Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Unum Group | unm09302018exhibit991.htm |
| 8-K - 8-K - Unum Group | unm093020188-kcover.htm |
Unum Group
Statistical Supplement Third Quarter 2018
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 page 16.1 for a reconciliation of our non-GAAP financial measures. | |||
N.M. = not a meaningful percentage | |||
Unum Group Financial Highlights
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Consolidated U.S. GAAP Results1 | |||||||||||||||||||||||
Premium Income | $ | 2,251.8 | $ | 2,153.6 | $ | 6,722.8 | $ | 6,438.7 | $ | 8,597.1 | $ | 8,357.7 | |||||||||||
Adjusted Operating Revenue | $ | 2,921.1 | $ | 2,809.3 | $ | 8,715.8 | $ | 8,418.7 | $ | 11,246.5 | $ | 11,022.3 | |||||||||||
Net Realized Investment Gain | 6.7 | 9.8 | 1.9 | 28.9 | 40.3 | 24.2 | |||||||||||||||||
Revenue | $ | 2,927.8 | $ | 2,819.1 | $ | 8,717.7 | $ | 8,447.6 | $ | 11,286.8 | $ | 11,046.5 | |||||||||||
Net Income (Loss) | $ | (284.7 | ) | $ | 252.3 | $ | 274.3 | $ | 727.3 | $ | 994.2 | $ | 931.4 | ||||||||||
Net Income (Loss) Per Common Share: | |||||||||||||||||||||||
Basic | $ | (1.30 | ) | $ | 1.12 | $ | 1.24 | $ | 3.20 | $ | 4.39 | $ | 3.96 | ||||||||||
Assuming Dilution | $ | (1.30 | ) | $ | 1.12 | $ | 1.24 | $ | 3.19 | $ | 4.37 | $ | 3.95 | ||||||||||
Assets | $ | 62,249.8 | $ | 63,805.7 | $ | 64,013.1 | $ | 61,941.5 | |||||||||||||||
Stockholders' Equity | $ | 8,518.2 | $ | 9,448.6 | $ | 9,574.9 | $ | 8,968.0 | |||||||||||||||
Adjusted Operating Return on Equity | |||||||||||||||||||||||
Unum US | 19.9 | % | 16.6 | % | 19.0 | % | 16.1 | % | 15.9 | % | 15.0 | % | |||||||||||
Unum UK | 13.8 | % | 14.1 | % | 14.3 | % | 15.0 | % | 15.2 | % | 18.6 | % | |||||||||||
Colonial Life | 17.7 | % | 17.1 | % | 18.2 | % | 17.2 | % | 16.2 | % | 17.4 | % | |||||||||||
Core Operating Segments | 18.8 | % | 16.5 | % | 18.4 | % | 16.2 | % | 15.9 | % | 15.9 | % | |||||||||||
Consolidated | 13.7 | % | 11.5 | % | 13.3 | % | 11.5 | % | 11.6 | % | 11.2 | % | |||||||||||
Traditional U.S. Life Insurance Companies' Statutory Results2 | |||||||||||||||||||||||
Net Gain from Operations, After Tax | $ | 253.2 | $ | 187.2 | $ | 744.6 | $ | 592.5 | $ | 812.4 | $ | 884.6 | |||||||||||
Net Realized Investment Gain (Loss), After Tax | 7.6 | 3.1 | 8.7 | 2.5 | (5.0 | ) | (29.5 | ) | |||||||||||||||
Net Income | $ | 260.8 | $ | 190.3 | $ | 753.3 | $ | 595.0 | $ | 807.4 | $ | 855.1 | |||||||||||
Capital and Surplus | $ | 3,569.1 | $ | 3,683.6 | $ | 3,448.3 | $ | 3,626.9 | |||||||||||||||
Weighted Average Risk-based Capital Ratio | ~ 385% | ~ 410% | ~ 390% | ~ 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
9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||||||||
Total Stockholders' Equity (Book Value) | $ | 8,518.2 | $ | 38.95 | $ | 9,448.6 | $ | 42.11 | $ | 9,574.9 | $ | 43.02 | $ | 8,968.0 | $ | 39.02 | |||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Net Unrealized Gain (Loss) on Securities | (340.7 | ) | (1.56 | ) | 557.4 | 2.48 | 607.8 | 2.73 | 440.6 | 1.92 | |||||||||||||||||||||
Net Gain on Hedges | 250.0 | 1.15 | 290.7 | 1.30 | 282.3 | 1.27 | 327.5 | 1.42 | |||||||||||||||||||||||
Subtotal | 8,608.9 | 39.36 | 8,600.5 | 38.33 | 8,684.8 | 39.02 | 8,199.9 | 35.68 | |||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | (284.0 | ) | (1.30 | ) | (265.3 | ) | (1.18 | ) | (254.5 | ) | (1.15 | ) | (354.0 | ) | (1.54 | ) | |||||||||||||||
Subtotal | 8,892.9 | 40.66 | 8,865.8 | 39.51 | 8,939.3 | 40.17 | 8,553.9 | 37.22 | |||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (493.8 | ) | (2.26 | ) | (458.5 | ) | (2.05 | ) | (508.1 | ) | (2.28 | ) | (465.1 | ) | (2.02 | ) | |||||||||||||||
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Income (Loss) | $ | 9,386.7 | $ | 42.92 | $ | 9,324.3 | $ | 41.56 | $ | 9,447.4 | $ | 42.45 | $ | 9,019.0 | $ | 39.24 | |||||||||||||||
Dividends Paid | $ | 160.2 | $ | 0.72 | $ | 144.1 | $ | 0.63 | $ | 196.0 | $ | 0.86 | $ | 182.6 | $ | 0.77 | |||||||||||||||
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Shares Repurchased (millions) | — | 2.0 | 4.4 | 6.3 | 8.2 | 11.9 | |||||||||||||||||
Cost of Shares Repurchased (millions)(1) | $ | — | $ | 100.2 | $ | 200.3 | $ | 300.3 | $ | 400.4 | $ | 403.3 | |||||||||||
Price (UNM closing price on last trading day of period) | $ | 39.07 | $ | 51.13 | $ | 54.89 | $ | 43.93 | |||||||||||||||
Leverage Ratio | 27.0 | % | 26.2 | % | 26.1 | % | 27.2 | % | |||||||||||||||
Holding Company Cash and Marketable Securities | $ | 973 | $ | 771 | $ | 864 | $ | 594 | |||||||||||||||
(1) Includes commissions of $0.1 million for three months ended September 30, 2017, and $0.2 million for the nine months ended September 30, 2018 and 2017. For the years ended December 31, 2017 and 2016, these amounts included commissions of $0.3 million and $0.2 million, respectively.
2
Unum Group Ratings
AM Best | Fitch | Moody's | S&P | ||||
Outlook | Stable | Negative | Stable | Stable | |||
Issuer Credit Ratings | bbb | BBB | Baa2 | BBB | |||
Financial Strength Ratings | |||||||
Provident Life and Accident Insurance Company | A | A | A2 | A | |||
Unum Life Insurance Company of America | A | A | A2 | A | |||
Colonial Life & Accident Insurance Company | A | A | A2 | A | |||
The Paul Revere Life Insurance Company | A | A | A2 | A | |||
Starmount Life Insurance Company | A- | NR | NR | NR | |||
Unum Insurance Company | A- | A | A2 | NR | |||
Unum Limited | NR | NR | NR | A- | |||
NR = not rated
3
Unum Group Consolidated Statements of Operations
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Revenue | |||||||||||||||||||||||
Premium Income | $ | 2,251.8 | $ | 2,153.6 | $ | 6,722.8 | $ | 6,438.7 | $ | 8,597.1 | $ | 8,357.7 | |||||||||||
Net Investment Income | 619.2 | 609.0 | 1,845.1 | 1,831.9 | 2,451.7 | 2,459.0 | |||||||||||||||||
Net Realized Investment Gain | 6.7 | 9.8 | 1.9 | 28.9 | 40.3 | 24.2 | |||||||||||||||||
Other Income | 50.1 | 46.7 | 147.9 | 148.1 | 197.7 | 205.6 | |||||||||||||||||
Total Revenue | 2,927.8 | 2,819.1 | 8,717.7 | 8,447.6 | 11,286.8 | 11,046.5 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 2,578.9 | 1,765.6 | 6,190.9 | 5,266.6 | 7,055.7 | 6,941.8 | |||||||||||||||||
Commissions | 276.8 | 262.4 | 832.6 | 793.9 | 1,060.8 | 1,026.7 | |||||||||||||||||
Interest and Debt Expense - Non-recourse Debt | 1.8 | 1.7 | 5.2 | 5.1 | 6.7 | 6.9 | |||||||||||||||||
Interest and Debt Expense - All Other Debt | 40.9 | 38.4 | 120.1 | 114.7 | 153.2 | 159.1 | |||||||||||||||||
Deferral of Acquisition Costs | (166.8 | ) | (154.8 | ) | (501.8 | ) | (470.1 | ) | (628.0 | ) | (592.4 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 136.9 | 123.7 | 428.6 | 403.5 | 527.1 | 493.0 | |||||||||||||||||
Other Expenses | 437.1 | 415.3 | 1,324.0 | 1,275.2 | 1,707.3 | 1,663.7 | |||||||||||||||||
Total Benefits and Expenses | 3,305.6 | 2,452.3 | 8,399.6 | 7,388.9 | 9,882.8 | 9,698.8 | |||||||||||||||||
Income (Loss) Before Income Tax Expense (Benefit) | (377.8 | ) | 366.8 | 318.1 | 1,058.7 | 1,404.0 | 1,347.7 | ||||||||||||||||
Income Tax Expense (Benefit) | (93.1 | ) | 114.5 | 43.8 | 331.4 | 409.8 | 416.3 | ||||||||||||||||
Net Income (Loss) | $ | (284.7 | ) | $ | 252.3 | $ | 274.3 | $ | 727.3 | $ | 994.2 | $ | 931.4 | ||||||||||
Weighted Average Shares Outstanding | |||||||||||||||||||||||
Basic | 218.9 | 225.3 | 220.5 | 227.4 | 226.5 | 235.4 | |||||||||||||||||
Assuming Dilution | 218.9 | 226.0 | 220.9 | 228.2 | 227.3 | 236.0 | |||||||||||||||||
Actual Number of Shares Outstanding | 218.7 | 224.4 | 222.5 | 229.8 | |||||||||||||||||||
4
Unum Group Sales Data for Unum US Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | % Change | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Disability and Group Life and AD&D | |||||||||||||||||||||||||||||
Group Long-term Disability | $ | 25.4 | $ | 31.1 | (18.3 | )% | $ | 96.5 | $ | 114.6 | (15.8 | )% | $ | 240.8 | $ | 217.8 | |||||||||||||
Group Short-term Disability | 17.9 | 20.7 | (13.5 | ) | 57.8 | 65.0 | (11.1 | ) | 162.5 | 114.6 | |||||||||||||||||||
Group Life and AD&D | 29.4 | 35.1 | (16.2 | ) | 128.5 | 131.8 | (2.5 | ) | 310.5 | 270.1 | |||||||||||||||||||
Subtotal | 72.7 | 86.9 | (16.3 | ) | 282.8 | 311.4 | (9.2 | ) | 713.8 | 602.5 | |||||||||||||||||||
Supplemental and Voluntary | |||||||||||||||||||||||||||||
Individual Disability | 20.1 | 20.4 | (1.5 | ) | 56.9 | 50.2 | 13.3 | 67.9 | 65.1 | ||||||||||||||||||||
Voluntary Benefits | 47.6 | 44.8 | 6.3 | 249.0 | 241.7 | 3.0 | 292.5 | 261.7 | |||||||||||||||||||||
Dental and Vision | 12.3 | 9.7 | 26.8 | 36.3 | 30.0 | 21.0 | 54.8 | 14.5 | |||||||||||||||||||||
Subtotal | 80.0 | 74.9 | 6.8 | 342.2 | 321.9 | 6.3 | 415.2 | 341.3 | |||||||||||||||||||||
Total Sales | $ | 152.7 | $ | 161.8 | (5.6 | ) | $ | 625.0 | $ | 633.3 | (1.3 | ) | $ | 1,129.0 | $ | 943.8 | |||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Disability and Group Life and AD&D | |||||||||||||||||||||||||||||
Core Market (< 2,000 employees) | $ | 55.9 | $ | 65.5 | (14.7 | )% | $ | 191.7 | $ | 212.1 | (9.6 | )% | $ | 416.9 | $ | 378.1 | |||||||||||||
Large Case Market | 16.8 | 21.4 | (21.5 | ) | 91.1 | 99.3 | (8.3 | ) | 296.9 | 224.4 | |||||||||||||||||||
Subtotal | 72.7 | 86.9 | (16.3 | ) | 282.8 | 311.4 | (9.2 | ) | 713.8 | 602.5 | |||||||||||||||||||
Supplemental and Voluntary | 80.0 | 74.9 | 6.8 | 342.2 | 321.9 | 6.3 | 415.2 | 341.3 | |||||||||||||||||||||
