47.3)
139.7 200.3 184.8 117.0 191.3 198.6 (795.6) (294.4) 173.5
Income Taxes (Benefit) 40.8 71.6 30.5 (0.7) 65.5 67.7 (210.2) (110.3) 58.7
Income (Loss) from Continuing
Operations Before Net Realized
Investment Gain (Loss) and Cumulative
Effect of Accounting Principle Change 98.9 128.7 154.3 117.7 125.8 130.9 (585.4) (184.1) 114.8
Net Realized Investment Gain (Loss) (71.4) 65.5 (3.2) 25.8 64.5 (86.5) 25.4 (36.4) (25.8)
Tax Expense (Benefit) on Net Realized
Investment Gain (Loss) (25.1) 22.9 (1.1) 9.0 22.7 (30.6) 9.3 (12.5) (9.3)
Income (Loss) from Discontinued
Operations, net of tax - - - - - (67.8) 7.0 (179.1) 10.4
Cumulative Effect of Accounting
Principle Change, net of tax - - - - - - - 39.9 -
Net Income (Loss) $ 52.6 $ 171.3 $ 152.2 $ 134.5 $ 167.6 $ 7.2 $ (562.3) $ (347.2) $ 108.7
Per Common Share - Assuming Dilution
Income (Loss) from Continuing Operations
Before Cumulative Effect of Accounting
Principle Change $ 0.17 $ 0.55 $ 0.49 $ 0.45 $ 0.55 $ 0.25 $ (1.93) $ (0.71) $ 0.33
Income (Loss) from Discontinued
Operations, net of tax - - - - - (0.23) 0.02 (0.61) 0.03
Cumulative Effect of Accounting Principle
Change, net of tax - - - - - - - 0.14 -
Net Income (Loss) $ 0.17 $ 0.55 $ 0.49 $ 0.45 $ 0.55 $ 0.02 $ (1.91) $ (1.18) $ 0.36
Note: See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
6.1
15. UnumProvident Financial Results for U.S. Brokerage Segment
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income $ 1,293.5 $ 1,348.4 $ 3,920.0 $ 4,072.3 $ 5,421.6 $ 5,382.4 $ 5,056.7
Net Investment Income 248.4 237.1 742.8 704.9 965.8 974.0 895.1
Other Income 27.8 22.8 80.0 66.6 89.8 70.6 46.6
Total Operating Revenue 1,569.7 1,608.3 4,742.8 4,843.8 6,477.2 6,427.0 5,998.4
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 1,114.3 1,131.0 3,313.6 3,402.7 4,614.4 5,437.5 4,031.5
Commissions 115.2 131.3 385.8 409.7 538.3 548.8 535.1
Deferral of Policy Acquisition Costs (69.7) (84.4) (244.2) (270.8) (346.0) (458.8) (481.0)
Amortization of Deferred Policy Acquisition Costs 75.7 70.9 233.2 214.8 286.3 282.0 242.1
Amortization of Value of Business Acquired 0.1 - 0.2 0.1 0.2 0.3 0.3
Operating Expenses 262.2 246.0 770.4 767.5 1,048.5 1,048.4 967.4
Total Benefits and Expenses 1,497.8 1,494.8 4,459.0 4,524.0 6,141.7 6,858.2 5,295.4
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses $ 71.9 $ 113.5 $ 283.8 $ 319.8 $ 335.5 $ (431.2) $ 703.0
Operating Ratios
Benefit Ratio 86.1 % 83.9 % 84.5 % 83.6 % 85.1 % 101.0 % 79.7 %
Operating Expense Ratio 20.3 % 18.2 % 19.7 % 18.8 % 19.3 % 19.5 % 19.1 %
Before-tax Profit (Loss) Margin 5.6 % 8.4 % 7.2 % 7.9 % 6.2 % (8.0)% 13.9 %
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses, as Reported $ 71.9 $ 113.5 $ 283.8 $ 319.8 $ 335.5 $ (431.2) $ 703.0
California Settlement Agreement and Related Matters -
Reserve Charges (29.6) - (29.6) - - - -
California Settlement Agreement and Related Matters -
Operating Expense Charges (11.1) - (11.1) - - - -
Multistate Market Conduct Examination Settlement Agreements -
Reserve Charges - - - - (80.8) - -
Multistate Market Conduct Examination Settlement Agreements -
