Unum 2014 Annual Report Download - page 116
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114 UNUM • 2014 ANNUAL REPORT
Notes To Consolidated Financial Statements
We are the sole beneficiary of a special purpose entity which is consolidated in our financial statements. This entity is a securitized
asset trust containing a highly rated bond for principal protection and a private equity partnership investment which we contributed into
the trust at the time it was established. There are no restrictions on the assets held in this trust, and the trust is free to dispose of the assets
at any time. The fair values of the bond and partnership were $143.9 million and $1.4 million, respectively, as of December 31, 2014 and
$136.2 million and $4.4 million, respectively, as of December 31, 2013. The bond is reported as a component of fixed maturity securities,
and the partnership is reported as a component of other long-term investments in our consolidated balance sheets. At December 31, 2014,
we had no commitments to fund the underlying partnership, nor did we fund any amounts to the partnership during the years ended
December 31, 2014, 2013, and 2012.
Mortgage Loans
Our mortgage loan portfolio is well diversified by both geographic region and property type to reduce risk of concentration. All of our
mortgage loans are collateralized by commercial real estate. When issuing a new loan, our general policy is not to exceed a loan-to-value
ratio, or the ratio of the loan balance to the estimated fair value of the underlying collateral, of 75 percent. We update the loan-to-value
ratios at least every three years for each loan, and properties undergo a general inspection at least every two years. Our general policy
for newly issued loans is to have a debt service coverage ratio greater than 1.25 times on a normalized 25 year amortization period.
We update our debt service coverage ratios annually.
Mortgage loans by property type and geographic region are presented below.
December 31
2014 2013
(in millions of dollars) Carrying Amount Percent of Total Carrying Amount Percent of Total
Property Type
Apartment $ 110.1 5.9% $ 61.1 3.3%
Industrial 542.9 29.2 567.8 31.3
Office 794.0 42.8 776.5 42.8
Retail 409.6 22.1 409.7 22.6
Total $1,856.6 100.0% $1,815.1 100.0%
Region
New England $ 105.6 5.7% $ 100.9 5.6%
Mid-Atlantic 179.4 9.7 191.5 10.5
East North Central 210.6 11.4 244.3 13.5
West North Central 166.2 8.9 162.3 8.9
South Atlantic 453.6 24.4 447.7 24.7
East South Central 75.3 4.1 67.7 3.7
West South Central 215.6 11.6 190.9 10.5
Mountain 116.0 6.2 101.9 5.6
Pacific 334.3 18.0 307.9 17.0
Total $1,856.6 100.0% $1,815.1 100.0%