Total Sales | $ | 152.7 | $ | 161.8 | (5.6 | ) | $ | 625.0 | $ | 633.3 | (1.3 | ) | $ | 1,129.0 | $ | 943.8 | |||||||||||||
5
Unum Group Sales Data for Unum UK Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
(in millions of dollars) | 9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | % Change | 12/31/2017 | 12/31/2016 | |||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Long-term Disability | $ | 9.1 | $ | 6.5 | 40.0 | % | $ | 32.5 | $ | 31.5 | 3.2 | % | $ | 47.1 | $ | 50.2 | |||||||||||||
Group Life | 5.6 | 7.8 | (28.2 | ) | 15.8 | 17.7 | (10.7 | ) | 24.4 | 23.8 | |||||||||||||||||||
Supplemental | 2.2 | 2.2 | — | 14.0 | 12.2 | 14.8 | 14.4 | 10.5 | |||||||||||||||||||||
Total Sales | $ | 16.9 | $ | 16.5 | 2.4 | $ | 62.3 | $ | 61.4 | 1.5 | $ | 85.9 | $ | 84.5 | |||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Long-term Disability and Group Life | |||||||||||||||||||||||||||||
Core Market (< 500 employees) | $ | 7.8 | $ | 6.1 | 27.9 | % | $ | 26.3 | $ | 21.6 | 21.8 | % | $ | 30.4 | $ | 42.0 | |||||||||||||
Large Case Market | 6.9 | 8.2 | (15.9 | ) | 22.0 | 27.6 | (20.3 | ) | 41.1 | 32.0 | |||||||||||||||||||
Subtotal | 14.7 | 14.3 | 2.8 | 48.3 | 49.2 | (1.8 | ) | 71.5 | 74.0 | ||||||||||||||||||||
Supplemental | 2.2 | 2.2 | — | 14.0 | 12.2 | 14.8 | 14.4 | 10.5 | |||||||||||||||||||||
Total Sales | $ | 16.9 | $ | 16.5 | 2.4 | $ | 62.3 | $ | 61.4 | 1.5 | $ | 85.9 | $ | 84.5 | |||||||||||||||
(in millions of pounds) | |||||||||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Group Long-term Disability | £ | 7.0 | £ | 5.0 | 40.0 | % | £ | 24.0 | £ | 24.9 | (3.6 | )% | £ | 36.6 | £ | 37.2 | |||||||||||||
Group Life | 4.3 | 6.1 | (29.5 | ) | 11.7 | 13.9 | (15.8 | ) | 18.9 | 17.8 | |||||||||||||||||||
Supplemental | 1.7 | 1.6 | 6.3 | 10.2 | 9.6 | 6.3 | 11.3 | 7.7 | |||||||||||||||||||||
Total Sales | £ | 13.0 | £ | 12.7 | 2.4 | £ | 45.9 | £ | 48.4 | (5.2 | ) | £ | 66.8 | £ | 62.7 | ||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Group Long-term Disability and Group Life | |||||||||||||||||||||||||||||
Core Market (< 500 employees) | £ | 6.1 | £ | 4.8 | 27.1 | % | £ | 19.5 | £ | 17.0 | 14.7 | % | £ | 23.6 | £ | 31.2 | |||||||||||||
Large Case Market | 5.2 | 6.3 | (17.5 | ) | 16.2 | 21.8 | (25.7 | ) | 31.9 | 23.8 | |||||||||||||||||||
Subtotal | 11.3 | 11.1 | 1.8 | 35.7 | 38.8 | (8.0 | ) | 55.5 | 55.0 | ||||||||||||||||||||
Supplemental | 1.7 | 1.6 | 6.3 | 10.2 | 9.6 | 6.3 | 11.3 | 7.7 | |||||||||||||||||||||
Total Sales | £ | 13.0 | £ | 12.7 | 2.4 | £ | 45.9 | £ | 48.4 | (5.2 | ) | £ | 66.8 | £ | 62.7 | ||||||||||||||
5. 1
Unum Group Sales Data for Colonial Life Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||
9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | % Change | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||
Sales by Product | |||||||||||||||||||||||||||||
Accident, Sickness, and Disability | $ | 77.3 | $ | 66.5 | 16.2 | % | $ | 227.3 | $ | 201.6 | 12.7 | % | $ | 323.2 | $ | 310.6 | |||||||||||||
Life | 24.2 | 22.6 | 7.1 | 73.1 | 68.4 | 6.9 | 107.7 | 94.0 | |||||||||||||||||||||
Cancer and Critical Illness | 19.3 | 17.8 | 8.4 | 56.5 | 49.9 | 13.2 | 88.8 | 79.0 | |||||||||||||||||||||
Total Sales | $ | 120.8 | $ | 106.9 | 13.0 | $ | 356.9 | $ | 319.9 | 11.6 | $ | 519.7 | $ | 483.6 | |||||||||||||||
Sales by Market Sector | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Core Market (< 1,000 employees) | $ | 76.2 | $ | 64.5 | 18.1 | % | $ | 230.0 | $ | 201.2 | 14.3 | % | $ | 313.5 | $ | 291.3 | |||||||||||||
Large Case Market | 16.7 | 12.2 | 36.9 | 52.6 | 46.2 | 13.9 | 90.9 | 77.4 | |||||||||||||||||||||
Subtotal | 92.9 | 76.7 | 21.1 | 282.6 | 247.4 | 14.2 | 404.4 | 368.7 | |||||||||||||||||||||
Public Sector | 27.9 | 30.2 | (7.6 | ) | 74.3 | 72.5 | 2.5 | 115.3 | 114.9 | ||||||||||||||||||||
Total Sales | $ | 120.8 | $ | 106.9 | 13.0 | $ | 356.9 | $ | 319.9 | 11.6 | $ | 519.7 | $ | 483.6 | |||||||||||||||
Certain prior year and prior period amounts in the table above were reclassified to conform to current year presentation.
5. 2
Unum Group Consolidated Balance Sheets
September 30 | December 31 | ||||||
2018 | 2017 | ||||||
Assets | |||||||
Investments | |||||||
Fixed Maturity Securities | $ | 43,071.3 | $ | 45,457.8 | |||
Mortgage Loans | 2,222.0 | 2,213.2 | |||||
Policy Loans | 3,720.2 | 3,571.1 | |||||
Other Long-term Investments | 694.2 | 646.8 | |||||
Short-term Investments | 1,238.2 | 1,155.1 | |||||
Total Investments | 50,945.9 | 53,044.0 | |||||
Other Assets | |||||||
Cash and Bank Deposits | 214.2 | 77.4 | |||||
Accounts and Premiums Receivable | 1,693.0 | 1,665.7 | |||||
Reinsurance Recoverable | 4,684.0 | 4,879.2 | |||||
Accrued Investment Income | 683.0 | 690.1 | |||||
Deferred Acquisition Costs | 2,276.9 | 2,184.6 | |||||
Goodwill | 346.0 | 338.6 | |||||
Property and Equipment | 521.0 | 504.8 | |||||
Income Tax Receivable | 19.0 | — | |||||
Deferred Income Tax | 157.4 | — | |||||
Other Assets | 709.4 | 628.7 | |||||
Total Assets | $ | 62,249.8 | $ | 64,013.1 | |||
6
Unum Group Consolidated Balance Sheets - Continued
September 30 | December 31 | ||||||
2018 | 2017 | ||||||
Liabilities and Stockholders' Equity | |||||||
Liabilities | |||||||
Policy and Contract Benefits | $ | 1,674.1 | $ | 1,605.2 | |||
Reserves for Future Policy and Contract Benefits | 45,092.7 | 45,601.6 | |||||
Unearned Premiums | 428.0 | 373.1 | |||||
Other Policyholders’ Funds | 1,551.4 | 1,595.0 | |||||
Income Tax Payable | — | 2.9 | |||||
Deferred Income Tax | — | 199.0 | |||||
Short-term Debt | — | 199.9 | |||||
Long-term Debt - Non-recourse | 151.8 | 196.0 | |||||
Long-term Debt - All Other | 2,831.7 | 2,542.4 | |||||
Payables for Collateral on Investments | 238.2 | 396.2 | |||||
Other Liabilities | 1,763.7 | 1,726.9 | |||||
Total Liabilities | 53,731.6 | 54,438.2 | |||||
Stockholders’ Equity | |||||||
Common Stock | 30.5 | 30.5 | |||||
Additional Paid-in Capital | 2,314.3 | 2,303.3 | |||||
Accumulated Other Comprehensive Income (Loss) | (868.5 | ) | 127.5 | ||||
Retained Earnings | 9,670.8 | 9,542.2 | |||||
Treasury Stock | (2,628.9 | ) | (2,428.6 | ) | |||
Total Stockholders’ Equity | 8,518.2 | 9,574.9 | |||||
Total Liabilities and Stockholders’ Equity | $ | 62,249.8 | $ | 64,013.1 | |||
6. 1
Unum Group Deferred Acquisition Costs by Segment
Unum US | Unum UK | Colonial Life | Consolidated | ||||||||||||
Balances at December 31, 2016 | $ | 1,176.5 | $ | 21.4 | $ | 896.3 | $ | 2,094.2 | |||||||
Capitalization | 325.5 | 7.0 | 295.5 | 628.0 | |||||||||||
Amortization | (293.6 | ) | (9.1 | ) | (224.4 | ) | (527.1 | ) | |||||||
Adjustment Related to Unrealized Investment Losses | (3.0 | ) | — | (9.5 | ) | (12.5 | ) | ||||||||
Foreign Currency | — | 2.0 | — | 2.0 | |||||||||||
Balances at December 31, 2017 | 1,205.4 | 21.3 | 957.9 | 2,184.6 | |||||||||||
Capitalization | 259.1 | 5.3 | 237.4 | 501.8 | |||||||||||
Amortization | (241.4 | ) | (6.2 | ) | (181.0 | ) | (428.6 | ) | |||||||
Adjustment Related to Unrealized Investment Gains | 4.7 | — | 15.2 | 19.9 | |||||||||||
Foreign Currency | — | (0.8 | ) | — | (0.8 | ) | |||||||||
Balances at September 30, 2018 | $ | 1,227.8 | $ | 19.6 | $ | 1,029.5 | $ | 2,276.9 | |||||||
6. 2
Unum Group Balance Sheets by Segment - September 30, 2018
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 | $ | 8,104.1 | $ | 2,192.6 | $ | 4,583.6 | $ | 14,880.3 | $ | 2,918.3 | $ | 2,953.2 | $ | 28,432.9 | $ | 1,761.2 | $ | 50,945.9 | |||||||||||||||||
Deferred Acquisition Costs | 100.0 | 80.1 | 1,047.7 | 1,227.8 | 19.6 | 1,029.5 | — | — | 2,276.9 | ||||||||||||||||||||||||||
Goodwill | 8.8 | — | 271.1 | 279.9 | 38.4 | 27.7 | — | — | 346.0 | ||||||||||||||||||||||||||
All Other | 284.3 | 256.6 | 368.2 | 909.1 | 235.0 | 134.8 | 5,927.6 | 1,474.5 | 8,681.0 | ||||||||||||||||||||||||||
Total Assets | $ | 8,497.2 | $ | 2,529.3 | $ | 6,270.6 | $ | 17,297.1 | $ | 3,211.3 | $ | 4,145.2 | $ | 34,360.5 | $ | 3,235.7 | $ | 62,249.8 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 7,024.4 | $ | 1,703.2 | $ | 4,000.3 | $ | 12,727.9 | $ | 2,537.2 | $ | 2,545.0 | $ | 30,936.1 | $ | — | $ | 48,746.2 | |||||||||||||||||
Debt | — | — | — | — | — | — | 151.8 | 2,831.7 | 2,983.5 | ||||||||||||||||||||||||||
All Other | 25.8 | 14.2 | 192.1 | 232.1 | 34.1 | 59.1 | 201.5 | 1,475.1 | 2,001.9 | ||||||||||||||||||||||||||
Total Liabilities | 7,050.2 | 1,717.4 | 4,192.4 | 12,960.0 | 2,571.3 | 2,604.1 | 31,289.4 | 4,306.8 | 53,731.6 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,447.0 | 825.8 | 2,035.5 | 4,308.3 | 622.1 | 1,498.9 | 3,128.5 | (948.9 | ) | 8,608.9 | |||||||||||||||||||||||||
Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges | — | (13.9 | ) | 42.7 | 28.8 | 17.9 | 42.2 | (57.4 | ) | (122.2 | ) | (90.7 | ) | ||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,447.0 | 811.9 | 2,078.2 | 4,337.1 | 640.0 | 1,541.1 | 3,071.1 | (1,071.1 | ) | 8,518.2 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 8,497.2 | $ | 2,529.3 | $ | 6,270.6 | $ | 17,297.1 | $ | 3,211.3 | $ | 4,145.2 | $ | 34,360.5 | $ | 3,235.7 | $ | 62,249.8 | |||||||||||||||||
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with our target capital levels for regulatory and rating agency purposes. We modify this formula periodically to recognize changes in the views of capital requirements.