Operating Expense Charges - - - - (37.6) - -
Reserve Strengthening - - - - - (894.0) -
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Adjusted $ 112.6 $ 113.5 $ 324.5 $ 319.8 $ 453.9 $ 462.8 $ 703.0
Operating Ratios, as Adjusted
Benefit Ratio 83.9 % 83.9 % 83.8 % 83.6 % 83.6 % 84.4 % 79.7 %
Operating Expense Ratio 19.4 % 18.2 % 19.4 % 18.8 % 18.6 % 19.5 % 19.1 %
Before-tax Profit Margin 8.7 % 8.4 % 8.3 % 7.9 % 8.4 % 8.6 % 13.9 %
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
7
16. UnumProvident Financial Results for U.S. Brokerage Group Income Protection
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income
Group Long-term Income Protection $ 486.0 $ 506.6 $ 1,468.4 $ 1,523.9 $ 2,028.6 $ 2,031.7 $ 1,946.2
Group Short-term Income Protection 140.0 151.6 429.8 464.6 616.1 630.9 601.6
Total Premium Income 626.0 658.2 1,898.2 1,988.5 2,644.7 2,662.6 2,547.8
Net Investment Income 151.9 147.2 453.4 439.7 595.8 609.7 568.3
Other Income 20.2 17.7 59.0 52.4 69.6 56.4 33.9
Total Operating Revenue 798.1 823.1 2,410.6 2,480.6 3,310.1 3,328.7 3,150.0
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 606.0 611.7 1,806.6 1,845.8 2,533.1 3,412.1 2,148.5
Commissions 39.0 49.4 135.0 152.1 199.0 200.1 205.6
Deferral of Policy Acquisition Costs (13.1) (20.6) (51.8) (60.7) (77.1) (125.1) (131.1)
Amortization of Deferred Policy Acquisition Costs 22.6 23.1 68.7 69.4 93.5 96.1 89.3
Amortization of Value of Business Acquired - - - - - - -
Operating Expenses 149.8 142.8 434.7 443.4 619.6 615.5 547.8
Total Benefits and Expenses 804.3 806.4 2,393.2 2,450.0 3,368.1 4,198.7 2,860.1
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses $ (6.2) $ 16.7 $ 17.4 $ 30.6 $ (58.0) $ (870.0) $ 289.9
Operating Ratios
Benefit Ratio 96.8 % 92.9 % 95.2 % 92.8 % 95.8 % 128.1 % 84.3 %
Operating Expense Ratio 23.9 % 21.7 % 22.9 % 22.3 % 23.4 % 23.1 % 21.5 %
Before-tax Profit (Loss) Margin (1.0)% 2.5 % 0.9 % 1.5 % (2.2)% (32.7)% 11.4 %
Persistency - Group Long-term Income Protection 84.4 % 84.6 % 84.8 % 87.2 % 86.5 %
Persistency - Group Short-term Income Protection 79.3 % 80.2 % 80.6 % 84.5 % 81.5 %
7.1
17. UnumProvident Financial Results for U.S. Brokerage Group Income Protection - Continued
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses, as Reported $ (6.2) $ 16.7 $ 17.4 $ 30.6 $ (58.0) $ (870.0) $ 289.9
California Settlement Agreement and Related Matters -
Reserve Charges (27.3) - (27.3) - - - -
California Settlement Agreement and Related Matters -
Operating Expense Charges (10.1) - (10.1) - - - -
Multistate Market Conduct Examination Settlement Agreements -
Reserve Charges - - - - (80.2) - -
Multistate Market Conduct Examination Settlement Agreements -
Operating Expense Charges - - - - (36.5) - -
Reserve Strengthening - - - - - (894.0) -
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Adjusted $ 31.2 $ 16.7 $ 54.8 $ 30.6 $ 58.7 $ 24.0 $ 289.9
Operating Ratios, as Adjusted
Benefit Ratio 92.4 % 92.9 % 93.7 % 92.8 % 92.7 % 94.6 % 84.3 %
Operating Expense Ratio 22.3 % 21.7 % 22.4 % 22.3 % 22.0 % 23.1 % 21.5 %
