Unum 2013 Annual Report Download - page 158

Download and view the complete annual report

Please find page 158 of the 2013 Unum annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 174

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174

156 / UNUM 2013 ANNUAL REPORT
Notes To Consolidated Financial Statements
The Corporate segment includes investment income on corporate assets not specifically allocated to a line of business, interest
expense on corporate debt other than non-recourse debt, and certain other corporate income and expense not allocated to a line of business.
We measure and analyze our segment performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical
measure of a company’s performance, financial position, or cash flows 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” and “operating income” or “operating loss” differ from total revenue and income before income tax as presented in
our consolidated statements of income due to the exclusion of net realized investment gains and losses, non-operating retirement-related
gains or losses, and certain other items as specified in the reconciliations below. We believe operating revenue and operating income or
loss are better performance measures and better indicators of the revenue and profitability and underlying trends in our business. Realized
investment gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of
our segments. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of realized
investment gains or losses. Although we may experience realized investment gains or losses which will affect future earnings levels,
a long-term focus is necessary to maintain profitability over the life of the business since our underlying business is long-term in nature,
and we need to earn the interest rates assumed in calculating our liabilities. The amortization of prior period actuarial gains or losses,
a component of the net periodic benefit cost for our pensions and other postretirement benefit plans, is driven by market performance as
well as plan amendments and is not indicative of the operational results of our businesses. We believe that excluding the amortization of
prior period gains or losses from operating income or loss provides investors with additional information for comparison and analysis of our
operating results. Although we manage our non-operating retirement-related gains or losses separately from the operational performance
of our business, these gains or losses impact the overall profitability of our company and have historically increased or decreased over time,
depending on plan amendments and market conditions and the resulting impact on the actuarial gains or losses in our pensions and other
postretirement benefit plans.
We may at other times exclude certain other items from our discussion of financial ratios and metrics in order to enhance the
understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication
that similar items may not recur and does not replace net income or net loss as a measure of our overall profitability.
A reconciliation of “operating revenue” to total revenue and “operating income” to income before income taxes is as follows:
Year Ended December 31
(in millions of dollars) 2013 2012 2011
Operating Revenue $10,347.0 $10,459.2 $10,282.9
Net Realized Investment Gain (Loss) 6.8 56.2 (4.9)
Total Revenue $10,353.8 $10,515.4 $10,278.0
Operating Income $ 1,241.8 $ 1,239.7 $ 1,323.2
Net Realized Investment Gain (Loss) 6.8 56.2 (4.9)
Non-operating Retirement-related Loss (32.9) (46.4) (31.9)
Unclaimed Death Benefits Reserve Increase for Unum US (75.4) — —
Unclaimed Death Benefits Reserve Increase for Colonial Life (20.1) — —
Group Life Waiver of Premium Benefit Reserve Reduction for Unum US 85.0 — —
Deferred Acquisition Costs Impairment and
Reserve Charges for Long-term Care Closed Block — — (769.6)
Reserve Charge for Individual Disability Closed Block — — (183.5)
Income Before Income Tax $ 1,205.2 $ 1,249.5 $ 333.3