6. 3
Unum Group Balance Sheets by Segment - December 31, 2017
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 | $ | 8,630.4 | $ | 2,315.2 | $ | 4,645.5 | $ | 15,591.1 | $ | 3,075.6 | $ | 2,939.9 | $ | 29,027.5 | $ | 2,409.9 | $ | 53,044.0 | |||||||||||||||||
Deferred Acquisition Costs | 96.7 | 77.7 | 1,031.0 | 1,205.4 | 21.3 | 957.9 | — | — | 2,184.6 | ||||||||||||||||||||||||||
Goodwill | — | — | 271.1 | 271.1 | 39.8 | 27.7 | — | — | 338.6 | ||||||||||||||||||||||||||
All Other | 364.2 | 174.6 | 502.7 | 1,041.5 | 291.4 | 258.6 | 6,023.7 | 830.7 | 8,445.9 | ||||||||||||||||||||||||||
Total Assets | $ | 9,091.3 | $ | 2,567.5 | $ | 6,450.3 | $ | 18,109.1 | $ | 3,428.1 | $ | 4,184.1 | $ | 35,051.2 | $ | 3,240.6 | $ | 64,013.1 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 7,426.5 | $ | 1,742.2 | $ | 4,035.6 | $ | 13,204.3 | $ | 2,627.7 | $ | 2,478.3 | $ | 30,864.6 | $ | — | $ | 49,174.9 | |||||||||||||||||
Debt | — | — | — | — | — | — | 196.0 | 2,742.3 | 2,938.3 | ||||||||||||||||||||||||||
All Other | 146.1 | 29.7 | 366.9 | 542.7 | 86.9 | 207.7 | 69.2 | 1,418.5 | 2,325.0 | ||||||||||||||||||||||||||
Total Liabilities | 7,572.6 | 1,771.9 | 4,402.5 | 13,747.0 | 2,714.6 | 2,686.0 | 31,129.8 | 4,160.8 | 54,438.2 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,501.1 | 775.3 | 1,915.9 | 4,192.3 | 643.2 | 1,389.2 | 3,406.3 | (946.2 | ) | 8,684.8 | |||||||||||||||||||||||||
Net Unrealized Gain on Securities and Net Gain on Hedges | 17.6 | 20.3 | 131.9 | 169.8 | 70.3 | 108.9 | 515.1 | 26.0 | 890.1 | ||||||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,518.7 | 795.6 | 2,047.8 | 4,362.1 | 713.5 | 1,498.1 | 3,921.4 | (920.2 | ) | 9,574.9 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 9,091.3 | $ | 2,567.5 | $ | 6,450.3 | $ | 18,109.1 | $ | 3,428.1 | $ | 4,184.1 | $ | 35,051.2 | $ | 3,240.6 | $ | 64,013.1 | |||||||||||||||||
6. 4
Unum Group Financial Results by Segment
We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income (loss) before income tax as presented in our consolidated statements of operations due to the exclusion of net realized investment gains and losses and certain other items as specified in the following pages. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income (loss) before income tax, or net income (loss).
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | % Change | ||||||||||||||||
Premium Income | |||||||||||||||||||||
Unum US | $ | 1,446.2 | $ | 1,360.9 | 6.3 | % | $ | 4,301.3 | $ | 4,079.0 | 5.4 | % | |||||||||
Unum UK | 138.0 | 131.5 | 4.9 | 416.5 | 379.6 | 9.7 | |||||||||||||||
Colonial Life | 400.0 | 378.7 | 5.6 | 1,193.7 | 1,129.3 | 5.7 | |||||||||||||||
Closed Block | 267.6 | 282.5 | (5.3 | ) | 811.3 | 850.8 | (4.6 | ) | |||||||||||||
2,251.8 | 2,153.6 | 4.6 | 6,722.8 | 6,438.7 | 4.4 | ||||||||||||||||
Net Investment Income | |||||||||||||||||||||
Unum US | 200.3 | 201.0 | (0.3 | ) | 591.0 | 609.1 | (3.0 | ) | |||||||||||||
Unum UK | 26.4 | 28.5 | (7.4 | ) | 86.1 | 88.3 | (2.5 | ) | |||||||||||||
Colonial Life | 36.7 | 36.0 | 1.9 | 114.2 | 107.8 | 5.9 | |||||||||||||||
Closed Block | 348.0 | 337.2 | 3.2 | 1,031.3 | 1,012.5 | 1.9 | |||||||||||||||
Corporate | 7.8 | 6.3 | 23.8 | 22.5 | 14.2 | 58.5 | |||||||||||||||
619.2 | 609.0 | 1.7 | 1,845.1 | 1,831.9 | 0.7 | ||||||||||||||||
Other Income | |||||||||||||||||||||
Unum US | 30.7 | 26.5 | 15.8 | 88.5 | 85.3 | 3.8 | |||||||||||||||
Unum UK | — | 0.6 | N.M. | — | 0.6 | N.M. | |||||||||||||||
Colonial Life | 0.4 | 0.3 | 33.3 | 1.0 | 0.8 | 25.0 | |||||||||||||||
Closed Block | 18.9 | 18.9 | — | 56.8 | 59.9 | (5.2 | ) | ||||||||||||||
Corporate | 0.1 | 0.4 | (75.0 | ) | 1.6 | 1.5 | 6.7 | ||||||||||||||
50.1 | 46.7 | 7.3 | 147.9 | 148.1 | (0.1 | ) | |||||||||||||||
Total Adjusted Operating Revenue | |||||||||||||||||||||
Unum US | 1,677.2 | 1,588.4 | 5.6 | 4,980.8 | 4,773.4 | 4.3 | |||||||||||||||
Unum UK | 164.4 | 160.6 | 2.4 | 502.6 | 468.5 | 7.3 | |||||||||||||||
Colonial Life | 437.1 | 415.0 | 5.3 | 1,308.9 | 1,237.9 | 5.7 | |||||||||||||||
Closed Block | 634.5 | 638.6 | (0.6 | ) | 1,899.4 | 1,923.2 | (1.2 | ) | |||||||||||||
Corporate | 7.9 | 6.7 | 17.9 | 24.1 | 15.7 | 53.5 | |||||||||||||||
$ | 2,921.1 | $ | 2,809.3 | 4.0 | $ | 8,715.8 | $ | 8,418.7 | 3.5 | ||||||||||||
7
Unum Group Financial Results by Segment - Continued
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | % Change | ||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||
Unum US | $ | 1,406.3 | $ | 1,330.0 | 5.7 | % | $ | 4,214.9 | $ | 4,028.1 | 4.6 | % | |||||||||
Unum UK | 138.3 | 134.1 | 3.1 | 419.1 | 386.5 | 8.4 | |||||||||||||||
Colonial Life | 352.9 | 333.3 | 5.9 | 1,059.1 | 992.0 | 6.8 | |||||||||||||||
Closed Block | 1,353.1 | 612.0 | 121.1 | 2,559.5 | 1,832.4 | 39.7 | |||||||||||||||
Corporate | 55.0 | 42.9 | 28.2 | 147.0 | 149.9 | (1.9 | ) | ||||||||||||||
3,305.6 | 2,452.3 | 34.8 | 8,399.6 | 7,388.9 | 13.7 | ||||||||||||||||
Income (Loss) Before Income Tax Expense (Benefit) and Net Realized Investment Gain | |||||||||||||||||||||
Unum US | 270.9 | 258.4 | 4.8 | 765.9 | 745.3 | 2.8 | |||||||||||||||
Unum UK | 26.1 | 26.5 | (1.5 | ) | 83.5 | 82.0 | 1.8 | ||||||||||||||
Colonial Life | 84.2 | 81.7 | 3.1 | 249.8 | 245.9 | 1.6 | |||||||||||||||
Closed Block | (718.6 | ) | 26.6 | N.M. | (660.1 | ) | 90.8 | N.M. | |||||||||||||
Corporate | (47.1 | ) | (36.2 | ) | 30.1 | (122.9 | ) | (134.2 | ) | (8.4 | ) | ||||||||||
(384.5 | ) | 357.0 | N.M. | 316.2 | 1,029.8 | (69.3 | ) | ||||||||||||||
Income Tax Expense (Benefit) | (92.0 | ) | 110.9 | (183.0 | ) | 46.0 | 320.6 | (85.7 | ) | ||||||||||||
Income (Loss) Before Net Realized Investment Gain | (292.5 | ) | 246.1 | N.M. | 270.2 | 709.2 | (61.9 | ) | |||||||||||||
Net Realized Investment Gain (net of tax expense (benefit) of $(1.1); $3.6; $(2.2); $10.8) | 7.8 | 6.2 | 25.8 | 4.1 | 18.1 | (77.3 | ) | ||||||||||||||
Net Income (Loss) | $ | (284.7 | ) | $ | 252.3 | N.M. | $ | 274.3 | $ | 727.3 | (62.3 | ) | |||||||||
7. 1
Unum Group Quarterly Historical Financial Results by Segment
9/30/18 | 6/30/18 | 3/31/18 | 12/31/17 | 9/30/17 | 6/30/17 | 3/31/17 | 12/31/16 | 9/30/16 | |||||||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||||||||||||||
Unum US | $ | 1,446.2 | $ | 1,416.3 | $ | 1,438.8 | $ | 1,364.5 | $ | 1,360.9 | $ | 1,357.7 | $ | 1,360.4 | $ | 1,325.2 | $ | 1,315.0 | |||||||||||||||||
Unum UK | 138.0 | 138.9 | 139.6 | 133.4 | 131.5 | 126.8 | 121.3 | 121.9 | 127.3 | ||||||||||||||||||||||||||
Colonial Life | 400.0 | 395.4 | 398.3 | 382.1 | 378.7 | 376.3 | 374.3 | 360.4 | 354.1 | ||||||||||||||||||||||||||
Closed Block | 267.6 | 270.4 | 273.3 | 278.4 | 282.5 | 281.4 | 286.9 | 291.7 | 293.0 | ||||||||||||||||||||||||||
2,251.8 | 2,221.0 | 2,250.0 | 2,158.4 | 2,153.6 | 2,142.2 | 2,142.9 | 2,099.2 | 2,089.4 | |||||||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||||||||||||
Unum US | 200.3 | 196.5 | 194.2 | 202.1 | 201.0 | 205.6 | 202.5 | 206.3 | 207.3 | ||||||||||||||||||||||||||
Unum UK | 26.4 | 32.1 | 27.6 | 31.9 | 28.5 | 33.2 | 26.6 | 28.8 | 28.5 | ||||||||||||||||||||||||||
Colonial Life | 36.7 | 40.2 | 37.3 | 37.1 | 36.0 | 36.7 | 35.1 | 35.8 | 36.1 | ||||||||||||||||||||||||||
Closed Block | 348.0 | 345.6 | 337.7 | 341.5 | 337.2 | 340.0 | 335.3 | 343.6 | 334.1 | ||||||||||||||||||||||||||
Corporate | 7.8 | 9.2 | 5.5 | 7.2 | 6.3 | 5.0 | 2.9 | 3.4 | 5.4 | ||||||||||||||||||||||||||
619.2 | 623.6 | 602.3 | 619.8 | 609.0 | 620.5 | 602.4 | 617.9 | 611.4 | |||||||||||||||||||||||||||
Other Income | |||||||||||||||||||||||||||||||||||
Unum US | 30.7 | 28.8 | 29.0 | 27.9 | 26.5 | 30.1 | 28.7 | 27.7 | 28.7 | ||||||||||||||||||||||||||
Unum UK | — | — | — | 0.1 | 0.6 | — | — | — | — | ||||||||||||||||||||||||||
Colonial Life | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.2 | 0.3 | 0.2 | 0.4 | ||||||||||||||||||||||||||