Before-tax Profit Margin 5.0 % 2.5 % 2.9 % 1.5 % 2.2 % 0.9 % 11.4 %
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
7.2
18. UnumProvident Financial Results for U.S. Brokerage Group Life and Accidental Death and Dismemberment
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income
Group Life $ 318.3 $ 353.0 $ 980.5 $ 1,086.1 $ 1,441.0 $ 1,463.8 $ 1,406.5
Accidental Death & Dismemberment 37.6 45.3 116.6 137.9 182.4 198.6 199.8
Total Premium Income 355.9 398.3 1,097.1 1,224.0 1,623.4 1,662.4 1,606.3
Net Investment Income 36.2 37.1 114.2 103.3 147.9 145.0 152.4
Other Income (Loss) 1.4 (0.2) 1.7 (0.4) (0.6) 0.5 2.6
Total Operating Revenue 393.5 435.2 1,213.0 1,326.9 1,770.7 1,807.9 1,761.3
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 272.6 305.4 832.1 942.5 1,244.3 1,280.0 1,247.9
Commissions 20.7 25.3 76.9 79.9 106.2 113.2 115.9
Deferral of Policy Acquisition Costs (7.1) (11.4) (36.6) (37.9) (47.0) (80.0) (90.9)
Amortization of Deferred Policy Acquisition Costs 18.5 16.7 54.9 50.4 67.0 71.9 61.7
Amortization of Value of Business Acquired - - - - - - -
Operating Expenses 46.9 44.6 140.4 140.7 186.8 200.1 202.6
Total Benefits and Expenses 351.6 380.6 1,067.7 1,175.6 1,557.3 1,585.2 1,537.2
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses $ 41.9 $ 54.6 $ 145.3 $ 151.3 $ 213.4 $ 222.7 $ 224.1
Operating Ratios
Benefit Ratio 76.6% 76.7% 75.8% 77.0% 76.6% 77.0% 77.7%
Operating Expense Ratio 13.2% 11.2% 12.8% 11.5% 11.5% 12.0% 12.6%
Before-tax Profit Margin 11.8% 13.7% 13.2% 12.4% 13.1% 13.4% 14.0%
Persistency - Group Life 77.3% 83.6% 84.0% 83.2% 83.9%
Persistency - Accidental Death & Dismemberment 76.3% 80.7% 80.3% 84.2% 82.5%
7.3
19. UnumProvident Financial Results for U.S. Brokerage Supplemental and Voluntary
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income
Individual Income Protection - Recently Issued $ 106.8 $ 105.7 $ 321.5 $ 312.1 $ 415.6 $ 392.8 $ 357.8
Long-term Care 119.1 112.5 351.0 330.1 444.5 404.6 335.8
Voluntary Workplace Benefits 85.7 73.7 252.2 217.6 293.4 260.0 209.0
Total Premium Income 311.6 291.9 924.7 859.8 1,153.5 1,057.4 902.6
Net Investment Income 60.3 52.8 175.2 161.9 222.1 219.3 174.4
Other Income 6.2 5.3 19.3 14.6 20.8 13.7 10.1
Total Operating Revenue 378.1 350.0 1,119.2 1,036.3 1,396.4 1,290.4 1,087.1
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 235.7 213.9 674.9 614.4 837.0 745.4 635.1
Commissions 55.5 56.6 173.9 177.7 233.1 235.5 213.6
Deferral of Policy Acquisition Costs (49.5) (52.4) (155.8) (172.2) (221.9) (253.7) (259.0)
Amortization of Deferred Policy Acquisition Costs 34.6 31.1 109.6 95.0 125.8 114.0 91.1
Amortization of Value of Business Acquired 0.1 - 0.2 0.1 0.2 0.3 0.3
Operating Expenses 65.5 58.6 195.3 183.4 242.1 232.8 217.0
Total Benefits and Expenses 341.9 307.8 998.1 898.4 1,216.3 1,074.3 898.1
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses $ 36.2 $ 42.2 $ 121.1 $ 137.9 $ 180.1 $ 216.1 $ 189.0
Operating Ratios
Benefit Ratios
Individual Income Protection - Recently Issued 60.2 % 59.7 % 57.3 % 55.4 % 57.7 % 54.6 % 54.2 %
