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Unum 2010 Annual Report
39
Reconciliation of Non-GAAP Financial Measures
We analyze our performance using non-GAAP financial measures which exclude certain items and the related tax thereon from net
income. We believe operating income or loss excluding realized investment gains and losses, which may be recurring, and the 2010 tax
charge to reect the impact of the tax law change, as previously discussed, is a better performance measure and a better indicator of the
profitability and underlying trends in our business.
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 ows 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.
The non-GAAP financial measures of “operating revenue,” “operating income” or “operating loss,” and “after-tax operating income”
differ from revenue, income (loss) before income tax, and net income 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 and certain tax
items. We measure performance excluding realized investment gains and losses and certain tax items 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 and certain tax items 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 operating revenue by segment to revenue, operating income by segment to net income, and after-tax operating
income to net income is as follows:
Year Ended December 31
(in millions of dollars) 2010 2009 2008
Operating Revenue by Segment $10,168.5 $10,079.3 $10,448.2
Net Realized Investment Gain (Loss) 24.7 11.7 (465.9)
Revenue $10,193.2 $10,091.0 $ 9,982.3
Operating Income by Segment $ 1,306.6 $ 1,280.6 $ 1,289.9
Net Realized Investment Gain (Loss) 24.7 11.7 (465.9)
Income Tax 445.2 439.7 270.8
Net Income $ 886.1 $ 852.6 $ 553.2
Year Ended December 31
2010 2009 2008
(in millions) per share* (in millions) per share* (in millions) per share*
After-tax Operating Income $880.6 $ 2.69 $852.4 $2.57 $ 857.3 $ 2.51
Net Realized Investment Gain (Loss) 24.7 0.08 11.7 0.04 (465.9) (1.36)
Income Tax (Benefit on Net Realized
Investment Gain (Loss) 9.0 0.03 11.5 0.04 (161.8) (0.47)
Tax Charge (10.2) (0.03) — — — —
Net Income $886.1 $ 2.71 $852.6 $2.57 $ 553.2 $ 1.62
*Assuming dilution