Closed Block | 18.9 | 18.9 | 19.0 | 19.9 | 18.9 | 20.2 | 20.8 | 20.7 | 21.5 | ||||||||||||||||||||||||||
Corporate | 0.1 | 0.3 | 1.2 | 1.4 | 0.4 | 0.7 | 0.4 | 2.4 | 0.9 | ||||||||||||||||||||||||||
50.1 | 48.3 | 49.5 | 49.6 | 46.7 | 51.2 | 50.2 | 51.0 | 51.5 | |||||||||||||||||||||||||||
Total Adjusted Operating Revenue | |||||||||||||||||||||||||||||||||||
Unum US | 1,677.2 | 1,641.6 | 1,662.0 | 1,594.5 | 1,588.4 | 1,593.4 | 1,591.6 | 1,559.2 | 1,551.0 | ||||||||||||||||||||||||||
Unum UK | 164.4 | 171.0 | 167.2 | 165.4 | 160.6 | 160.0 | 147.9 | 150.7 | 155.8 | ||||||||||||||||||||||||||
Colonial Life | 437.1 | 435.9 | 435.9 | 419.5 | 415.0 | 413.2 | 409.7 | 396.4 | 390.6 | ||||||||||||||||||||||||||
Closed Block | 634.5 | 634.9 | 630.0 | 639.8 | 638.6 | 641.6 | 643.0 | 656.0 | 648.6 | ||||||||||||||||||||||||||
Corporate | 7.9 | 9.5 | 6.7 | 8.6 | 6.7 | 5.7 | 3.3 | 5.8 | 6.3 | ||||||||||||||||||||||||||
2,921.1 | 2,892.9 | 2,901.8 | 2,827.8 | 2,809.3 | 2,813.9 | 2,795.5 | 2,768.1 | 2,752.3 | |||||||||||||||||||||||||||
8
Unum Group Quarterly Historical Financial Results by Segment - Continued
9/30/18 | 6/30/18 | 3/31/18 | 12/31/17 | 9/30/17 | 6/30/17 | 3/31/17 | 12/31/16 | 9/30/16 | |||||||||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||||||||||||||
Unum US | 1,406.3 | 1,390.5 | 1,418.1 | 1,356.9 | 1,330.0 | 1,345.6 | 1,352.5 | 1,319.1 | 1,320.0 | ||||||||||||||||||||||||||
Unum UK | 138.3 | 143.4 | 137.4 | 135.7 | 134.1 | 131.1 | 121.3 | 120.8 | 127.6 | ||||||||||||||||||||||||||
Colonial Life | 352.9 | 351.3 | 354.9 | 352.8 | 333.3 | 331.4 | 327.3 | 316.5 | 311.6 | ||||||||||||||||||||||||||
Closed Block | 1,353.1 | 605.3 | 601.1 | 606.7 | 612.0 | 609.0 | 611.4 | 621.4 | 620.0 | ||||||||||||||||||||||||||
Corporate | 55.0 | 45.0 | 47.0 | 41.8 | 42.9 | 43.3 | 63.7 | 47.5 | 52.0 | ||||||||||||||||||||||||||
3,305.6 | 2,535.5 | 2,558.5 | 2,493.9 | 2,452.3 | 2,460.4 | 2,476.2 | 2,425.3 | 2,431.2 | |||||||||||||||||||||||||||
Income (Loss) Before Income Tax Expense (Benefit) and Net Realized Investment Gain (Loss) | |||||||||||||||||||||||||||||||||||
Unum US | 270.9 | 251.1 | 243.9 | 237.6 | 258.4 | 247.8 | 239.1 | 240.1 | 231.0 | ||||||||||||||||||||||||||
Unum UK | 26.1 | 27.6 | 29.8 | 29.7 | 26.5 | 28.9 | 26.6 | 29.9 | 28.2 | ||||||||||||||||||||||||||
Colonial Life | 84.2 | 84.6 | 81.0 | 66.7 | 81.7 | 81.8 | 82.4 | 79.9 | 79.0 | ||||||||||||||||||||||||||
Closed Block | (718.6 | ) | 29.6 | 28.9 | 33.1 | 26.6 | 32.6 | 31.6 | 34.6 | 28.6 | |||||||||||||||||||||||||
Corporate | (47.1 | ) | (35.5 | ) | (40.3 | ) | (33.2 | ) | (36.2 | ) | (37.6 | ) | (60.4 | ) | (41.7 | ) | (45.7 | ) | |||||||||||||||||
(384.5 | ) | 357.4 | 343.3 | 333.9 | 357.0 | 353.5 | 319.3 | 342.8 | 321.1 | ||||||||||||||||||||||||||
Income Tax Expense (Benefit) | (92.0 | ) | 69.8 | 68.2 | 74.2 | 110.9 | 113.1 | 96.6 | 113.1 | 92.4 | |||||||||||||||||||||||||
Income (Loss) Before Net Realized Investment Gain (Loss) | (292.5 | ) | 287.6 | 275.1 | 259.7 | 246.1 | 240.4 | 222.7 | 229.7 | 228.7 | |||||||||||||||||||||||||
Net Realized Investment Gain (Loss) | 6.7 | (2.6 | ) | (2.2 | ) | 11.4 | 9.8 | 8.1 | 11.0 | 28.4 | 11.0 | ||||||||||||||||||||||||
Tax Expense (Benefit) on Net Realized Investment Gain (Loss) | (1.1 | ) | (0.5 | ) | (0.6 | ) | 4.2 | 3.6 | 3.4 | 3.8 | 10.1 | 3.7 | |||||||||||||||||||||||
Net Income (Loss) | $ | (284.7 | ) | $ | 285.5 | $ | 273.5 | $ | 266.9 | $ | 252.3 | $ | 245.1 | $ | 229.9 | $ | 248.0 | $ | 236.0 | ||||||||||||||||
Net Income (Loss) Per Common Share - Assuming Dilution | $ | (1.30 | ) | $ | 1.29 | $ | 1.23 | $ | 1.19 | $ | 1.12 | $ | 1.07 | $ | 1.00 | $ | 1.07 | $ | 1.01 | ||||||||||||||||
8. 1
Unum Group Financial Results for Unum US Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | $ | 1,446.2 | $ | 1,360.9 | $ | 4,301.3 | $ | 4,079.0 | $ | 5,443.5 | $ | 5,240.9 | |||||||||||
Net Investment Income | 200.3 | 201.0 | 591.0 | 609.1 | 811.2 | 828.7 | |||||||||||||||||
Other Income | 30.7 | 26.5 | 88.5 | 85.3 | 113.2 | 113.3 | |||||||||||||||||
Total | 1,677.2 | 1,588.4 | 4,980.8 | 4,773.4 | 6,367.9 | 6,182.9 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 975.7 | 920.7 | 2,885.9 | 2,759.8 | 3,693.4 | 3,624.3 | |||||||||||||||||
Commissions | 154.4 | 144.1 | 467.5 | 442.0 | 590.8 | 580.4 | |||||||||||||||||
Deferral of Acquisition Costs | (84.6 | ) | (78.2 | ) | (259.1 | ) | (244.0 | ) | (325.5 | ) | (314.1 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 73.7 | 65.2 | 241.4 | 228.3 | 293.6 | 275.2 | |||||||||||||||||
Other Expenses | 287.1 | 278.2 | 879.2 | 842.0 | 1,132.7 | 1,102.9 | |||||||||||||||||
Total | 1,406.3 | 1,330.0 | 4,214.9 | 4,028.1 | 5,385.0 | 5,268.7 | |||||||||||||||||
Income Before Income Tax and Net Realized Investment Gains and Losses | 270.9 | 258.4 | 765.9 | 745.3 | 982.9 | 914.2 | |||||||||||||||||
Unclaimed Death Benefits (UDB) Reserve Increase | — | — | — | — | 26.6 | — | |||||||||||||||||
Adjusted Operating Income | $ | 270.9 | $ | 258.4 | $ | 765.9 | $ | 745.3 | $ | 1,009.5 | $ | 914.2 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 67.5 | % | 67.7 | % | 67.1 | % | 67.7 | % | 67.8 | % | 69.2 | % | |||||||||||
Benefit Ratio Excluding UDB Reserve Increase | 67.4 | % | |||||||||||||||||||||
Other Expense Ratio | 19.9 | % | 20.4 | % | 20.4 | % | 20.6 | % | 20.8 | % | 21.0 | % | |||||||||||
Income Ratio | 18.7 | % | 19.0 | % | 17.8 | % | 18.3 | % | 18.1 | % | 17.4 | % | |||||||||||
Adjusted Operating Income Ratio | 18.5 | % | |||||||||||||||||||||
9
Unum Group Financial Results for Unum US Group Disability
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | $ | 444.1 | $ | 435.2 | $ | 1,322.7 | $ | 1,307.3 | $ | 1,749.6 | $ | 1,726.6 | |||||||||||
Group Short-term Disability | 180.4 | 161.1 | 527.7 | 477.3 | 639.8 | 626.1 | |||||||||||||||||
Total Premium Income | 624.5 | 596.3 | 1,850.4 | 1,784.6 | 2,389.4 | 2,352.7 | |||||||||||||||||
Net Investment Income | 112.9 | 113.7 | 330.0 | 347.3 | 460.5 | 479.5 | |||||||||||||||||
Other Income | 28.0 | 23.8 | 80.9 | 73.4 | 98.3 | 91.1 | |||||||||||||||||
Total | 765.4 | 733.8 | 2,261.3 | 2,205.3 | 2,948.2 | 2,923.3 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 476.2 | 457.1 | 1,406.8 | 1,366.8 | 1,828.5 | 1,863.8 | |||||||||||||||||
Commissions | 46.7 | 45.8 | 141.0 | 137.1 | 181.9 | 178.2 | |||||||||||||||||
Deferral of Acquisition Costs | (12.1 | ) | (12.4 | ) | (36.8 | ) | (35.8 | ) | (46.9 | ) | (46.4 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 11.2 | 10.0 | 33.6 | 29.9 | 39.9 | 35.9 | |||||||||||||||||
Other Expenses | 150.4 | 143.3 | 459.1 | 436.2 | 587.0 | 572.1 | |||||||||||||||||
Total | 672.4 | 643.8 | 2,003.7 | 1,934.2 | 2,590.4 | 2,603.6 | |||||||||||||||||
Adjusted Operating Income | $ | 93.0 | $ | 90.0 | $ | 257.6 | $ | 271.1 | $ | 357.8 | $ | 319.7 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 76.3 | % | 76.7 | % | 76.0 | % | 76.6 | % | 76.5 | % | 79.2 | % | |||||||||||
Other Expense Ratio | 24.1 | % | 24.0 | % | 24.8 | % | 24.4 | % | 24.6 | % | 24.3 | % | |||||||||||
Adjusted Operating Income Ratio | 14.9 | % | 15.1 | % | 13.9 | % | 15.2 | % | 15.0 | % | 13.6 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Group Long-term Disability | 91.0 | % | 89.5 | % | 89.9 | % | 91.0 | % | |||||||||||||||
Group Short-term Disability | 88.2 | % | 86.3 | % | 86.6 | % | 87.7 | % | |||||||||||||||
9. 1
Unum Group Financial Results for Unum US Group Life and Accidental Death & Dismemberment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Life | $ | 399.3 | $ | 370.0 | $ | 1,189.6 | $ | 1,101.7 | $ | 1,467.5 | $ | 1,410.0 | |||||||||||
Accidental Death & Dismemberment | 39.6 | 37.2 | 116.9 | 110.5 | 147.5 | 140.3 | |||||||||||||||||
Total Premium Income | 438.9 | 407.2 | 1,306.5 | 1,212.2 | 1,615.0 | 1,550.3 | |||||||||||||||||
