Unum 2007 Annual Report Download - page 82

Management’s Discussion and Analysis of
Financial Condition and Results of Operations
80 Unum 2007 Annual Report
In the second quarter of 2006, pursuant to a cash tender offer, we purchased and retired $50.0 million aggregate liquidation amount
of our 7.405% junior subordinated debt securities due 2038 and $250.0 million aggregate principal amount of our outstanding 7.625% notes
due 2011. In the fourth quarter of 2006, in open market transactions, we purchased $32.0 million of our outstanding 6.85% notes due 2015.
In February 2006, the scheduled remarketing of the senior note element of the 2003 units occurred, as stipulated by the terms of the
original offering, and we reset the interest rate on $575.0 million of senior notes due May 15, 2008 to 5.997%. We purchased $400.0 million
of the senior notes in the remarketing which were subsequently retired. In May 2006, we settled the purchase contract element of the
units by issuing 43.3 million shares of common stock. We received proceeds of approximately $575.0 million from the transaction.
During the fourth quarter of 2005, Unum Group repatriated $454.8 million in unremitted foreign earnings from its U.K. subsidiaries,
and as part of its repatriation plan, issued $400.0 million of 6.85% senior debentures due November 15, 2015 in a private offering. The
aggregate principal amount outstanding was $333.5 million at December 31, 2007.
In 2001, Unum Group issued $575.0 million of 7.625% senior notes due March 1, 2011. The aggregate principal amount outstanding
was $225.1 million at December 31, 2007.
In 2002, Unum Group completed two long-term offerings, issuing $250.0 million of 7.375% senior debentures due June 15, 2032 and
$150.0 million of 7.250% public income notes due June 15, 2032. The public income notes were called and retired in 2007 as previously
discussed. The 7.375% notes have an aggregate principal amount outstanding of $39.5 million at December 31, 2007.
In 1998, Unum Group completed public offerings of $200.0 million of 7.25% senior notes due March 15, 2028, $200.0 million of 7.0%
senior notes due July 15, 2018, and $250.0 million of 6.75% senior notes due December 15, 2028. None of these amounts have been
reduced other than the 6.75% notes, which have an aggregate principal amount outstanding of $166.4 million at December 31, 2007.
In 1998, Provident Financing Trust I (the trust) issued $300.0 million of 7.405% capital securities in a public offering. These capital
securities, which mature on March 15, 2038, are fully and unconditionally guaranteed by Unum Group, have a liquidation value of $1,000
per capital security, and have a mandatory redemption feature under certain circumstances. Unum Group issued 7.405% junior subordinated
deferrable interest debentures, which mature on March 15, 2038, to the trust in connection with the capital securities offering. The securities
issued by the trust have an aggregate principal amount outstanding of $226.5 million at December 31, 2007.
Unum Group has debt securities with an aggregate principal amount outstanding of $62.0 million which were initially issued in three
separate series in 1990, 1993, and 1996, pursuant to an indenture dated September 15, 1990. The notes are fixed maturity rate notes with
fixed maturity dates ranging between nine months to thirty years from the issuance date.
Unum Group has a shelf registration, which became effective in 2005, with the Securities and Exchange Commission 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 up to an aggregate of $1.0 billion. If utilized, the shelf registration will enable us to
raise funds from the offering of any individual security covered by the shelf registration as well as any combination thereof, subject to
market conditions and our capital needs.
See Note 9 of the “Notes to Consolidated Financial Statements” for additional information.