TABLE OF CONTENTS



		Page
	Cautionary Statement Regarding Forward-Looking Statements	1

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	3

	Consolidated Balance Sheets at ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	3

	Consolidated Statements of ~~Operations~~Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	5

	Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	6

	Consolidated Statements of Stockholders' Equity for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	7

	Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	7064

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~107~~98

Item 4.	Controls and Procedures	~~107~~98

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	~~108~~99

Item 1A.	Risk Factors	~~108~~99

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~108~~99

Item 6.	Exhibits	~~109~~100

	Signatures	~~110~~101

Cautionary Statement Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the Act) provides a "safe harbor" to encourage companies to provide prospective information, as long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. Certain information contained in this Quarterly Report on Form 10-Q (including certain statements in the consolidated financial statements and related notes and Management's Discussion and Analysis), or in any other written or oral statements made by us in communications with the financial community or contained in documents filed with the Securities and Exchange Commission (SEC), may be considered forward-looking statements within the meaning of the Act. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments. Forward-looking statements speak only as of the date made. We undertake no obligation to update these statements, even if made available on our website or otherwise. These statements may be made directly in this document or may be made part of this document by reference to other documents filed by us with the SEC, a practice which is known as "incorporation by reference." You can find many of these statements by looking for words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "plans," "assumes," "intends," "projects," "goals,” "objectives," or similar expressions in this document or in documents incorporated herein.

These forward-looking statements are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. We caution readers that the following factors, in addition to other factors mentioned from time to time, may cause actual results to differ materially from those contemplated by the forward-looking statements:

Sustained periods of low interest rates.

Fluctuation in insurance reserve liabilities and claim payments due to changes in claim incidence, recovery rates, mortality and morbidity rates, and policy benefit offsets due to, among other factors, the rate of unemployment and consumer confidence, the emergence of new diseases, epidemics, or pandemics, new trends and developments in medical treatments, the effectiveness of our claims operational processes, and changes in governmental programs.

Unfavorable economic or business conditions, both domestic and foreign, that may result in decreases in sales, premiums, or persistency, as well as unfavorable claims activity.

Changes in or interpretations of laws and regulations, including tax laws and regulations.

Investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our liabilities.

A cyber attack or other security breach could result in the unauthorized acquisition of confidential data.

The failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cyber attack, or other event.

~~Execution risk related~~Investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our ~~technology needs.~~liabilities.

Increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors.

Changes in our financial strength and credit ratings.

Our ability to execute on our technology systems upgrades or replacements.

Damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, external events, and/or inadequate or failed internal controls and procedures.

Actual experience in the broad array of our products that deviates from our assumptions used in pricing, underwriting, and reserving.

Changes in accounting standards, practices, or policies.

Effectiveness of our risk management program.

Contingencies and the level and results of litigation.

Availability of reinsurance in the market and the ability of our reinsurers to meet their obligations to us.

Ineffectiveness of our derivatives hedging programs due to changes in the economic environment, counterparty risk, ratings downgrades, capital market volatility, changes in interest rates, and/or regulation.

Fluctuation in foreign currency exchange rates.

Ability to generate sufficient internal liquidity and/or obtain external financing.

Recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets.

Terrorism, both within the U.S. and abroad, ongoing military actions, and heightened security measures in response to these types of threats.

For further discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

Unum Group and Subsidiaries


	September 30		December 31		June 30		December 31
	2018		2017		2019		2018
	(in millions of dollars)				(in millions of dollars)
	(Unaudited)				(Unaudited)
Assets

Investments
Fixed Maturity Securities - at fair value (amortized cost: $39,913.2; $39,780.5)	$	43,071.3	$	45,457.8
Fixed Maturity Securities - at fair value (amortized cost: $40,804.8; $40,275.2)					$	46,440.2	$	43,011.7
Mortgage Loans	2,222.0		2,213.2		2,218.9		2,295.0
Policy Loans	3,720.2		3,571.1		3,633.1		3,729.9
Other Long-term Investments	694.2		646.8		735.0		702.9
Short-term Investments	1,238.2		1,155.1		1,367.2		968.1
Total Investments	50,945.9		53,044.0		54,394.4		50,707.6