Net Investment Income | 26.4 | 27.3 | 80.4 | 82.7 | 109.9 | 113.4 | |||||||||||||||||
Other Income | 1.2 | 1.4 | 3.4 | 3.6 | 4.8 | 4.5 | |||||||||||||||||
Total | 466.5 | 435.9 | 1,390.3 | 1,298.5 | 1,729.7 | 1,668.2 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 315.3 | 290.6 | 927.1 | 864.1 | 1,169.8 | 1,112.6 | |||||||||||||||||
Commissions | 34.9 | 33.3 | 106.5 | 98.0 | 131.3 | 126.8 | |||||||||||||||||
Deferral of Acquisition Costs | (9.5 | ) | (9.5 | ) | (29.4 | ) | (27.6 | ) | (36.2 | ) | (35.7 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 9.0 | 7.9 | 27.0 | 23.9 | 31.9 | 29.2 | |||||||||||||||||
Other Expenses | 52.8 | 53.5 | 163.3 | 163.1 | 217.4 | 213.5 | |||||||||||||||||
Total | 402.5 | 375.8 | 1,194.5 | 1,121.5 | 1,514.2 | 1,446.4 | |||||||||||||||||
Income Before Income Tax and Net Realized Investment Gains and Losses | 64.0 | 60.1 | 195.8 | 177.0 | 215.5 | 221.8 | |||||||||||||||||
UDB Reserve Increase | — | — | — | — | 18.5 | — | |||||||||||||||||
Adjusted Operating Income | $ | 64.0 | $ | 60.1 | $ | 195.8 | $ | 177.0 | $ | 234.0 | $ | 221.8 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 71.8 | % | 71.4 | % | 71.0 | % | 71.3 | % | 72.4 | % | 71.8 | % | |||||||||||
Benefit Ratio Excluding UDB Reserve Increase | 71.3 | % | |||||||||||||||||||||
Other Expense Ratio | 12.0 | % | 13.1 | % | 12.5 | % | 13.5 | % | 13.5 | % | 13.8 | % | |||||||||||
Income Ratio | 14.6 | % | 14.8 | % | 15.0 | % | 14.6 | % | 13.3 | % | 14.3 | % | |||||||||||
Adjusted Operating Income Ratio | 14.5 | % | |||||||||||||||||||||
Persistency: | |||||||||||||||||||||||
Group Life | 91.2 | % | 87.7 | % | 88.0 | % | 90.7 | % | |||||||||||||||
Accidental Death & Dismemberment | 90.0 | % | 86.8 | % | 87.2 | % | 90.3 | % | |||||||||||||||
9. 2
Unum Group Financial Results for Unum US Supplemental and Voluntary
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Individual Disability | $ | 109.5 | $ | 104.4 | $ | 319.1 | $ | 318.1 | $ | 420.2 | $ | 480.3 | |||||||||||
Voluntary Benefits | 222.3 | 210.8 | 676.0 | 639.2 | 849.4 | 796.5 | |||||||||||||||||
Dental and Vision | 51.0 | 42.2 | 149.3 | 124.9 | 169.5 | 61.1 | |||||||||||||||||
Total Premium Income | 382.8 | 357.4 | 1,144.4 | 1,082.2 | 1,439.1 | 1,337.9 | |||||||||||||||||
Net Investment Income | 61.0 | 60.0 | 180.6 | 179.1 | 240.8 | 235.8 | |||||||||||||||||
Other Income | 1.5 | 1.3 | 4.2 | 8.3 | 10.1 | 17.7 | |||||||||||||||||
Total | 445.3 | 418.7 | 1,329.2 | 1,269.6 | 1,690.0 | 1,591.4 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 184.2 | 173.0 | 552.0 | 528.9 | 695.1 | 647.9 | |||||||||||||||||
Commissions | 72.8 | 65.0 | 220.0 | 206.9 | 277.6 | 275.4 | |||||||||||||||||
Deferral of Acquisition Costs | (63.0 | ) | (56.3 | ) | (192.9 | ) | (180.6 | ) | (242.4 | ) | (232.0 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 53.5 | 47.3 | 180.8 | 174.5 | 221.8 | 210.1 | |||||||||||||||||
Other Expenses | 83.9 | 81.4 | 256.8 | 242.7 | 328.3 | 317.3 | |||||||||||||||||
Total | 331.4 | 310.4 | 1,016.7 | 972.4 | 1,280.4 | 1,218.7 | |||||||||||||||||
Income Before Income Tax and Net Realized Investment Gains and Losses | 113.9 | 108.3 | 312.5 | 297.2 | 409.6 | 372.7 | |||||||||||||||||
UDB Reserve Increase | — | — | — | — | 8.1 | — | |||||||||||||||||
Adjusted Operating Income | $ | 113.9 | $ | 108.3 | $ | 312.5 | $ | 297.2 | $ | 417.7 | $ | 372.7 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratios: | |||||||||||||||||||||||
Individual Disability | 50.4 | % | 48.3 | % | 50.5 | % | 51.4 | % | 47.2 | % | 52.9 | % | |||||||||||
Voluntary Benefits | 42.2 | % | 44.1 | % | 42.6 | % | 43.2 | % | 44.6 | % | 44.3 | % | |||||||||||
Voluntary Benefits Excluding UDB Reserve Increase | 43.6 | % | |||||||||||||||||||||
Dental and Vision | 68.8 | % | 70.1 | % | 68.9 | % | 71.3 | % | 69.6 | % | 66.6 | % | |||||||||||
Other Expense Ratio | 21.9 | % | 22.8 | % | 22.4 | % | 22.4 | % | 22.8 | % | 23.7 | % | |||||||||||
Income Ratio | 29.8 | % | 30.3 | % | 27.3 | % | 27.5 | % | 28.5 | % | 27.9 | % | |||||||||||
Adjusted Operating Income Ratio | 29.0 | % | |||||||||||||||||||||
Persistency: | |||||||||||||||||||||||
Individual Disability | 90.3 | % | 91.1 | % | 91.0 | % | 91.1 | % | |||||||||||||||
Voluntary Benefits | 76.5 | % | 76.8 | % | 77.5 | % | 76.9 | % | |||||||||||||||
Dental and Vision | 84.5 | % | 84.2 | % | 85.4 | % | 84.6 | % | |||||||||||||||
9. 3
Unum Group Financial Results for Unum UK Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | $ | 91.3 | $ | 87.0 | $ | 271.8 | $ | 251.6 | $ | 340.3 | $ | 355.2 | |||||||||||
Group Life | 27.1 | 26.7 | 83.6 | 76.9 | 103.1 | 105.7 | |||||||||||||||||
Supplemental | 19.6 | 17.8 | 61.1 | 51.1 | 69.6 | 68.4 | |||||||||||||||||
Total Premium Income | 138.0 | 131.5 | 416.5 | 379.6 | 513.0 | 529.3 | |||||||||||||||||
Net Investment Income | 26.4 | 28.5 | 86.1 | 88.3 | 120.2 | 118.1 | |||||||||||||||||
Other Income | — | 0.6 | — | 0.6 | 0.7 | 0.2 | |||||||||||||||||
Total | 164.4 | 160.6 | 502.6 | 468.5 | 633.9 | 647.6 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 102.6 | 98.4 | 309.5 | 280.9 | 381.9 | 367.4 | |||||||||||||||||
Commissions | 9.1 | 9.2 | 28.1 | 27.0 | 35.5 | 38.9 | |||||||||||||||||
Deferral of Acquisition Costs | (1.4 | ) | (1.6 | ) | (5.3 | ) | (5.4 | ) | (7.0 | ) | (8.2 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 2.0 | 2.3 | 6.2 | 6.8 | 9.1 | 9.7 | |||||||||||||||||
Other Expenses | 26.0 | 25.8 | 80.6 | 77.2 | 102.7 | 111.2 | |||||||||||||||||
Total | 138.3 | 134.1 | 419.1 | 386.5 | 522.2 | 519.0 | |||||||||||||||||
Adjusted Operating Income | $ | 26.1 | $ | 26.5 | $ | 83.5 | $ | 82.0 | $ | 111.7 | $ | 128.6 | |||||||||||
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) | 9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | |||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Group Long-term Disability | £ | 70.0 | £ | 66.4 | £ | 201.2 | £ | 197.1 | £ | 264.0 | £ | 262.0 | |||||||||||
Group Life | 20.8 | 20.3 | 61.9 | 60.2 | 80.0 | 78.0 | |||||||||||||||||
Supplemental | 15.2 | 13.7 | 45.3 | 40.1 | 53.9 | 50.5 | |||||||||||||||||
Total Premium Income | 106.0 | 100.4 | 308.4 | 297.4 | 397.9 | 390.5 | |||||||||||||||||
Net Investment Income | 20.2 | 21.8 | 63.6 | 69.2 | 93.3 | 87.3 | |||||||||||||||||
Other Income | — | 0.5 | — | 0.5 | 0.5 | 0.1 | |||||||||||||||||
Total | 126.2 | 122.7 | 372.0 | 367.1 | 491.7 | 477.9 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 78.7 | 75.2 | 229.1 | 220.0 | 296.2 | 270.9 | |||||||||||||||||
Commissions | 7.0 | 6.9 | 20.8 | 21.1 | 27.6 | 28.9 | |||||||||||||||||
Deferral of Acquisition Costs | (1.0 | ) | (1.2 | ) | (3.9 | ) | (4.2 | ) | (5.4 | ) | (6.1 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 1.5 | 1.8 | 4.6 | 5.3 | 7.0 | 7.2 | |||||||||||||||||
Other Expenses | 20.0 | 19.8 | 59.6 | 60.7 | 79.7 | 82.2 | |||||||||||||||||
Total | 106.2 | 102.5 | 310.2 | 302.9 | 405.1 | 383.1 | |||||||||||||||||
Adjusted Operating Income | £ | 20.0 | £ | 20.2 | £ | 61.8 | £ | 64.2 | £ | 86.6 | £ | 94.8 | |||||||||||
Weighted Average Pound/Dollar Exchange Rate | 1.305 | 1.312 | 1.351 | 1.277 | 1.290 | 1.357 | |||||||||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 74.2 | % | 74.9 | % | 74.3 | % | 74.0 | % | 74.4 | % | 69.4 | % | |||||||||||
Other Expense Ratio | 18.9 | % | 19.7 | % | 19.3 | % | 20.4 | % | 20.0 | % | 21.0 | % | |||||||||||
Adjusted Operating Income Ratio | 18.9 | % | 20.1 | % | 20.0 | % | 21.6 | % | 21.8 | % | 24.3 | % | |||||||||||
Persistency: | |||||||||||||||||||||||
Group Long-term Disability | 87.5 | % | 87.1 | % | 87.4 | % | 89.5 | % | |||||||||||||||
Group Life | 85.5 | % | 83.5 | % | 84.1 | % | 81.3 | % | |||||||||||||||
Supplemental | 92.9 | % | 89.5 | % | 91.0 | % | 89.9 | % | |||||||||||||||
10. 1
