Unum 2010 Annual Report Download - page 37

Unum 2010 Annual Report
35
GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in income tax returns. The evaluation of a tax position is a two step process. The first step is
to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the
position. The second step is to measure a position that satisfies the recognition threshold at the largest amount of benefit that is greater
than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more likely than not
threshold but that now satisfy the recognition threshold are recognized in the first subsequent financial reporting period in which that
threshold is met. Previously recognized tax positions that no longer meet the more likely than not recognition threshold are derecognized
in the first subsequent financial reporting period in which that threshold is no longer met. If a previously recognized tax position is settled
for an amount that is different from the amount initially measured, the difference will be recognized as a tax benefit or expense in the
period the settlement is effective. We believe that tax positions have been reected in our nancial statements at appropriate amounts in
conformity with GAAP.
See Note 6 of the “Notes to Consolidated Financial Statements” for further discussion.
Contingent Liabilities
On a quarterly basis, we review relevant information with respect to litigation and contingencies to be reected in our consolidated
financial statements. An estimated loss is accrued when it is probable that a liability has been incurred and the amount of the loss can be
reasonably estimated. It is possible that our results of operations or cash ows in a particular period could be materially affected by an
ultimate unfavorable outcome of pending litigation or regulatory matters depending, in part, on our results of operations or cash ows for
the particular period. See Note 13 of the “Notes to Consolidated Financial Statements” for further discussion.
Consolidated Operating Results
Year Ended December 31
(in millions of dollars) 2010 % Change 2009 % Change 2008
Revenue
Premium Income $ 7,431.4 (0.6)% $ 7,475.5 (4.0)% $7,783.3
Net Investment Income 2,495.5 6.3 2,346.6 (1.8) 2,389.0
Net Realized Investment Gain (Loss) 24.7 111.1 11.7 102.5 (465.9)
Other Income 241.6 (6.1) 257.2 (6.8) 275.9
Total Revenue 10,193.2 1.0 10,091.0 1.1 9,982.3
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 6,354.1 1.0 6,291.6 (5.1) 6,626.4
Commissions 855.4 2.2 837.1 (1.9) 853.3
Interest and Debt Expense 141.8 13.1 125.4 (20.0) 156.7
Deferral of Acquisition Costs (607.7) 2.4 (593.6) 0.5 (590.9)
Amortization of Deferred Acquisition Costs 547.1 4.0 526.2 1.4 519.1
Compensation Expense 776.3 (2.1) 793.3 2.7 772.6
Other Expenses 794.9 (2.9) 818.7 (0.3) 821.1
Total Benefits and Expenses 8,861.9 0.7 8,798.7 (3.9) 9,158.3
Income Before Income Tax 1,331.3 3.0 1,292.3 56.8 824.0
Income Tax 445.2 1.3 439.7 62.4 270.8
Net Income $ 886.1 3.9 $ 852.6 54.1 $ 553.2