Other Assets
Cash and Bank Deposits	214.2		77.4		60.8		94.0
Accounts and Premiums Receivable	1,693.0		1,665.7		1,716.4		1,615.5
Reinsurance Recoverable	4,684.0		4,879.2		4,752.8		4,662.4
Accrued Investment Income	683.0		690.1		803.2		690.6
Deferred Acquisition Costs	2,276.9		2,184.6		2,301.9		2,309.4
Goodwill	346.0		338.6		350.1		350.3
Property and Equipment	521.0		504.8		556.1		546.9
Income Tax Receivable	19.0		—
Deferred Income Tax	157.4		—		—		109.9
Other Assets	709.4		628.7		908.0		789.0

Total Assets	$	62,249.8	$	64,013.1	$	65,843.7	$	61,875.6

See notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS - Continued

Unum Group and Subsidiaries


	September 30			December 31			June 30			December 31
	2018			2017			2019			2018
	(in millions of dollars)						(in millions of dollars)
	(Unaudited)						(Unaudited)
Liabilities and Stockholders' Equity

Liabilities
Policy and Contract Benefits	$	1,674.1		$	1,605.2		$	1,751.4		$	1,695.7
Reserves for Future Policy and Contract Benefits	45,092.7			45,601.6			47,138.3			44,841.9
Unearned Premiums	428.0			373.1			448.3			363.3
Other Policyholders’ Funds	1,551.4			1,595.0			1,597.0			1,594.8
Income Tax Payable	—			2.9			250.2			24.0
Deferred Income Tax	—			199.0			37.0			—
Short-term Debt	—			199.9
Long-term Debt	2,983.5			2,738.4			3,341.2			2,971.3
Payables for Collateral on Investments	238.2			396.2
Other Liabilities	1,763.7			1,726.9			1,827.2			1,762.8

Total Liabilities	53,731.6			54,438.2			56,390.6			53,253.8

Commitments and Contingent Liabilities - Note 11

Stockholders' Equity
Common Stock, $0.10 par
Authorized: 725,000,000 shares
Issued: 305,069,982 and 304,448,032 shares	30.5			30.5
Issued: 305,715,150 and 305,104,548 shares							30.6			30.5
Additional Paid-in Capital	2,314.3			2,303.3			2,335.6			2,321.7
Accumulated Other Comprehensive Income (Loss)	(868.5		)	127.5
Accumulated Other Comprehensive Loss							(242.5		)	(814.2		)
Retained Earnings	9,670.8			9,542.2			10,308.9			9,863.1
Treasury Stock - at cost: 86,347,280 and 81,900,950 shares	(2,628.9		)	(2,428.6		)
Treasury Stock - at cost: 96,139,958 and 90,551,513 shares							(2,979.5		)	(2,779.3		)

Total Stockholders' Equity	8,518.2			9,574.9			9,453.1			8,621.8

Total Liabilities and Stockholders' Equity	$	62,249.8		$	64,013.1		$	65,843.7		$	61,875.6

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME (UNAUDITED)

