Unum 2007 Annual Report Download - page 71

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Unum 2007 Annual Report 69
Realized Investment Losses $10.0 Million or Greater from Sale of Fixed Maturity Securities
We had no individual realized investments losses $10.0 million or greater from the sale of fixed maturity securities during 2007.
During 2006, we recognized a loss of $13.1 million on the sale of securities issued by a U.S. based automotive parts supplier. In an
October 2005 press release, this company confirmed that due to accounting errors it would restate its previously released 2004 and first
and second quarter 2005 earnings and delay third and fourth quarter 2005 earnings releases. In a first quarter of 2006 press release, the
company reported third quarter 2005 results which were significantly below expectations and also withdrew guidance of positive free cash
flow for its fiscal year 2005. Trade creditors put into place more stringent credit terms in response to the weaker financial results, which
forced the company into bankruptcy in the first quarter of 2006. A portion of these securities had an investment-grade rating at the time
of purchase, and a portion was purchased after the securities had been downgraded to below-investment-grade in the second quarter
of 2001. At the time of sale, these securities had been continuously in an unrealized loss position for a period of greater than three years.
The circumstances of this investment have no impact on other investments.
During 2005, we recognized a loss of $14.6 million on the sale of securities issued by a major U.S. based automotive parts supplier.
These securities were investment-grade at the time of purchase but were downgraded to below-investment-grade in the first quarter of
2005. At the time of sale, these securities had been continuously in an unrealized loss position for a period of greater than 90 days but
less than 180 days. The circumstances of this investment have no impact on other investments.
Also during 2005, we recognized a loss of $12.6 million on the sale on securities issued by a major U.S. based automotive manufacturer.
These securities were investment-grade at the time of purchase but were downgraded to below-investment-grade in the third quarter
of 2005. At the time of sale, these securities had been continuously in an unrealized loss position for a period of less than 90 days. The
circumstances of this investment have no impact on other investments.
Asset Distribution
The following table provides the distribution of invested assets for the periods indicated. Ceded policy loans of $2.4 billion as of
December 31, 2007 and $3.2 billion as of December 31, 2006, which are reported on a gross basis in the consolidated balance sheets,
are excluded from the table below. Ceded policy loans declined during 2007 due to the surrender of a portion of our ceded corporate-owned
life insurance block of business. The investment income on ceded policy loans is not included in income. Therefore, the termination of this
fully ceded business had no impact on our net investment income.
Distribution of Invested Assets
December 31
2007 2006
Investment-Grade Fixed Maturity Securities 87.2% 89.0%
Below-Investment-Grade Fixed Maturity Securities 5.3 5.8
Mortgage Loans and Real Estate 2.8 2.6
Short-Term Investments 3.9 1.8
Other Invested Assets 0.8 0.8
Total 100.0% 100.0%