Unum Group Financial Results for Colonial Life Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Accident, Sickness, and Disability | $ | 231.9 | $ | 222.3 | $ | 691.8 | $ | 661.5 | $ | 884.2 | $ | 830.0 | |||||||||||
Life | 81.4 | 74.6 | 243.9 | 223.8 | 300.4 | 273.8 | |||||||||||||||||
Cancer and Critical Illness | 86.7 | 81.8 | 258.0 | 244.0 | 326.8 | 313.3 | |||||||||||||||||
Total Premium Income | 400.0 | 378.7 | 1,193.7 | 1,129.3 | 1,511.4 | 1,417.1 | |||||||||||||||||
Net Investment Income | 36.7 | 36.0 | 114.2 | 107.8 | 144.9 | 141.5 | |||||||||||||||||
Other Income | 0.4 | 0.3 | 1.0 | 0.8 | 1.1 | 1.2 | |||||||||||||||||
Total | 437.1 | 415.0 | 1,308.9 | 1,237.9 | 1,657.4 | 1,559.8 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 206.1 | 196.1 | 613.4 | 579.2 | 788.6 | 726.4 | |||||||||||||||||
Commissions | 92.4 | 86.4 | 273.7 | 256.8 | 344.5 | 313.6 | |||||||||||||||||
Deferral of Acquisition Costs | (80.8 | ) | (75.0 | ) | (237.4 | ) | (220.7 | ) | (295.5 | ) | (270.1 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | 61.2 | 56.2 | 181.0 | 168.4 | 224.4 | 208.1 | |||||||||||||||||
Other Expenses | 74.0 | 69.6 | 228.4 | 208.3 | 282.8 | 267.6 | |||||||||||||||||
Total | 352.9 | 333.3 | 1,059.1 | 992.0 | 1,344.8 | 1,245.6 | |||||||||||||||||
Income Before Income Tax and Net Realized Investment Gains and Losses | 84.2 | 81.7 | 249.8 | 245.9 | 312.6 | 314.2 | |||||||||||||||||
UDB Reserve Increase | — | — | — | — | 12.4 | — | |||||||||||||||||
Adjusted Operating Income | $ | 84.2 | $ | 81.7 | $ | 249.8 | $ | 245.9 | $ | 325.0 | $ | 314.2 | |||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Benefit Ratio | 51.5 | % | 51.8 | % | 51.4 | % | 51.3 | % | 52.2 | % | 51.3 | % | |||||||||||
Benefit Ratio Excluding UDB Reserve Increase | 51.4 | % | |||||||||||||||||||||
Other Expense Ratio | 18.5 | % | 18.4 | % | 19.1 | % | 18.4 | % | 18.7 | % | 18.9 | % | |||||||||||
Income Ratio | 21.1 | % | 21.6 | % | 20.9 | % | 21.8 | % | 20.7 | % | 22.2 | % | |||||||||||
Adjusted Operating Income Ratio | 21.5 | % | |||||||||||||||||||||
Persistency: | |||||||||||||||||||||||
Accident, Sickness, and Disability | 73.8 | % | 75.4 | % | 75.1 | % | 75.6 | % | |||||||||||||||
Life | 83.7 | % | 84.5 | % | 84.4 | % | 85.0 | % | |||||||||||||||
Cancer and Critical Illness | 82.4 | % | 82.6 | % | 82.7 | % | 82.9 | % | |||||||||||||||
11
Unum Group Financial Results for Closed Block Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||
Individual Disability | $ | 102.7 | $ | 117.9 | $ | 319.0 | $ | 357.7 | $ | 471.8 | $ | 521.9 | |||||||||||
Long-term Care | 163.0 | 162.4 | 485.8 | 486.4 | 648.7 | 643.9 | |||||||||||||||||
All Other | 1.9 | 2.2 | 6.5 | 6.7 | 8.7 | 4.6 | |||||||||||||||||
Total Premium Income | 267.6 | 282.5 | 811.3 | 850.8 | 1,129.2 | 1,170.4 | |||||||||||||||||
Net Investment Income | 348.0 | 337.2 | 1,031.3 | 1,012.5 | 1,354.0 | 1,352.2 | |||||||||||||||||
Other Income | 18.9 | 18.9 | 56.8 | 59.9 | 79.8 | 86.0 | |||||||||||||||||
Total | 634.5 | 638.6 | 1,899.4 | 1,923.2 | 2,563.0 | 2,608.6 | |||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 1,294.5 | 550.4 | 2,382.1 | 1,646.7 | 2,191.8 | 2,223.7 | |||||||||||||||||
Commissions | 20.9 | 22.7 | 63.3 | 68.1 | 90.0 | 93.8 | |||||||||||||||||
Interest and Debt Expense | 1.8 | 1.7 | 5.2 | 5.1 | 6.7 | 6.9 | |||||||||||||||||
Other Expenses | 35.9 | 37.2 | 108.9 | 112.5 | 150.6 | 154.7 | |||||||||||||||||
Total | 1,353.1 | 612.0 | 2,559.5 | 1,832.4 | 2,439.1 | 2,479.1 | |||||||||||||||||
Income (Loss) Before Income Tax and Net Realized Investment Gains and Losses | (718.6 | ) | 26.6 | (660.1 | ) | 90.8 | 123.9 | 129.5 | |||||||||||||||
Long-term Care Reserve Increase | 750.8 | — | 750.8 | — | — | — | |||||||||||||||||
Adjusted Operating Income | $ | 32.2 | $ | 26.6 | $ | 90.7 | $ | 90.8 | $ | 123.9 | $ | 129.5 | |||||||||||
Interest Adjusted Loss Ratios: | |||||||||||||||||||||||
Individual Disability | 80.5 | % | 82.4 | % | 80.1 | % | 82.8 | % | 82.4 | % | 83.6 | % | |||||||||||
Long-term Care | 548.2 | % | 93.3 | % | 248.2 | % | 90.5 | % | 91.1 | % | 91.1 | % | |||||||||||
Long-term Care Excluding the Reserve Increase | 87.5 | % | 93.7 | % | |||||||||||||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||||||
Other Expense Ratio | 13.4 | % | 13.2 | % | 13.4 | % | 13.2 | % | 13.3 | % | 13.2 | % | |||||||||||
Income (Loss) Ratio | (268.5 | )% | 9.4 | % | (81.4 | )% | 10.7 | % | 11.0 | % | 11.1 | % | |||||||||||
Adjusted Operating Income Ratio | 12.0 | % | 11.2 | % | |||||||||||||||||||
Persistency: | |||||||||||||||||||||||
Individual Disability | 88.7 | % | 89.8 | % | 89.6 | % | 90.9 | % | |||||||||||||||
Long-term Care | 95.6 | % | 95.5 | % | 95.9 | % | 94.8 | % | |||||||||||||||
12
Unum Group Financial Results for Corporate Segment
Three Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/2018 | 9/30/2017 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||
Adjusted Operating Revenue | |||||||||||||||||||||||
Net Investment Income | $ | 7.8 | $ | 6.3 | $ | 22.5 | $ | 14.2 | $ | 21.4 | $ | 18.5 | |||||||||||
Other Income | 0.1 | 0.4 | 1.6 | 1.5 | 2.9 | 4.9 | |||||||||||||||||
Total | 7.9 | 6.7 | 24.1 | 15.7 | 24.3 | 23.4 | |||||||||||||||||
Interest and Other Expenses | 55.0 | 42.9 | 147.0 | 149.9 | 191.7 | 186.4 | |||||||||||||||||
Loss Before Income Tax and Net Realized Investment Gains and Losses | (47.1 | ) | (36.2 | ) | (122.9 | ) | (134.2 | ) | (167.4 | ) | (163.0 | ) | |||||||||||
Loss from Guaranty Fund Assessment | — | — | — | 20.6 | 20.6 | — | |||||||||||||||||
Adjusted Operating Loss | $ | (47.1 | ) | $ | (36.2 | ) | $ | (122.9 | ) | $ | (113.6 | ) | $ | (146.8 | ) | $ | (163.0 | ) | |||||
13
Unum Group Reserves
September 30, 2018 | |||||||||||||||||||||||||||||
Gross | Total | ||||||||||||||||||||||||||||
Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 5,919.9 | $ | 668.9 | 28.3 | % | $ | 6,588.8 | $ | 71.4 | $ | 6,517.4 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 53.7 | 0.3 | 737.7 | 223.8 | 4.1 | 1,015.2 | 5.7 | 1,009.5 | |||||||||||||||||||||
Individual Disability | 520.8 | 2.6 | 1,349.1 | 135.6 | 6.4 | 2,005.5 | 213.8 | 1,791.7 | |||||||||||||||||||||
Voluntary Benefits | 1,622.7 | 8.1 | 47.1 | 62.7 | 0.5 | 1,732.5 | 26.9 | 1,705.6 | |||||||||||||||||||||
Dental and Vision | — | — | (1.0 | ) | 11.4 | 0.1 | 10.4 | 0.2 | 10.2 | ||||||||||||||||||||
Unum US Segment | 2,197.2 | 11.0 | 8,052.8 | 1,102.4 | 39.4 | 11,352.4 | 318.0 | 11,034.4 | |||||||||||||||||||||
Unum UK Segment | 17.1 | 0.1 | 1,919.4 | 63.6 | 8.5 | 2,000.1 | 85.9 | 1,914.2 | |||||||||||||||||||||
Colonial Life Segment | 2,076.0 | 10.5 | 290.9 | 135.0 | 1.8 | 2,501.9 | 8.2 | 2,493.7 | |||||||||||||||||||||
Individual Disability | 351.6 | 1.8 | 9,161.9 | 207.3 | 40.3 | 9,720.8 | 1,634.4 | 8,086.4 | |||||||||||||||||||||
Long-term Care | 9,308.1 | 47.0 | 1,805.9 | 212.5 | 8.7 | 11,326.5 | 40.3 | 11,286.2 | |||||||||||||||||||||
Other | 5,874.9 | 29.6 | 178.0 | 127.3 | 1.3 | 6,180.2 | 5,108.8 | 1,071.4 | |||||||||||||||||||||
Closed Block Segment | 15,534.6 | 78.4 | 11,145.8 | 547.1 | 50.3 | 27,227.5 | 6,783.5 | 20,444.0 | |||||||||||||||||||||
Subtotal | $ | 19,824.9 | 100.0 | % | $ | 21,408.9 | $ | 1,848.1 | 100.0 | % | 43,081.9 | 7,195.6 | 35,886.3 | ||||||||||||||||
Adjustment Related to Unrealized Investment Gains and Losses | 3,684.9 | 273.3 | 3,411.6 | ||||||||||||||||||||||||||
Consolidated | $ | 46,766.8 | $ | 7,468.9 | $ | 39,297.9 | |||||||||||||||||||||||
The adjustment related to unrealized investment gains and losses reflects the changes that would be necessary to policyholder liabilities if the unrealized investment gains and losses related to the corresponding available-for-sale securities had been realized. Changes in this adjustment are primarily due to movements in the U.S. Treasury rates and credit spreads.