Unum Group and Subsidiaries


	Three Months Ended September 30						Nine Months Ended September 30
	2018			2017			2018			2017			Three Months Ended June 30						Six Months Ended June 30
	(in millions of dollars, except share data)												2019			2018			2019			2018
				As Adjusted						As Adjusted			(in millions of dollars, except share data)
Revenue
Premium Income	$	2,251.8		$	2,153.6		$	6,722.8		$	6,438.7		$	2,343.1		$	2,221.0		$	4,681.8		$	4,471.0
Net Investment Income	619.2			609.0			1,845.1			1,831.9			624.9			623.6			1,219.6			1,225.9
Realized Investment Gain (Loss)
Realized Investment Loss
Other-Than-Temporary Impairment Loss on Fixed Maturity Securities	—			—			(1.0		)	—			—			—			—			(1.0		)
Net Realized Investment Gain, Excluding Other-Than-Temporary Impairment Loss on Fixed Maturity Securities	6.7			9.8			2.9			28.9
Net Realized Investment Gain	6.7			9.8			1.9			28.9
Net Realized Investment Loss, Excluding Other-Than-Temporary Impairment Loss on Fixed Maturity Securities													(7.3		)	(2.6		)	(6.2		)	(3.8		)
Net Realized Investment Loss													(7.3		)	(2.6		)	(6.2		)	(4.8		)
Other Income	50.1			46.7			147.9			148.1			56.0			48.3			109.1			97.8
Total Revenue	2,927.8			2,819.1			8,717.7			8,447.6			3,016.7			2,890.3			6,004.3			5,789.9

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	2,578.9			1,765.6			6,190.9			5,266.6			1,902.6			1,804.1			3,743.4			3,612.0
Commissions	276.8			262.4			832.6			793.9			284.4			273.5			574.5			555.8
Interest and Debt Expense	42.7			40.1			125.3			119.8			42.6			42.4			84.7			82.6
Deferral of Acquisition Costs	(166.8		)	(154.8		)	(501.8		)	(470.1		)	(170.3		)	(165.7		)	(344.0		)	(335.0		)
Amortization of Deferred Acquisition Costs	136.9			123.7			428.6			403.5			151.6			140.2			322.2			291.7
Compensation Expense	224.2			223.8			666.1			650.6			223.9			220.2			450.4			441.9
Other Expenses	212.9			191.5			657.9			624.6			229.9			220.8			467.8			445.0
Total Benefits and Expenses	3,305.6			2,452.3			8,399.6			7,388.9			2,664.7			2,535.5			5,299.0			5,094.0

Income (Loss) Before Income Tax Expense (Benefit)	(377.8		)	366.8			318.1			1,058.7
Income Before Income Tax													352.0			354.8			705.3			695.9

Income Tax Expense (Benefit)
Current	2.7			139.4			172.7			301.8			74.0			80.6			128.3			170.0
Deferred	(95.8		)	(24.9		)	(128.9		)	29.6			(3.2		)	(11.3		)	14.9			(33.1		)
Total Income Tax Expense (Benefit)	(93.1		)	114.5			43.8			331.4
Total Income Tax													70.8			69.3			143.2			136.9

Net Income (Loss)	$	(284.7	)	$	252.3		$	274.3		$	727.3
Net Income													$	281.2		$	285.5		$	562.1		$	559.0

Net Income (Loss) Per Common Share
Net Income Per Common Share
Basic	$	(1.30	)	$	1.12		$	1.24		$	3.20		$	1.33		$	1.29		$	2.64		$	2.53
Assuming Dilution	$	(1.30	)	$	1.12		$	1.24		$	3.19		$	1.33		$	1.29		$	2.64		$	2.52

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~ (UNAUDITED)

Unum Group and Subsidiaries

Three Months Ended September 30 Nine Months Ended September 30
2018 2017 2018 2017
(in millions of dollars)
Net Income (Loss) $ (284.7 ) $ 252.3
$ 274.3
$ 727.3

Other Comprehensive Income (Loss)
Change in Net Unrealized Gain (Loss) on Securities Before Adjustment (net of tax expense (benefit) of $(80.6); $39.2; $(525.0); $334.7) (305.0 ) 66.1
(1,982.1 ) 616.3
Change in Adjustment to Deferred Acquisition Costs and Reserves for Future Policy and Contract Benefits, Net of Reinsurance (net of tax expense (benefit) of $(69.8); $(31.8); $276.1; $(261.7)) (260.2 ) (66.9 ) 1,051.1
(499.5 )
Change in Net Gain on Hedges (net of tax benefit of $4.4; $7.4; $8.3; $19.7) (16.8 ) (13.8 ) (32.3 ) (36.8 )
Change in Foreign Currency Translation Adjustment (net of tax benefit of $-; $-; $0.3; $-) (15.2 ) 31.8
(29.5 ) 88.7
Change in Unrecognized Pension and Postretirement Benefit Costs (net of tax expense of $1.3; $1.5; $4.0; $4.3) 4.9
2.2
14.3
6.6
Total Other Comprehensive Income (Loss) (592.3 ) 19.4
(978.5 ) 175.3

