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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
70 UNUM 2012 ANNUAL REPORT
European Fixed Maturity Securities Exposure — By Country
As of December 31, 2012
(in millions of dollars)
Fair Value Amortized Cost
Greece $ 54.1 $ 50.2
Ireland 67.5 66.3
Italy 243.7 235.3
Portugal 49.0 46.8
Spain 241.2 223.1
Total $655.5 $621.7
We have no unfunded commitments to issuers domiciled in these countries. Further discussion on our exposure to each country
is as follows:
Greece
We have no direct exposure to Greek financial institutions. Our singular holding domiciled in Greece is a geographically diversified
company, generates less than 10 percent of its revenue from Greece, and was rated investment-grade as of December 31, 2012. The
company aggregates cash and manages its debt payments outside the country in which it is domiciled, which we believe enables the
company to place low reliance on the banking system of Greece. The company intends to change its domicile to Switzerland, pending
required shareholder approval. As of December 31, 2012, this company was current on its obligations to us, and we believe it will continue
to meet its debt obligations.
Ireland
We have no direct exposure to Irish financial institutions. In November 2010, Ireland received a support package valued at €85 billion
from the International Monetary Fund/European Union based on its plan of recovery. Thus far, Ireland appears committed to fiscal
consolidation. However, we believe there are risks associated with the austerity and recessionary pressures. As of December 31, 2012,
all of our Irish investments were current on their obligations to us, and we believe they will continue to meet their debt obligations.
For those securities in an unrealized loss position, we have the intent to hold these investments to recovery in value. As a result,
we did not recognize any other-than-temporary impairment losses on these investments as of December 31, 2012.
Italy
We have no direct exposure to Italian financial institutions. We believe there are risks associated with the debt sustainability of Italy
given its political and recessionary pressures. As of December 31, 2012, all of our Italian investments were current on their obligations
to us, and we believe they will continue to meet their debt obligations. For those securities in an unrealized loss position, we have the
intent to hold these investments to recovery in value. As a result, we did not recognize any other-than-temporary impairment losses on
these investments as of December 31, 2012.
Portugal
We have no direct exposure to Portuguese financial institutions. In May 2011, Portugal received a support package valued at
€78 billion from the International Monetary Fund/European Union. We believe there is risk that Portugal will be unable to achieve the
deficit reduction targets set out in this loan agreement, and future aid may be required. As of December 31, 2012, our singular holding
domiciled in Portugal is a geographically diversified utility company that was downgraded to below-investment-grade during the first
quarter of 2012. As of December 31, 2012, this company was current on its obligations to us, and we believe it will continue to meet its
debt obligations.