Long-term Care 95.3 % 89.7 % 92.3 % 88.2 % 88.8 % 84.7 % 82.8 %
Voluntary Workplace Benefits 67.6 % 67.7 % 66.1 % 69.2 % 69.0 % 72.5 % 77.9 %
Operating Expense Ratio 21.0 % 20.1 % 21.1 % 21.3 % 21.0 % 22.0 % 24.0 %
Before-tax Profit Margin 11.6 % 14.5 % 13.1 % 16.0 % 15.6 % 20.4 % 20.9 %
Interest Adjusted Loss Ratio
Individual Income Protection - Recently Issued 44.8 % 48.1 % 43.8 % 44.0 % 46.0 % 41.5 % 39.9 %
7.4
20. UnumProvident Financial Results for U.S. Brokerage Supplemental and Voluntary - Continued
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Persistency - Individual Income Protection - Recently Issued 89.4 % 90.1 % 90.7 % 89.6 % 89.7 %
Persistency - Long-term Care 95.6 % 95.3 % 95.5 % 95.0 % 95.3 %
Persistency - Voluntary Workplace Benefits 80.7 % 80.8 % 81.0 % 82.1 % 82.4 %
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Reported $ 36.2 $ 42.2 $ 121.1 $ 137.9 $ 180.1 $ 216.1 $ 189.0
California Settlement Agreement and Related Matters -
Reserve Charges (2.3) - (2.3) - - - -
California Settlement Agreement and Related Matters -
Operating Expense Charges (1.0) - (1.0) - - - -
Multistate Market Conduct Examination Settlement Agreements -
Reserve Charges - - - - (0.6) - -
Multistate Market Conduct Examination Settlement Agreements -
Operating Expense Charges - - - - (1.1) - -
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Adjusted $ 39.5 $ 42.2 $ 124.4 $ 137.9 $ 181.8 $ 216.1 $ 189.0
Operating Ratios, as Adjusted
Benefit Ratios
Individual Income Protection - Recently Issued 58.1 % 59.7 % 56.6 % 55.4 % 57.6 % 54.6 % 54.2 %
Long-term Care 95.3 % 89.7 % 92.3 % 88.2 % 88.8 % 84.7 % 82.8 %
Voluntary Workplace Benefits 67.6 % 67.7 % 66.1 % 69.2 % 69.0 % 72.5 % 77.9 %
Operating Expense Ratio 20.7 % 20.1 % 21.0 % 21.3 % 20.9 % 22.0 % 24.0 %
Before-tax Profit Margin 12.7 % 14.5 % 13.5 % 16.0 % 15.8 % 20.4 % 20.9 %
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
7.5
21. UnumProvident Financial Results for Unum Limited Segment
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income
Group Long-term Income Protection $ 152.4 $ 129.3 $ 433.4 $ 372.3 $ 501.8 $ 371.2 $ 262.8
Group Life 43.9 30.8 123.0 81.4 117.9 60.8 18.0
Other 7.7 10.0 30.7 28.4 39.4 45.0 33.0
Total Premium Income 204.0 170.1 587.1 482.1 659.1 477.0 313.8
Net Investment Income 39.2 35.3 116.5 102.2 139.6 106.5 80.6
Other Income 5.7 0.5 6.1 2.6 3.1 9.9 8.8
Total Operating Revenue 248.9 205.9 709.7 586.9 801.8 593.4 403.2
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 146.1 120.2 415.9 347.0 464.5 344.5 230.8
Commissions 14.5 13.1 41.0 35.6 48.9 34.1 28.9
Deferral of Policy Acquisition Costs (8.0) (10.5) (26.8) (29.1) (37.7) (33.6) (28.6)
Amortization of Deferred Policy Acquisition Costs 5.2 5.1 16.0 14.2 19.2 17.0 12.8
Amortization of Value of Business Acquired 3.5 4.2 10.8 12.6 14.4 5.4 2.3
Operating Expenses 37.8 35.7 114.4 102.0 141.2 114.0 87.5
Total Benefits and Expenses 199.1 167.8 571.3 482.3 650.5 481.4 333.7
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses $ 49.8 $ 38.1 $ 138.4 $ 104.6 $ 151.3 $ 112.0 $ 69.5
Operating Ratios