Comprehensive Income (Loss) $ (877.0 ) $ 271.7
$ (704.2 ) $ 902.6



	Three Months Ended June 30						Six Months Ended June 30
	2019			2018			2019			2018
	(in millions of dollars)
Net Income	$	281.2		$	285.5		$	562.1		$	559.0

Other Comprehensive Income (Loss)
Change in Net Unrealized Gain on Securities Before Adjustment (net of tax expense (benefit) of $279.3; $(169.5); $606.1; $(444.4))	1,047.7			(635.0		)	2,292.8			(1,677.1		)
Change in Adjustment to Deferred Acquisition Costs and Reserves for Future Policy and Contract Benefits, Net of Reinsurance (net of tax expense (benefit) of $(201.2); $133.8; $(446.7); $345.9)	(760.7		)	503.4			(1,693.5		)	1,311.3
Change in Net Gain on Hedges (net of tax benefit of $2.8; $1.6; $8.6; $3.9)	(12.1		)	(6.7		)	(32.6		)	(15.5		)
Change in Foreign Currency Translation Adjustment (net of tax expense (benefit) of $0.1; $(0.3); $0.4; $(0.3))	(19.7		)	(61.8		)	(2.4		)	(14.3		)
Change in Unrecognized Pension and Postretirement Benefit Costs (net of tax expense of $1.3; $2.0; $2.0; $2.7)	4.6			6.3			7.4			9.4
Total Other Comprehensive Income (Loss)	259.8			(193.8		)	571.7			(386.2		)

Comprehensive Income	$	541.0		$	91.7		$	1,133.8		$	172.8

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

Unum Group and Subsidiaries


	Nine Months Ended September 30						Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2019			2018			2019			2018
	(in millions of dollars)						(in millions of dollars)
Common Stock
Balance at Beginning of Year and End of Period	$	30.5		$	30.4

Additional Paid-in Capital
Balance at Beginning of Year	2,303.3			2,272.8
Balance at Beginning of Period							$	30.5		$	30.5		$	30.5		$	30.5
Common Stock Activity	11.0			22.4			0.1			—			0.1			—
Balance at End of Period	2,314.3			2,295.2			30.6			30.5			30.6			30.5

Accumulated Other Comprehensive Income (Loss)
Balance at Beginning of Year	127.5			(51.0		)
Additional Paid-in Capital
Balance at Beginning of Period							2,328.5			2,302.4			2,321.7			2,303.3
Common Stock Activity							7.1			6.2			13.9			5.3
Balance at End of Period							2,335.6			2,308.6			2,335.6			2,308.6

Accumulated Other Comprehensive Loss
Balance at Beginning of Period							(502.3		)	(82.4		)	(814.2		)	127.5
Adjustment to Adopt Accounting Standard Update - Note 2	(17.5		)	—			—			—			—			(17.5		)
Balance at Beginning of Period, as Adjusted							(502.3		)	(82.4		)	(814.2		)	110.0
Other Comprehensive Income (Loss)	(978.5		)	175.3			259.8			(193.8		)	571.7			(386.2		)
Balance at End of Period	(868.5		)	124.3			(242.5		)	(276.2		)	(242.5		)	(276.2		)