14
Unum Group Reserves
December 31, 2017 | |||||||||||||||||||||||||||||
Gross | Total Reinsurance Ceded | ||||||||||||||||||||||||||||
Policy Reserves | Claim Reserves | Total Net | |||||||||||||||||||||||||||
% | Incurred | IBNR | % | Total | |||||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 6,047.0 | $ | 624.2 | 28.7 | % | $ | 6,671.2 | $ | 73.8 | $ | 6,597.4 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 54.9 | 0.3 | 735.5 | 208.0 | 4.1 | 998.4 | 5.2 | 993.2 | |||||||||||||||||||||
Individual Disability | 533.4 | 2.8 | 1,318.0 | 137.6 | 6.3 | 1,989.0 | 207.5 | 1,781.5 | |||||||||||||||||||||
Voluntary Benefits | 1,566.7 | 8.3 | 46.7 | 61.0 | 0.5 | 1,674.4 | 27.3 | 1,647.1 | |||||||||||||||||||||
Dental and Vision | — | — | 0.7 | 11.3 | 0.1 | 12.0 | 0.3 | 11.7 | |||||||||||||||||||||
Unum US Segment | 2,155.0 | 11.4 | 8,147.9 | 1,042.1 | 39.7 | 11,345.0 | 314.1 | 11,030.9 | |||||||||||||||||||||
Unum UK Segment | 18.1 | 0.1 | 1,918.3 | 108.3 | 8.7 | 2,044.7 | 87.0 | 1,957.7 | |||||||||||||||||||||
Colonial Life Segment | 1,989.4 | 10.5 | 288.3 | 137.2 | 1.8 | 2,414.9 | 8.5 | 2,406.4 | |||||||||||||||||||||
Individual Disability | 418.5 | 2.2 | 9,407.4 | 219.1 | 41.5 | 10,045.0 | 1,619.8 | 8,425.2 | |||||||||||||||||||||
Long-term Care | 8,414.3 | 44.5 | 1,494.8 | 150.9 | 7.1 | 10,060.0 | 40.3 | 10,019.7 | |||||||||||||||||||||
Other | 5,894.8 | 31.3 | 187.3 | 120.4 | 1.2 | 6,202.5 | 5,090.6 | 1,111.9 | |||||||||||||||||||||
Closed Block Segment | 14,727.6 | 78.0 | 11,089.5 | 490.4 | 49.8 | 26,307.5 | 6,750.7 | 19,556.8 | |||||||||||||||||||||
Subtotal | $ | 18,890.1 | 100.0 | % | $ | 21,444.0 | $ | 1,778.0 | 100.0 | % | 42,112.1 | 7,160.3 | 34,951.8 | ||||||||||||||||
Adjustment Related to Unrealized Investment Gains and Losses | 5,094.7 | 375.8 | 4,718.9 | ||||||||||||||||||||||||||
Consolidated | $ | 47,206.8 | $ | 7,536.1 | $ | 39,670.7 | |||||||||||||||||||||||
14. 1
Unum Group Investments
9/30/2018 | 9/30/2018 | 12/31/2017 | |||||||||||||||
Fixed Maturity Securities (Fair Value) | |||||||||||||||||
Public | $ | 27,921.6 | 64.8 | % | Selected Statistics | ||||||||||||
Asset-Backed Securities | 65.8 | 0.2 | Earned Book Yield | 5.17 | % | 5.23 | % | ||||||||||
Residential Mortgage-Backed Securities (1) | 1,479.2 | 3.4 | Average Duration (in years) | 7.58 | 7.70 | ||||||||||||
Commercial Mortgage-Backed Securities | 82.0 | 0.2 | |||||||||||||||
Private Placements | 5,363.3 | 12.4 | |||||||||||||||
High Yield | 3,221.1 | 7.5 | |||||||||||||||
Government Securities | 2,577.9 | 6.0 | |||||||||||||||
Municipal Securities (2) | 2,320.0 | 5.4 | |||||||||||||||
Redeemable Preferred Stocks | 40.4 | 0.1 | |||||||||||||||
Total | $ | 43,071.3 | 100.0 | % | |||||||||||||
Amortized Cost | Fair Value | ||||||||||||||||
Quality Ratings of Fixed Maturity Securities | Schedule BA and Non-Current | ||||||||||||||||
Aaa | 8.5 | % | 8.3 | % | Total Non-Current Investments | $ | 35.8 | $ | 32.9 | ||||||||
Aa | 7.4 | 7.9 | Total Schedule BA Assets | $ | 567.3 | $ | 535.4 | ||||||||||
A | 26.5 | 27.6 | |||||||||||||||
Baa | 49.5 | 48.7 | |||||||||||||||
Below Baa | 8.1 | 7.5 | |||||||||||||||
Total | 100.0 | % | 100.0 | % | |||||||||||||
(1) Includes $8.8 million of high yield mortgage-backed securities. | |||||||||||||||||
(2) Includes $1.5 million of high yield taxable municipal securities. | |||||||||||||||||
15
Unum Group Investments at September 30, 2018
Fixed Maturity Securities - By Industry Classification - Unrealized Gains and Losses | ||||||||||||||||||||||||
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 | $ | 2,852.3 | $ | 131.9 | $ | 1,070.2 | $ | 43.7 | $ | 1,782.1 | $ | 175.6 | ||||||||||||
Capital Goods | 4,073.7 | 267.2 | 1,091.4 | 55.8 | 2,982.3 | 323.0 | ||||||||||||||||||
Communications | 2,854.1 | 263.6 | 713.1 | 32.3 | 2,141.0 | 295.9 | ||||||||||||||||||
Consumer Cyclical | 1,355.6 | 70.0 | 467.7 | 12.3 | 887.9 | 82.3 | ||||||||||||||||||
Consumer Non-Cyclical | 6,596.8 | 338.3 | 2,498.8 | 132.7 | 4,098.0 | 471.0 | ||||||||||||||||||
Energy | 4,661.8 | 410.4 | 930.2 | 37.3 | 3,731.6 | 447.7 | ||||||||||||||||||
Financial Institutions | 3,227.6 | 141.5 | 1,069.2 | 34.2 | 2,158.4 | 175.7 | ||||||||||||||||||
Mortgage/Asset-Backed | 1,627.0 | 36.0 | 728.3 | 21.1 | 898.7 | 57.1 | ||||||||||||||||||
Sovereigns | 798.4 | 154.3 | 46.7 | 1.7 | 751.7 | 156.0 | ||||||||||||||||||
Technology | 1,541.5 | 37.2 | 548.7 | 14.8 | 992.8 | 52.0 | ||||||||||||||||||
Transportation | 1,993.1 | 151.4 | 625.3 | 22.0 | 1,367.8 | 173.4 | ||||||||||||||||||
U.S. Government Agencies and Municipalities | 4,099.5 | 358.6 | 965.3 | 35.3 | 3,134.2 | 393.9 | ||||||||||||||||||
Public Utilities | 7,389.9 | 797.7 | 861.8 | 53.4 | 6,528.1 | 851.1 | ||||||||||||||||||
Total | $ | 43,071.3 | $ | 3,158.1 | $ | 11,616.7 | $ | 496.6 | $ | 31,454.6 | $ | 3,654.7 | ||||||||||||
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 | $ | 2,269.5 | $ | 25.9 | $ | 230.0 | $ | 2.3 | ||||||||||||||||
91 through 180 days | 2,246.0 | 61.7 | 200.6 | 6.9 | ||||||||||||||||||||
181 through 270 days | 3,526.9 | 158.2 | 501.5 | 19.5 | ||||||||||||||||||||
271 days to 1 year | 651.3 | 58.1 | 158.1 | 11.5 | ||||||||||||||||||||
Greater than 1 year | 1,456.7 | 107.3 | 376.1 | 45.2 | ||||||||||||||||||||
Total | $ | 10,150.4 | $ | 411.2 | $ | 1,466.3 | $ | 85.4 | ||||||||||||||||
15. 1
Appendix to Statistical Supplement
2018 Significant Items
• | In October of 2018, we completed our purchase of Pramerica Zycie TUiR SA ("Pramerica"), a financial protection benefits provider in Poland. The acquisition of Pramerica will expand our European presence, which we believe to be an attractive market for financial protection benefits. This acquisition is not expected to materially impact our results of operations or financial position for 2018 or alter our share repurchase and common stock dividend strategy. |
• | Third quarter of 2018 reserve increase of $750.8 million before tax and $593.1 million after tax related to long-term care. |
• | In January 2016, the Financial Accounting Standards Board (FASB) issued an update that changed the accounting and disclosure requirements for certain financial instruments. These changes include a requirement to measure equity investments, other than those that result in consolidation or are accounted for under the equity method, at fair value through net income unless the investment qualifies for certain practicability exceptions. In addition, the update clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale fixed maturity securities. We adopted this update effective January 1, 2018 using a modified retrospective approach through a cumulative-effect adjustment as of January 1, 2018 which resulted in a decrease to accumulated other comprehensive income (AOCI) of $17.5 million, an increase to retained earnings of $14.5 million, a decrease to other long-term investments of $3.8 million, and a decrease to deferred income tax liability of $0.8 million. |
2017 Significant Items
• | Fourth quarter of 2017 unclaimed death benefit reserve increase of $18.5 million for Unum US group life, $8.1 million for Unum US voluntary life and $12.4 million for Colonial Life voluntary life, for a total reserve increase of $39.0 million before tax and $25.4 million after tax. |
• | Fourth quarter of 2017 net tax benefit of $31.5 million resulting from H.R.1, An Act to Provide Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, more commonly known as the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017. This is comprised of a tax benefit of $97.9 million related to the revaluation of our net deferred tax liabilities associated with our U.S. operations to the newly enacted U.S. corporate tax rate and a tax expense of $66.4 million resulting from the tax on undistributed and previously untaxed foreign earnings and profits. |
• | Fourth quarter of 2017 results for the Unum US individual disability product line reflects a reserve release of $19.5 million before tax and $12.7 million after tax, resulting from our annual review of reserve adequacy which reflects the recognition of updated morbidity assumptions in our disabled life reserves. |
• | First quarter of 2017 loss from a guaranty fund assessment of $20.6 million before tax and $13.4 million after tax. |
2016 Significant Item
• | 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 a total cash purchase price of $140.3 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 marketed by Unum US are reported in our Unum US segment within our supplemental and voluntary product lines. Colonial Life dental and vision products were introduced in 2018 and are reported in our Accident, Sickness and Disability 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, operating results, or sales during 2016. |
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 adjusted operating revenue, which excludes realized investment gains or losses; |
• | After-tax adjusted operating income or loss, which excludes realized investment gains or losses and certain other items, as applicable; |
• | Adjusted operating return on equity, which is calculated using after-tax adjusted operating income or loss and excludes from equity the unrealized gain or loss on securities and net gain on hedges; |
• | Leverage ratio, which excludes the unrealized gain or loss on securities and net gain on hedges, and the non-recourse debt and associated capital of Northwind Holdings, LLC; |
• | Book value per common share, which is calculated excluding AOCI; and |
• | Benefit ratio for our Unum US individual disability product, adjusted for the reserve release in the fourth quarter of 2017. |
Realized investment gains or losses and unrealized gains or losses on securities and net gains on hedges depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our Company. Leverage ratio and book value per common share excluding certain components of AOCI, certain of which tend to fluctuate depending on market conditions and general economic trends, are important measures. We also exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace the comparable GAAP measures in the determination of overall profitability.
Information reconciling the Company’s outlook on after-tax adjusted operating income growth per share to the comparable GAAP financial measure is not provided. The only amounts excluded from after-tax adjusted operating income are those described in this Appendix to Statistical Supplement. The Company is unable to predict with reasonable certainty realized investment gains and losses, which are affected by overall market conditions and also by factors such as an economic or political change in the country of the issuer, a regulatory change pertaining to the issuer’s industry, a significant improvement or deterioration in the cash flows of the issuer, unforeseen accounting irregularities or fraud committed by an issuer, movement in credit spreads, ratings upgrades or downgrades, a change in the issuer’s marketplace or business prospects, or any other event that significantly affects the issuers of the fixed maturity securities which the Company holds in its investment portfolio. For a reconciliation of the most directly comparable GAAP measures to these non-GAAP financial measures, refer to the "Reconciliation of Non-GAAP Financial Measures" beginning on page 16.2, other than book value per common share, which is presented on page 2.
