Unum 2008 Annual Report Download - page 87

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83

Net purchases of short-term investments increased during 2007 compared to 2006 as a result of the liquidity needed for our capital
redeployment plan previously discussed. During the fourth quarter of 2007, we issued $800.0 million of debt and invested the proceeds in
floating rate bonds and short-term investments. Short-term investments were used as an interim investment as we sought suitable floating
rate investments to support the floating rate debt. We also purchased short-term investments throughout 2007 as we anticipated the
funding needed for our common stock repurchase program.
Policy loans, as reported in our consolidated balance sheet, declined during 2007 in comparison to 2006 due to the surrender of a
portion of our ceded corporate-owned life insurance block of business. The termination of this fully ceded business had no impact on our
cash inflows or outflows.
The proceeds from dispositions in 2007 relate to the sale of GENEX.
Financing Cash Flows
Financing cash flows consist primarily of borrowings and repayments of debt, issuance or repurchase of common stock, and dividends
paid to stockholders. Net cash used by financing activities was $1,049.5 million for the year ended December 31, 2008 compared to net cash
provided of $181.2 million for the year ended December 31, 2007 and net cash used of $157.0 million for the year ended December 31, 2006.
During 2007, Unum Group’s board of directors authorized the repurchase of up to $700.0 million of Unum Group common stock. In
2008, we completed our share repurchase program and purchased 29.9 million shares of Unum Group common stock for $700.0 million.
During 2008, we retired the remaining $175.0 million of our 5.997% senior notes and we purchased and retired $17.8 million of our
outstanding 5.859% notes. At December 31, 2008, we held $190.5 million of short-term debt, $58.3 million of which was borrowed during
2008. The remaining $132.2 million represents debt previously classified as long-term but which now has a maturity date within one year
after the date of our balance sheet.
During 2008, we purchased and retired $36.6 million aggregate principal amount of our outstanding 6.85% notes due 2015.
During 2008, Tailwind Holdings made principal payments on its floating rate, senior secured non-recourse notes due 2036 of $10.0 million.
During 2008, Northwind Holdings made principal payments of $59.3 million on its floating rate, senior secured non-recourse notes due 2037.
During 2007, we received proceeds of approximately $800.0 million, less debt issuance costs of $15.1 million, from the issuance
of $800.0 million aggregate principal amount of debt by Northwind Holdings. We also repurchased and/or made principal payments of
$769.5 million aggregate principal amount of outstanding debt during 2007, for an aggregate cash outflow of $803.7 million including
the debt repurchase costs of $34.2 million.
During 2007, we received proceeds of approximately $300.0 million and issued 17.7 million shares of common stock upon the settlement
of the common stock purchase contract element of the 2004 units.
During 2006, we received proceeds of approximately $130.0 million, less debt issuance costs of $4.1 million, from the issuance of
$130.0 million aggregate principal amount of debt by Tailwind Holdings. We also repurchased and/or made principal payments of
$732.0 million aggregate principal amounts of outstanding debt during 2006, for an aggregate cash outflow of $749.9 million including
debt repurchase costs of $17.9 million.
During 2006, we received proceeds of approximately $575.0 million and issued 43.3 million shares of common stock upon the settlement
of the common stock purchase contract element of the 2003 units.
See “Debt” contained herein for further information.
Cash Available from Subsidiaries
Unum Group and certain of its intermediate holding company subsidiaries and/or nance subsidiaries depend on payments from
subsidiaries to pay dividends to stockholders, to pay debt obligations, and/or to pay expenses. These payments by our insurance and
non-insurance subsidiaries may take the form of interest payments on loans from the parent to a subsidiary, operating and investment
management fees, and/or dividends.