Retained Earnings
Balance at Beginning of Year	9,542.2			8,744.0
Balance at Beginning of Period							10,083.1			9,777.8			9,863.1			9,542.2
Adjustment to Adopt Accounting Standard Update - Note 2	14.5			—			—			—			(3.4		)	14.5
Balance at Beginning of Period, as Adjusted							10,083.1			9,777.8			9,859.7			9,556.7
Net Income	274.3			727.3			281.2			285.5			562.1			559.0
Dividends to Stockholders (per common share: $0.72; $0.63)	(160.2		)	(144.1		)
Dividends to Stockholders (per common share: $0.26; $0.23; $0.52; $0.46)							(55.4		)	(50.9		)	(112.9		)	(103.3		)
Balance at End of Period	9,670.8			9,327.2			10,308.9			10,012.4			10,308.9			10,012.4

Treasury Stock
Balance at Beginning of Year	(2,428.6		)	(2,028.2		)
Balance at Beginning of Period							(2,879.3		)	(2,528.8		)	(2,779.3		)	(2,428.6		)
Purchases of Treasury Stock	(200.3		)	(300.3		)	(100.2		)	(100.1		)	(200.2		)	(200.3		)
Balance at End of Period	(2,628.9		)	(2,328.5		)	(2,979.5		)	(2,628.9		)	(2,979.5		)	(2,628.9		)

Total Stockholders' Equity at End of Period	$	8,518.2		$	9,448.6		$	9,453.1		$	9,446.4		$	9,453.1		$	9,446.4

See notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Unum Group and Subsidiaries


	Nine Months Ended September 30						Six Months Ended June 30
	2018			2017			2019			2018
	(in millions of dollars)						(in millions of dollars)
				As Adjusted
Cash Flows from Operating Activities
Net Income	$	274.3		$	727.3		$	562.1		$	559.0
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Change in Receivables	(90.6		)	(119.0		)	57.2			52.3
Change in Deferred Acquisition Costs	(73.2		)	(66.6		)	(21.8		)	(43.3		)
Change in Insurance Reserves and Liabilities	1,101.6			348.1			243.6			291.3
Change in Income Taxes	(106.9		)	81.4			236.7			(5.5		)
Change in Other Accrued Liabilities	25.0			(6.6		)	15.0			(34.9		)
Non-cash Components of Net Investment Income	(120.9		)	(145.7		)	(231.4		)	(185.5		)
Net Realized Investment Gain	(1.9		)	(28.9		)
Net Realized Investment Loss							6.2			4.8
Depreciation	74.9			78.4			54.9			49.5
Other, Net	1.2			8.2			20.2			8.5
Net Cash Provided by Operating Activities	1,083.5			876.6			942.7			696.2

Cash Flows from Investing Activities
Proceeds from Sales of Fixed Maturity Securities	456.2			303.2			606.9			287.2
Proceeds from Maturities of Fixed Maturity Securities	2,234.9			1,848.5			811.1			1,523.6
Proceeds from Sales and Maturities of Other Investments	350.6			161.7			187.1			257.4
Purchases of Fixed Maturity Securities	(2,840.0		)	(2,063.4		)	(1,906.1		)	(1,931.3		)
Purchases of Other Investments	(448.5		)	(313.5		)	(153.0		)	(308.9		)
Net Purchases of Short-term Investments	(87.0		)	(252.6		)	(388.3		)	(281.5		)
Net Decrease in Payables for Collateral on Investments	(158.0		)	(7.7		)	(100.0		)	(88.5		)
Net Purchases of Property and Equipment	(95.6		)	(64.7		)	(64.9		)	(59.6		)
Net Cash Used by Investing Activities	(587.4		)	(388.5		)	(1,007.2		)	(601.6		)

Cash Flows from Financing Activities
Short-term Debt Repayments	(200.0		)	—
Issuance of Long-term Debt	290.7			—			395.9			290.7
Long-term Debt Repayments	(45.0		)	(48.5		)	(30.0		)	(30.0		)
Issuance of Common Stock	3.6			9.5			3.5			2.6
Repurchase of Common Stock	(205.8		)	(307.2		)	(200.2		)	(205.8		)
Dividends Paid to Stockholders	(160.2		)	(144.1		)	(110.9		)	(103.3		)
Other, Net	(42.6		)	(28.1		)	(27.0		)	(26.7		)
Net Cash Used by Financing Activities	(359.3		)	(518.4		)
Net Cash Provided (Used) by Financing Activities							31.3			(72.5		)

