This document provides reconciliations of non-GAAP financial measures for Unum Group for 2005. It includes 3 summaries:
1) Adjustments made to Unum Limited segment operating income before tax for 2005 to exclude a one-time gain.
2) Adjustments made to operating income and earnings per share for Q4 2005 to exclude certain one-time items.
3) Adjustments made to net income for 2005 full year to exclude one-time items like realized investment gains/losses and settlement costs in order to determine an adjusted return on equity.
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Reconciliation of non-GAAP operating income
1. RECONCILIATION OF NON-GAAP MEASURES
Twelve Months
Ended
December 31, 2005
(in millions)
Unum Limited Segment Operating Income before Income Tax and Net
Realized Investment Gain (Loss), As Reported $ 187.7
Exclude Gain on Sale of Netherlands Branch 5.7
As Adjusted $ 182.0
Three Months Ended December 31, 2005
Before Tax After Tax
(in millions) (in millions) Per Share*
Operating Income excluding Net Realized Investment Gain (Loss) $ 191.5 $ 136.0 $ 0.43
Exclude:
Contract Termination Fee (9.1) (5.9) (0.02)
Litigation Costs (6.8) (4.4) (0.01)
Income Tax Benefit related to U.K. Repatriation - 3.3 0.01
Income Tax Benefit for U.K. Group Tax Relief - 5.5 0.02
As Adjusted $ 207.4 $ 137.5 $ 0.43
* Assuming Dilution
Three Months Ended December 31
2004
Multistate
Market
Conduct
Examination SFAS 91
2005 As Reported Settlement Adjustment As Adjusted
(in millions) (in millions)
Operating Income by Segment before Income Tax and
Net Realized Investment Gain (Loss)
U.S. Brokerage
Group Income Protection $ 13.6 $ (88.6) $ (116.7) $ 9.9 $ 18.2
Group Life and Accidental Death and Dismemberment 43.5 62.1 - 4.4 57.7
Supplemental and Voluntary 46.8 42.2 (1.7) 3.3 40.6
Total U.S. Brokerage 103.9 15.7 (118.4) 17.6 116.5
Unum Limited 49.3 46.7 - - 46.7
Colonial 38.7 40.0 - 1.7 38.3
Individual Income Protection - Closed Block 33.7 37.8 (8.6) 13.3 33.1
Other 8.9 8.3 - 1.0 7.3
Corporate (43.0) (31.5) - 0.1 (31.6)
Operating Income by Segment 191.5 117.0 $ (127.0) $ 33.7 $ 210.3
Income Tax (Benefit) on Operating Income 55.5 (0.7)
Operating Income, Net of Income Tax 136.0 117.7
Net Realized Investment Gain 2.4 25.8
Income Tax on Net Realized Investment Gain (0.9) (9.0)
Net Income $ 137.5 $ 134.5
Three Months Ended Three Months Ended
December 31, 2005 September 30, 2005
Percent of Percent of
(in millions) Premium Income (in millions) Premium Income
Group Income Protection
Premium Income $ 629.7 $ 626.0
Benefits and Change in Reserves for Future Benefits $ 591.1 93.9% $ 606.0 96.8%
Exclude California Settlement Agreement and Related Matters - 27.3
As Adjusted $ 591.1 93.9% $ 578.7 92.4%
Three Months Ended Three Months Ended
December 31, 2005 December 31, 2004
Percent of Percent of
(in millions) Premium Income (in millions) Premium Income
Colonial
Premium Income $ 200.5 $ 189.5
Benefits and Change in Reserves for Future Benefits $ 113.5 56.6% $ 103.5 54.6%
Exclude Litigation Costs 3.5 -
As Adjusted $ 110.0 54.9% $ 103.5 54.6%
Operating Expenses $ 38.6 19.3% $ 36.4 19.2%
Exclude Litigation Costs 1.3 -
As Adjusted $ 37.3 18.6% $ 36.4 19.2%
2. RECONCILIATION OF NON-GAAP MEASURES
As of December 31
2005 2004 Average
(in millions) (in millions) Per Share
Per Share (in millions)
Book Value
Total Stockholders' Equity $ 7,363.9 $ 24.66 $ 7,224.1 $ 24.36
Exclude Net Unrealized Gain on Securities 1,040.7 3.49 1,309.8 4.41
Exclude Net Gain on Cash Flow Hedges 273.3 0.91 236.9 0.80
As Adjusted $ 6,049.9 $ 20.26 $ 5,677.4 $ 19.15 $ 5,863.6
Twelve Months
Ended
December 31, 2005
Net Income $ 513.6
Exclude:
Net Realized Investment Loss, Net of Tax (4.3)
California Settlement Agreement and Related Matters, Net of Tax (51.6)
1Q05 Income Tax Liabilities 32.0
3Q05 Income Tax Liabilities 10.8
Gain on Sale of Netherlands Branch, Net of Tax 4.0
As Adjusted $ 522.7
Return on Equity (as a percentage of average Stockholders' Equity
excluding SFAS 115 and 133 adjustments) 8.9%