Unum 2008 Annual Report Download - page 131

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Short-term Debt
In 2008, we purchased and retired $17.8 million of our outstanding 5.859% notes and $175.0 million of our 5.997% notes.
Interest and Debt Expense
Interest paid on long-term and short-term debt and related securities during 2008, 2007, and 2006 was $157.3 million, $184.1 million,
and $200.7 million, respectively.
The cost related to early retirement of debt during 2008, 2007, and 2006 decreased income approximately $0.4 million, $58.8 million,
and $25.8 million, respectively, before tax, or $0.3 million, $38.3 million, and $16.9 million, respectively, after tax.
Credit Facility
In 2008, we entered into $250.0 million unsecured revolving credit facility. Borrowings under the facility are for general corporate uses
and are subject to financial covenants, negative covenants, and events of default that are customary. The facility has a 364 day tenor and
a one year term out option. The facility provides for interest rates based on either the prime rate or LIBOR, as adjusted. Within this facility is a
$100.0 million letter of credit sub-limit. At December 31, 2008, there were no amounts outstanding on the facility.
Shelf Registration
We have a shelf registration, which became effective in December 2008, 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. 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.
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We sponsor several defined benefit pension and postretirement plans for our employees, including non-qualified pension plans. The
U.S. plans comprise the majority of our total benefit obligation and benefit cost. We maintain a separate defined benefit plan for eligible
employees in our U.K. operation. The U.K. defined benefit pension plan was closed to new entrants on December 31, 2002.
Information presented as follows for our non U.S. plans previously included plans for the employees of our Canadian branch operation
which was sold in 2004. In the third quarter of 2007, we terminated the Canadian defined benefit pension plans which were frozen in 2004.
The termination of these plans resulted in a reduction in our pension assets and pension liabilities of $15.1 million and a settlement cost of
$0.3 million recognized in our net periodic benefit cost for 2007.
As a result of the sale of GENEX, we froze the pension plan benefits for the employees of GENEX during the first quarter of 2007,
which resulted in a $7.2 million reduction in our pension liability and a curtailment loss of $0.2 million recognized in our net periodic
benefit cost for 2007. The curtailment loss was comprised of a $0.6 million increase in our pension liability related to a termination benefit
and a $0.4 million recognition of unamortized prior service credits. As of the date of the curtailment, we remeasured our U.S. pension plan
obligation. The weighted average discount rate assumption used in the measurement of our U.S. pension plan benefit obligation changed
from 6.10 percent as of our December 31, 2006 measurement date to 5.90 percent as of the measurement date of March 1, 2007. No other
assumptions were materially changed. As a result of the remeasurement, our pension plan liability increased $35.6 million. The net effect
of the curtailment and remeasurement was an increase in our pension plan liability of $29.0 million, a decrease in deferred income tax of
$10.1 million, a decrease in income from discontinued operations of $0.2 million, and a decrease in accumulated other comprehensive
income of $18.7 million.