Unum 2010 Annual Report Download - page 152

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Notes To Consolidated Financial Statements
150
Unum
2010
We report goodwill in our Unum US segment and in our Unum UK segment, which are the segments expected to benefit from the
originating business combinations. At December 31, 2010 and 2009, goodwill was $201.2 million and $201.6 million, respectively, with
$190.0 million attributable to Unum US and the remainder attributable to Unum UK. The decrease during 2010 is due entirely to the
uctuation in the British pound sterling to dollar exchange rate.
Stockholders’ equity is allocated to the operating segments on the basis of an internal allocation formula that reects the volume and
risk components of each operating segment’s business and aligns allocated equity with our target capital levels for regulatory and rating
agency purposes. We modify this formula periodically to recognize changes in the views of capital requirements.
Note 13. Commitments and Contingent Liabilities
Commitments
We have noncancelable lease obligations on certain office space and equipment. As of December 31, 2010, the aggregate net
minimum lease payments were $220.1 million payable as follows: $25.8 million in 2011, $25.1 million in 2012, $22.9 million in 2013,
$19.8 million in 2014, $15.6 million in 2015, and $110.9 million thereafter. Rental expense for the years ended December 31, 2010, 2009,
and 2008 was $29.3 million, $30.1 million, and $34.5 million, respectively.
At December 31, 2010, we had unfunded commitments of $73.0 million for certain of our private equity partnerships, $1.9 million for
underlying partnerships in our investment in a special purpose entity, $29.9 million for certain private placement fixed maturity securities,
and $42.9 million for certain mortgage loans. The funds are not legally binding at December 31, 2010 and may or may not be funded during
the term of the investments. In addition, we have a legally binding unfunded commitment of $169.9 million, which is recognized as a
liability in our consolidated balance sheets, to fund tax credit partnership investments.
Contingent Liabilities
We are a defendant in a number of litigation matters. In some of these matters, no specified amount is sought. In others, very large
or indeterminate amounts, including punitive and treble damages, are asserted. There is a wide variation of pleading practice permitted in
the United States courts with respect to requests for monetary damages, including some courts in which no specified amount is required
and others which allow the plaintiff to state only that the amount sought is sufficient to invoke the jurisdiction of that court. Further, some
jurisdictions permit plaintiffs to allege damages well in excess of reasonably possible verdicts. Based on our extensive experience and that
of others in the industry with respect to litigating or resolving claims through settlement over an extended period of time, we believe that
the monetary damages asserted in a lawsuit or claim bear little relation to the merits of the case, or the likely disposition value. Therefore,
the specific monetary relief sought is not stated.
Unless indicated otherwise in the descriptions below, reserves have not been established for litigation and contingencies. An estimated
loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
In the disclosures that follow about litigation, we refer to the name of the company specified in the original complaint, following the
practice in the courts. Therefore, references to UnumProvident Corporation should be understood as references to Unum Group.