Benefit Ratio 71.6 % 70.7 % 70.8 % 72.0 % 70.5 % 72.2 % 73.6 %
Operating Expense Ratio 18.5 % 21.0 % 19.5 % 21.2 % 21.4 % 23.9 % 27.9 %
Before-tax Profit Margin 24.4 % 22.4 % 23.6 % 21.7 % 23.0 % 23.5 % 22.1 %
Persistency - Group Long-term Income Protection 94.7 % 92.0 % 92.2 % 92.9 % 92.2 %
Persistency - Group Life 90.0 % 83.2 % 83.0 % 87.7 % 82.2 %
Persistency - Other 94.3 % 91.6 % 91.7 % 92.4 % 89.9 %
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Reported $ 49.8 $ 38.1 $ 138.4 $ 104.6 $ 151.3 $ 112.0 $ 69.5
Gain on Sale of Netherlands Branch 5.7 - 5.7 - - - -
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Adjusted $ 44.1 $ 38.1 $ 132.7 $ 104.6 $ 151.3 $ 112.0 $ 69.5
Operating Ratio, as Adjusted
Before-tax Profit Margin 21.6 % 22.4 % 22.6 % 21.7 % 23.0 % 23.5 % 22.1 %
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
8
22. UnumProvident Financial Results for Colonial Segment
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income
Income Protection $ 127.7 $ 122.5 $ 379.8 $ 362.2 $ 486.2 $ 464.9 $ 437.8
Life 28.5 26.8 84.8 80.1 106.9 96.7 80.4
Other 41.2 37.1 121.9 109.2 147.9 131.9 118.5
Total Premium Income 197.4 186.4 586.5 551.5 741.0 693.5 636.7
Net Investment Income 23.4 23.5 71.7 70.0 94.5 90.0 79.6
Other Income 1.3 0.7 3.5 1.7 2.3 2.5 3.7
Total Operating Revenue 222.1 210.6 661.7 623.2 837.8 786.0 720.0
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 110.4 102.7 319.7 304.8 408.3 395.4 357.2
Commissions 42.8 43.2 127.7 132.1 173.9 164.9 143.9
Deferral of Policy Acquisition Costs (41.9) (43.1) (131.1) (132.4) (173.7) (166.1) (148.4)
Amortization of Deferred Policy Acquisition Costs 31.8 32.2 100.2 97.3 131.2 118.3 107.7
Amortization of Value of Business Acquired 0.3 0.3 0.9 0.9 1.2 (0.9) 1.5
Operating Expenses 36.7 35.7 114.9 104.9 141.3 127.7 120.6
Total Benefits and Expenses 180.1 171.0 532.3 507.6 682.2 639.3 582.5
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses $ 42.0 $ 39.6 $ 129.4 $ 115.6 $ 155.6 $ 146.7 $ 137.5
Operating Ratios
Benefit Ratio 55.9% 55.1% 54.5% 55.3% 55.1% 57.0% 56.1%
Operating Expense Ratio 18.6% 19.2% 19.6% 19.0% 19.1% 18.4% 18.9%
Before-tax Profit Margin 21.3% 21.2% 22.1% 21.0% 21.0% 21.2% 21.6%
Persistency - Income Protection 75.2% 74.1% 77.4% 74.1% 76.6%
Persistency - Life 84.1% 83.9% 85.2% 88.2% 86.7%
Persistency - Other 82.9% 82.6% 84.5% 84.4% 82.1%
9
23. UnumProvident Financial Results for Individual Income Protection - Closed Block
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income $ 257.6 $ 246.8 $ 732.4 $ 747.3 $ 986.6 $ 1,028.5 $ 1,106.3
Net Investment Income 192.9 192.6 562.5 595.5 799.1 824.2 814.5
Other Income 25.7 21.1 70.2 69.1 100.3 95.9 85.7
Total Operating Revenue 476.2 460.5 1,365.1 1,411.9 1,886.0 1,948.6 2,006.5
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 414.6 370.6 1,142.3 1,240.5 1,618.9 1,533.6 1,544.2
Commissions 19.0 20.0 54.6 58.5 76.3 85.5 109.2
Deferral of Policy Acquisition Costs - - - - - (7.5) (13.4)
Amortization of Deferred Policy Acquisition Costs - - - - - 41.3 36.2
Amortization of Value of Business Acquired - - - - - 32.7 34.9
