Unum 2014 Annual Report Download - page 65
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UNUM • 2014 ANNUAL REPORT 63
Year Ended December 31, 2014 Compared with Year Ended December 31, 2013
Net investment income increased in 2014 relative to 2013 due to higher levels of invested assets, partially offset by a decrease in yield
on invested assets. Also impacting the year over year comparison for all years presented is the negative impact on reported net investment
income attributable to the amortization of tax credit partnerships, the amounts of which are generally offset in income tax expense by a
lower income tax rate due to the tax benefits recognized as a result of these investments. An accounting guidance update which is effective
January 1, 2015 permits us to account for tax credit partnerships using proportional amortization and allows us to recognize that amortization
as a component of income tax expense rather than as negative net investment income. See Note 1 of the “Notes to Consolidated Financial
Statements” contained herein for discussion of this update.
Other income declined in 2014 relative to the prior year due primarily to the recognition of income in 2013 related to a settlement
of an appeal to the IRS for tax years 2005 to 2006.
Interest and other expenses were higher in 2014 compared to 2013 due to $13.2 million of costs related to the 2014 retirement of a
portion of debt and due to increased interest expense on debt, partially offset by a higher level of retirement-related costs allocated from
Corporate to our other segments.
Year Ended December 31, 2013 Compared with Year Ended December 31, 2012
Net investment income was lower in 2013 compared to 2012 due to a decrease in the yield on invested assets, a decrease in reported
investment income attributable to tax credit partnerships, and lower short-term interest rates.
Other income was higher in 2013 compared to 2012 due primarily to the IRS settlement.
Interest and other expenses were higher in 2013 compared to 2012 due primarily to an increase in interest expense on debt and a
higher level of expense accruals in 2013 relative to the prior year.
Segment Outlook
We are currently holding capital at our insurance subsidiaries and holding companies at levels that exceed our long-term requirements,
and we expect to continue to generate excess capital on an annual basis through our statutory earnings. While we intend to maintain our
disciplined approach to risk management, we believe we are well positioned with substantial flexibility to preserve our capital strength and
at the same time explore opportunities to deploy the excess capital that is generated.