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UNUM • 2014 ANNUAL REPORT 65
Fixed Maturity Securities
The fair values and associated unrealized gains and losses of our fixed maturity securities portfolio, by industry classification,
are as follows:
Fixed Maturity Securities — By Industry Classification
As of December 31, 2014
(in millions of dollars)
Fair Value of Fair Value of
Fixed Maturity Fixed Maturity
Net Securities Gross Securities Gross
Unrealized with Gross Unrealized with Gross Unrealized
Classification Fair Value Gain Unrealized Loss Loss Unrealized Gain Gain
Basic Industry $ 2,666.8 $ 244.0 $ 366.4 $ 29.1 $ 2,300.4 $ 273.1
Capital Goods 3,946.5 523.0 113.8 4.1 3,832.7 527.1
Communications 3,110.4 502.5 106.4 3.0 3,004.0 505.5
Consumer Cyclical 1,284.9 172.6 24.7 0.4 1,260.2 173.0
Consumer Non-Cyclical 5,961.6 814.2 486.2 12.7 5,475.4 826.9
Energy 6,117.3 690.4 952.5 68.9 5,164.8 759.3
Financial Institutions 3,389.0 396.4 — — 3,389.0 396.4
Mortgage/Asset-Backed 2,431.8 206.9 29.9 0.1 2,401.9 207.0
Sovereigns 1,307.4 206.3 — — 1,307.4 206.3
Technology 1,211.8 93.5 282.1 3.6 929.7 97.1
Transportation 1,676.9 269.8 63.5 0.4 1,613.4 270.2
U.S. Government Agencies and Municipalities 3,360.0 631.5 51.0 1.6 3,309.0 633.1
Public Utilities 8,550.6 1,504.5 63.3 0.9 8,487.3 1,505.4
Redeemable Preferred Stocks 49.9 5.9 — — 49.9 5.9
Total $45,064.9 $6,261.5 $2,539.8 $124.8 $42,525.1 $6,386.3
Our investment portfolio has exposure to companies whose businesses are negatively impacted by lower oil and natural gas prices.
These include exploration and production companies, refineries, midstream and pipeline companies, and oilfield service businesses. The
recent sharp drop in the price of oil is putting pressure on the earnings and cash flows of some of these businesses. The midstream and
pipeline subsector represents our largest exposure within the energy sector. Demand for products in this subsector tends to be more
correlated to product volume sales as opposed to the commodity price. We have very little exposure to the oilfield service subsector where
demand for products is highly correlated with oil and gas prices. The degree to which a business is affected by oil and gas prices can vary
greatly depending on, among other things, its energy subsector, exposure to different types of oil and gas within a subsector, geographic
locations, cost structure flexibility, capital structure, and hedging policies. The majority of our energy sector holdings are investment-grade
fixed maturity securities. We perform stress testing on all energy-related investments in our portfolios, using different oil and gas price
scenarios, and we continue to closely monitor this situation. Currently, we expect downward ratings pressure on some of our securities,
but we do not expect material losses in our energy sector investments.