Intangible Assets Write-down - - - 856.4 856.4 - -
Operating Expenses 47.2 36.7 122.0 117.1 157.2 200.5 212.4
Total Benefits and Expenses 480.8 427.3 1,318.9 2,272.5 2,708.8 1,886.1 1,923.5
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses $ (4.6) $ 33.2 $ 46.2 $ (860.6) $ (822.8) $ 62.5 $ 83.0
Operating Ratios
Benefit Ratio 160.9 % 150.2 % 156.0 % 166.0 % 164.1 % 149.1 % 139.6 %
Interest Adjusted Loss Ratio 84.9 % 89.0 % 86.4 % 87.0 % 87.5 % 82.7 % 78.1 %
Operating Expense Ratio 18.3 % 14.9 % 16.7 % 15.7 % 15.9 % 19.5 % 19.2 %
Before-tax Profit (Loss) Margin (1.8)% 13.5 % 6.3 % (115.2)% (83.4)% 6.1 % 7.5 %
Persistency 94.5 % 94.1 % 94.5 % 94.2 % 94.3 %
10
24. UnumProvident Financial Results for Individual Income Protection - Closed Block - Continued
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Income (Loss) Before Income Taxes and
Net Realized Investment Gains and Losses, as Reported $ (4.6) $ 33.2 $ 46.2 $ (860.6) $ (822.8) $ 62.5 $ 83.0
California Settlement Agreement and Related Matters -
Reserve Charges (23.1) - (23.1) - - - -
California Settlement Agreement and Related Matters -
Operating Expense Charges (11.2) - (11.2) - - - -
Multistate Market Conduct Examination Settlement Agreements -
Reserve Charges - - - - (3.7) - -
Multistate Market Conduct Examination Settlement Agreements -
Operating Expense Charges - - - - (4.9) - -
Individual Income Protection - Closed Block Restructuring -
Reserve Charges - - - (110.6) (110.6) - -
Individual Income Protection - Closed Block Restructuring -
Intangible Asset Impairment Charges - - - (856.4) (856.4) - -
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses, as Adjusted $ 29.7 $ 33.2 $ 80.5 $ 106.4 $ 152.8 $ 62.5 $ 83.0
Operating Ratios, as Adjusted
Benefit Ratio 152.0 % 150.2 % 152.8 % 151.2 % 152.5 % 149.1 % 139.6 %
Operating Expense Ratio 14.0 % 14.9 % 15.1 % 15.7 % 15.4 % 19.5 % 19.2 %
Before-tax Profit Margin 11.5 % 13.5 % 11.0 % 14.2 % 15.5 % 6.1 % 7.5 %
See quot;Notes to Statistical Supplementquot; on page 15 for additional information.
10.1
25. UnumProvident Financial Results for Other Segment
Three Months Ended Nine Months Ended Year Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004 12/31/2004 12/31/2003 12/31/2002
Operating Revenue
Premium Income $ (0.3) $ 10.6 $ 1.2 $ 22.1 $ 31.3 $ 34.3 $ 37.6
Net Investment Income 29.5 32.1 91.4 96.3 127.3 140.1 154.2
Other Income 52.3 52.4 158.8 161.1 208.3 204.4 214.3
Total Operating Revenue 81.5 95.1 251.4 279.5 366.9 378.8 406.1
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 26.7 39.7 89.1 105.3 142.3 157.1 161.1
Commissions - 0.2 0.3 5.6 4.9 10.8 3.1
Deferral of Policy Acquisition Costs 0.1 0.1 - - 0.1 0.1 -
Amortization of Deferred Policy Acquisition Costs (0.2) - - 0.1 - - 0.1
Amortization of Value of Business Acquired - - - - - - -
Operating Expenses 41.3 43.4 125.2 131.4 174.2 168.7 177.5
Total Benefits and Expenses 67.9 83.4 214.6 242.4 321.5 336.7 341.8
Operating Income Before Income Taxes and
Net Realized Investment Gains and Losses $ 13.6 $ 11.7 $ 36.8 $ 37.1 $ 45.4 $ 42.1 $ 64.3
11