16. 1
Reconciliation of Non-GAAP Financial Measures
Three Months Ended | |||||||||||||||||||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | December 31 | September 30 | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||
Total Revenue | $ | 2,927.8 | $ | 2,890.3 | $ | 2,899.6 | $ | 2,839.2 | $ | 2,819.1 | $ | 2,822.0 | $ | 2,806.5 | $ | 2,796.5 | $ | 2,763.3 | |||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||||||
Net Realized Investment Gain (Loss) | 6.7 | (2.6 | ) | (2.2 | ) | 11.4 | 9.8 | 8.1 | 11.0 | 28.4 | 11.0 | ||||||||||||||||||||||||
Adjusted Operating Revenue | $ | 2,921.1 | $ | 2,892.9 | $ | 2,901.8 | $ | 2,827.8 | $ | 2,809.3 | $ | 2,813.9 | $ | 2,795.5 | $ | 2,768.1 | $ | 2,752.3 | |||||||||||||||||
Annualized | |||||||||||
After-Tax Adjusted | Average | Adjusted Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(1) | On Equity | |||||||||
Three Months Ended September 30, 2018 | |||||||||||
Unum US | $ | 214.0 | $ | 4,292.3 | 19.9 | % | |||||
Unum UK | 21.4 | 623.2 | 13.8 | % | |||||||
Colonial Life | 66.4 | 1,498.3 | 17.7 | % | |||||||
Core Operating Segments | 301.8 | 6,413.8 | 18.8 | % | |||||||
Closed Block | 41.5 | 3,403.9 | |||||||||
Corporate | (42.7 | ) | (1,035.7 | ) | |||||||
Total | $ | 300.6 | $ | 8,782.0 | 13.7 | % | |||||
Three Months Ended September 30, 2017 | |||||||||||
Unum US | $ | 167.3 | $ | 4,024.4 | 16.6 | % | |||||
Unum UK | 21.8 | 618.4 | 14.1 | % | |||||||
Colonial Life | 53.2 | 1,247.8 | 17.1 | % | |||||||
Core Operating Segments | 242.3 | 5,890.6 | 16.5 | % | |||||||
Closed Block | 19.7 | 3,258.1 | |||||||||
Corporate | (15.9 | ) | (621.5 | ) | |||||||
Total | $ | 246.1 | $ | 8,527.2 | 11.5 | % | |||||
(1) Excludes net unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented on page 16.5.
16. 2 | ||
Reconciliation of Non-GAAP Financial Measures - Continued
Annualized | |||||||||||
After-Tax Adjusted | Average | Adjusted Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(1) | On Equity | |||||||||
Nine Months Ended September 30, 2018 | |||||||||||
Unum US | $ | 606.1 | $ | 4,251.9 | 19.0 | % | |||||
Unum UK | 67.6 | 632.5 | 14.3 | % | |||||||
Colonial Life | 197.5 | 1,444.1 | 18.2 | % | |||||||
Core Operating Segments | 871.2 | 6,328.5 | 18.4 | % | |||||||
Closed Block | 88.9 | 3,269.1 | |||||||||
Corporate | (96.8 | ) | (943.5 | ) | |||||||
Total | $ | 863.3 | $ | 8,654.1 | 13.3 | % | |||||
Nine Months Ended September 30, 2017 | |||||||||||
Unum US | $ | 485.4 | $ | 4,014.6 | 16.1 | % | |||||
Unum UK | 67.5 | 601.0 | 15.0 | % | |||||||
Colonial Life | 160.3 | 1,241.7 | 17.2 | % | |||||||
Core Operating Segments | 713.2 | 5,857.3 | 16.2 | % | |||||||
Closed Block | 63.0 | 3,236.3 | |||||||||
Corporate | (53.6 | ) | (693.4 | ) | |||||||
Total | $ | 722.6 | $ | 8,400.2 | 11.5 | % | |||||
(1) Excludes net unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented on page 16.5. Due to the implementation of a Financial Accounting Standards Board update for which the beginning balance of 2018 for certain stockholders' equity line items were adjusted, we are computing the average allocated equity for 2018 using internally allocated equity that reflects the adjusted beginning balance at January 1, 2018. As a result, average equity for the nine months ended September 30, 2018 for certain of our segments will not compute using the historical allocated equity at December 31, 2017.
16. 3
Reconciliation of Non-GAAP Financial Measures - Continued
After-Tax Adjusted | Average | Adjusted Operating | |||||||||
Operating | Allocated | Return | |||||||||
Income (Loss) | Equity(2) | On Equity | |||||||||
Year Ended December 31, 2017 | |||||||||||
Unum US | $ | 656.2 | $ | 4,130.2 | 15.9 | % | |||||
Unum UK | 92.1 | 607.3 | 15.2 | % | |||||||
Colonial Life | 211.2 | 1,308.1 | 16.2 | % | |||||||
Core Operating Segments | 959.5 | 6,045.6 | 15.9 | % | |||||||
Closed Block | 86.4 | 3,290.1 | |||||||||
Corporate | (69.7 | ) | (893.3 | ) | |||||||
Total | $ | 976.2 | $ | 8,442.4 | 11.6 | % | |||||
Year Ended December 31, 2016 | |||||||||||
Unum US | $ | 598.3 | $ | 3,992.2 | 15.0 | % | |||||
Unum UK | 113.8 | 610.6 | 18.6 | % | |||||||
Colonial Life | 204.9 | 1,173.9 | 17.4 | % | |||||||
Core Operating Segments | 917.0 | 5,776.7 | 15.9 | % | |||||||
Closed Block | 87.0 | 3,055.1 | |||||||||
Corporate | (88.4 | ) | (691.0 | ) | |||||||
Total | $ | 915.6 | $ | 8,140.8 | 11.2 | % | |||||
(2) Excludes net unrealized gain (loss) on securities and net gain on hedges and is calculated using the stockholders' equity balances presented on page 16.5.
16. 4
Reconciliation of Non-GAAP Financial Measures - Continued
Average allocated equity is computed as follows:
9/30/2018 | 6/30/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 12/31/2016 | 12/31/2015 | |||||||||||||||||||||
Total Stockholders' Equity | $ | 8,518.2 | $ | 9,446.4 | $ | 9,574.9 | $ | 9,448.6 | $ | 9,316.6 | $ | 8,968.0 | $ | 8,663.9 | |||||||||||||
Excluding: | |||||||||||||||||||||||||||
Net Unrealized Gain (Loss) on Securities | (340.7 | ) | 224.5 | 607.8 | 557.4 | 558.2 | 440.6 | 204.3 | |||||||||||||||||||
Net Gain on Hedges | 250.0 | 266.8 | 282.3 | 290.7 | 304.5 | 327.5 | 378.0 | ||||||||||||||||||||
Total Adjusted Stockholders' Equity | $ | 8,608.9 | $ | 8,955.1 | $ | 8,684.8 | $ | 8,600.5 | $ | 8,453.9 | $ | 8,199.9 | $ | 8,081.6 | |||||||||||||
Three Months Ended | Nine Months Ended | Twelve Months Ended | Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||||||
9/30/2018 | 12/31/2017 | 9/30/2017 | 12/31/2016 | ||||||||||||||||||||||||
Average Stockholders' Equity Excluding Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges | $ | 8,782.0 | $ | 8,654.1 | $ | 8,442.4 | $ | 8,527.2 | $ | 8,400.2 | $ | 8,140.8 | |||||||||||||||
16. 5
Reconciliation of Non-GAAP Financial Measures - Continued
Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||
(in millions) | per share * | (in millions) | per share * | (in millions) | per share * | (in millions) | per share * | ||||||||||||||||||||||||
Net Income (Loss) | $ | (284.7 | ) | $ | (1.30 | ) | $ | 252.3 | $ | 1.12 | $ | 274.3 | $ | 1.24 | $ | 727.3 | $ | 3.19 | |||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Net Realized Investment Gain (net of tax expense (benefit) of $(1.1); $3.6; $(2.2); $10.8) | 7.8 | 0.04 | 6.2 | 0.03 | 4.1 | 0.01 | 18.1 | 0.08 | |||||||||||||||||||||||
Loss from Guaranty Fund Assessment (net of tax benefit of $-; $-; $-; $7.2) | — | — | — | — | — | — | (13.4 | ) | (0.06 | ) | |||||||||||||||||||||
Long-term Care Reserve Increase (net of tax benefit of $157.7; $-; $157.7; $-) | (593.1 | ) | (2.71 | ) | — | — | (593.1 | ) | (2.68 | ) | — | — | |||||||||||||||||||
After-tax Adjusted Operating Income | $ | 300.6 | $ | 1.37 | $ | 246.1 | $ | 1.09 | $ | 863.3 | $ | 3.91 | $ | 722.6 | $ | 3.17 | |||||||||||||||
Year Ended December 31 | |||||||||||||||
2017 | 2016 | ||||||||||||||
(in millions) | per share * | (in millions) | per share * | ||||||||||||
Net Income | $ | 994.2 | $ | 4.37 | $ | 931.4 | $ | 3.95 | |||||||
Excluding: | |||||||||||||||
Net Realized Investment Gain (net of tax expense of $15.0; $8.4) | 25.3 | 0.11 | 15.8 | 0.07 | |||||||||||
Loss from Guaranty Fund Assessment (net of tax benefit of $7.2; $-) | (13.4 | ) | (0.06 | ) | — | — | |||||||||
Unclaimed Death Benefits Reserve Increase (net of tax benefit of $13.6; $-) | (25.4 | ) | (0.11 | ) | — | — | |||||||||
Net Tax Benefit for Impacts of TCJA | 31.5 | 0.14 | — | — | |||||||||||
After-tax Adjusted Operating Income | 976.2 | 4.29 | 915.6 | 3.88 | |||||||||||
Excluding: | |||||||||||||||
Unum US Individual Disability Reserve Release (net of tax expense of $6.8; $-) | 12.7 | 0.05 | — | — | |||||||||||
After-tax Adjusted Operating Income, Excluding Unum US Individual Disability Reserve Release | $ | 963.5 | $ | 4.24 | $ | 915.6 | $ | 3.88 | |||||||
* Assuming Dilution | |||||||||||||||
16. 6
Reconciliation of Non-GAAP Financial Measures - Continued
September 30 | December 31 | ||||||||||||||
2018 | 2017 | 2017 | 2016 | ||||||||||||
Debt | $ | 2,983.5 | $ | 2,954.0 | $ | 2,938.3 | $ | 2,999.4 | |||||||
Excluding: | |||||||||||||||
Non-recourse Debt | 151.8 | 210.8 | 196.0 | 255.0 | |||||||||||
Adjusted Debt | $ | 2,831.7 | $ | 2,743.2 | $ | 2,742.3 | $ | 2,744.4 | |||||||
Total Stockholders' Equity | $ | 8,518.2 | $ | 9,448.6 | $ | 9,574.9 | $ | 8,968.0 | |||||||
Excluding: | |||||||||||||||
Net Unrealized Gain (Loss) on Securities and Net Gain on Hedges | (90.7 | ) | 848.1 | 890.1 | 768.1 | ||||||||||
Northwind Capital | 954.9 | 872.2 | 912.2 | 862.6 | |||||||||||
Equity, As Adjusted | 7,654.0 | 7,728.3 | 7,772.6 | 7,337.3 | |||||||||||
Debt, As Adjusted | 2,831.7 | 2,743.2 | 2,742.3 | 2,744.4 | |||||||||||
Total Adjusted Capital | $ | 10,485.7 | $ | 10,471.5 | $ | 10,514.9 | $ | 10,081.7 | |||||||
Leverage Ratio | 27.0 | % | 26.2 | % | 26.1 | % | 27.2 | % | |||||||
16. 7