Net Increase (Decrease) in Cash and Bank Deposits	136.8			(30.3		)	(33.2		)	22.1

Cash and Bank Deposits at Beginning of Year	77.4			100.4			94.0			77.4

Cash and Bank Deposits at End of Period	$	214.2		$	70.1		$	60.8		$	99.5

See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 1 - Basis of Presentation

The accompanying consolidated financial statements of Unum Group and its subsidiaries (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of full year performance.

Note 2 - Accounting Developments

Accounting Updates Adopted in ~~2018:~~

2019:



Accounting Standards Codification (ASC)	Description	Date of Adoption	Effect on Financial Statements

ASC ~~230 "Statement of Cash Flows"~~220 "Income Statement - Reporting Comprehensive Income"	This update ~~provided clarifying~~allowed entities to make an accounting policy election to reclassify the disproportionate tax effects arising as a result of the recognition of the enactment of the tax bill, H.R.1, An Act to Provide Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, more commonly known as the Tax Cuts and Jobs Act (TCJA) from accumulated other comprehensive income to retained earnings. Tax effects that are disproportionate in accumulated other comprehensive income for reasons other than the TCJA may not be reclassified. This update required additional disclosures on whether an entity elects to reclassify the disproportionate tax effects and its policy for releasing tax effects from accumulated other comprehensive income. This guidance ~~intended to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified~~was applied in the ~~statement~~period of ~~cash flows. The update addressed eight specific cash flow issues that relate to various types of transactions. The guidance is to be applied retrospectively.~~adoption.	January 1, ~~2018~~2019	The adoption of this update ~~resulted in the reclassification~~expanded certain of ~~certain cash inflows from investing activities to cash inflows from operating activities within~~ our consolidated statements of cash flows. This reclassification related to cash distributions from equity method investees and the bifurcation of those distributions as either returns on investment or returns of investment. The adoption of this updatedisclosures but had no ~~effect~~impact on our financial position or results of ~~operations. See~~operations because we did not make the ~~summary tables contained herein for~~optional accounting policy election to reclassify the ~~financial statement impacts~~disproportionate tax effects resulting from the TCJA from accumulated other comprehensive income to retained earnings. We use an aggregate portfolio approach to release disproportionate tax effects when disposing of ~~this retrospective adoption.~~an entire business segment’s portfolio.

ASC ~~606 "Revenue from Contracts with Customers"~~310 "Receivables - Nonrefundable Fees and Other Costs"	~~These updates superseded virtually all existing guidance regarding~~This update shortened the ~~recognition of revenue from customers. Specifically excluded from~~amortization period to the scope of these updates are insurance contracts, although our fee-based service products are included within the scope. Our fee-based service products, which are primarily sold in our Unum US segment, are reported in other income within our consolidated statements of operations and represent less than one percent of our total revenue. The core principle of this guidance is that revenue recognition should depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchangeearliest call date for ~~those goods or services. Accordingly, we continue to recognize revenue for these fee-based service products as services are rendered.~~certain callable debt securities held at a premium. This update did not impact securities held at a discount. The guidance ~~is to be~~was applied ~~retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at~~in the ~~date~~period of adoption.	January 1, ~~2018~~2019	The adoption of ~~these updates~~this update did not have a material impact on our financial position or results of operations.

