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72 UNUM • 2014 ANNUAL REPORT
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Credit Facility
In 2013, we entered into a five-year, $400 million unsecured revolving credit facility. Under the terms of the agreement, we may
request that the credit facility be increased up to $600 million. Borrowings under the credit facility are for general corporate uses and are
subject to financial covenants, negative covenants, and events of default that are customary. The credit facility provides for borrowing at an
interest rate based either on the prime rate or LIBOR. In addition, the credit facility provides for the issuance of letters of credit subject to
certain terms and limitations. At December 31, 2014, letters of credit totaling $2.1 million had been issued from the credit facility, but there
was no borrowed amount outstanding. Our credit facility’s financial covenants contain provisions regarding our leverage and net worth. We
do not anticipate any violation of these covenants. However, if economic conditions worsen and we incur unexpected losses, we could
violate certain of the financial covenants imposed by the credit facility and lose access to available funds or lines of credit through the
facility. While maintenance of the unsecured, revolving credit facility provides a valuable source of contingent liquidity, we believe
operating cash flows are sufficient to support our short-term liquidity needs.
Shelf Registration
We filed a shelf registration with the Securities and Exchange Commission in 2014 to issue various types of securities, including
common stock, preferred stock, debt securities, depository shares, stock purchase contracts, units and warrants, or preferred securities
of wholly-owned finance trusts. The shelf registration enables us to raise funds from the offering of any securities covered by the shelf
registration as well as any combination thereof, subject to market conditions and our capital needs.
See Note 8 of the “Notes to Consolidated Financial Statements” contained herein for additional information on our debt.
Commitments
The following table summarizes contractual obligations and our reinsurance recoverable by period as of December 31, 2014:
In 1 Year After 1 Year After 3 Years
(in millions of dollars) Total or Less up to 3 Years up to 5 Years After 5 Years
Payments Due
Short-term Debt $ 161.0 $ 161.0 $ — $ — $ —
Long-term Debt 4,321.8 136.1 597.9 412.8 3,175.0
Policyholder Liabilities 43,358.3 4,685.3 6,864.5 5,394.8 26,413.7
Pension and OPEB 725.7 19.5 38.2 37.3 630.7
Miscellaneous Liabilities 687.8 613.6 18.0 11.8 44.4
Operating Leases 227.1 40.2 75.6 35.7 75.6
Purchase Obligations 256.7 254.6 2.1 — —
Total $49,738.4 $5,910.3 $7,596.3 $5,892.4 $30,339.4
Receipts Due
Reinsurance Recoverable $ 7,704.9 $ 348.9 $ 605.5 $ 615.3 $ 6,135.2