Unum 2008 Annual Report Download - page 51

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

47

In the following segment financial data and discussions of segment results, “operating revenue” excludes net realized investment
gains and losses. “Operating income” or “operating loss” excludes net realized investment gains and losses and income tax. These are
considered non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company’s performance, financial
position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable
measure calculated and presented in accordance with GAAP.
These non-GAAP financial measures of “operating revenue” and “operating income” or “operating loss” differ from revenue and income
(loss) from continuing operations before income tax as presented in our consolidated operating results and in income statements prepared
in accordance with GAAP due to the exclusion of before tax realized investment gains and losses. We measure segment performance for
purposes of Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information,
excluding realized investment gains and losses because we believe that this performance measure is a better indicator of the ongoing
businesses and the underlying trends in the businesses. Our investment focus is on investment income to support our insurance liabilities as
opposed to the generation of realized investment gains and losses, and a long-term focus is necessary to maintain profitability over the life
of the business. Realized investment gains and losses depend on market conditions and do not necessarily relate to decisions regarding the
underlying business of our segments. However, income or loss excluding realized investment gains and losses does not replace net income
or net loss as a measure of overall profitability. We may experience realized investment losses, which will affect future earnings levels since
our underlying business is long-term in nature and we need to earn the assumed interest rates in our liabilities.
A reconciliation of total operating revenue by segment to total consolidated revenue and total operating income by segment to
consolidated net income is as follows:
Year Ended December 31
(in millions of dollars)  2007 2006
  $10,585.1 $10,533.1
Net Realized Investment Gain (Loss)  (65.2) 2.2
   $10,519.9 $10,535.3
   $ 1,062.4 $ 463.2
Net Realized Investment Gain (Loss)  (65.2) 2.2
Income Tax  324.8 61.8
Income from Discontinued Operations 6.9 7.4
    $ 679.3 $ 411.0
As previously noted, included in the before-tax operating income by segment shown above are before-tax charges of $53.0 million
and $411.4 million in 2007 and 2006, respectively, related to the claim reassessment process and $18.5 million in 2006 for the broker
compensation settlement. Also as previously discussed, operating revenue and operating income by segment would have been higher in
2008 by approximately $86.7 million and $24.2 million, respectively, and higher in 2006 by approximately $86.7 million and $21.3 million,
respectively, if the results for our U.K. operations had been translated at a constant exchange rate of 2.004, the rate for 2007.