ASC 718 "Compensation - Stock Compensation"	This update generally aligned the accounting guidance for share-based payments issued to non-employees with guidance for share-based payments issued to employees. Specifically, the update required non-employee share-based payments to be measured using the grant date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered rather than being remeasured through the performance completion date. Additionally, for non-employee share-based payments that contain performance conditions, the update changed the criteria regarding the recognition of compensation cost to when achievement of a performance condition is probable rather than upon actual achievement of the performance condition. The guidance was applied in the period of adoption.	January 1, 2019	The adoption of this update did not have an impact on our financial position or results of ~~operations and did not result in expanded disclosures due to the immaterial nature of our fee-based service products relative to our overall business.~~operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 2 - Accounting Developments - Continued



ASC	Description	Date of Adoption	Effect on Financial Statements

~~ASC 715 "Compensation - Retirement Benefits"~~	This update required the service cost component of net periodic pension and postretirement benefit costs to be included as a component of compensation costs in an entity's statement of income. Other components of net periodic pension and postretirement benefit costs are required to be presented separately from the service cost along with a disclosure identifying the line items in which these costs are presented in the statement of income. The amendments in this update are to be applied retrospectively or prospectively depending on the specific requirement of the update.	~~January 1, 2018~~	The adoption of this update resulted in the reclassification of service cost from the other expenses line item to the compensation expense line item on our consolidated statements of operations but had no effect on our financial position or results of operations. We elected to use the practical expedient for the retrospective application of this update. See the summary tables contained herein for the financial statement impacts of this retrospective adoption.

~~ASC 740 "Income Taxes"~~	This update eliminated the exception that required the tax effect of intra-entity asset transfers other than inventory to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. It required recognition of tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The guidance is to be applied retrospectively.	~~January 1, 2018~~	~~The adoption of this update did not have an impact on our financial position or results of operations.~~

~~ASC 815 "Derivatives and Hedge Accounting"~~	This update provided targeted improvements to accounting for hedging activities for both nonfinancial and financial risk components, aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements, eases certain documentation and effectiveness assessment requirements, and enhances transparency through expanded disclosures. For cash flow and net investment hedges existing at the date of adoption, the guidance is to be applied using a modified retrospective approach through a cumulative-effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the fiscal year the guidance is adopted. The amended presentation and disclosure guidance is required prospectively. Early adoption is permitted.	~~January 1, 2018~~	We elected to early adopt this update. The adoption of this update did not have an impact on our financial position or results of operations; however, it expanded our disclosures. This update will also simplify hedge documentation requirements and expand available hedging strategies.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 2 - Accounting Developments - Continued~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 2 - Accounting Developments - Continued~~

~~Summary of Financial Statement Impacts of Accounting Updates Adopted in 2018:~~

For the Nine Months Ended September 30, 2017
Historical Accounting Method As Adjusted Effect of Change
(in millions of dollars)
Adjustments due to ASC 230
Consolidated Statements of Cash Flow
Cash Flows from Operating Activities
Other, Net $ (2.4 ) $ 8.2
$ 10.6
Cash Flows from Investing Activities
Proceeds from Sales and Maturities of Other Investments 172.3
161.7
(10.6 )

For the Three Months Ended September 30, 2017 For the Nine Months Ended September 30, 2017
Historical Accounting Method As Adjusted Effect of Change Historical Accounting Method As Adjusted Effect of Change
(in millions of dollars) (in millions of dollars)
Adjustments due to ASC 715
Consolidated Statements of Operations
Compensation Expense $ 221.8
$ 223.8
$ 2.0
$ 644.7
$ 650.6
$ 5.9
Other Expenses 193.5
191.5
(2.0 ) 630.5
624.6
(5.9 )

Balance at December 31, 2017 Balance at January 1, 2018 Effect of Change
(in millions of dollars)
Adjustments due to ASC 825
Consolidated Balance Sheets
Assets
Investments
Other Long-term Investments $ 646.8
$ 643.0
$ (3.8 )

Liabilities
Deferred Income Tax 199.0
198.2
(0.8 )

Stockholders' Equity
Accumulated Other Comprehensive Income (Loss) 127.5
110.0
(17.5 )
Retained Earnings 9,542.2
9,556.7
14.5

~~For the adoption of these updates, certain reclassifications have been made to prior year amounts in order to conform to current year presentation.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 2 - Accounting Developments - Continued~~

~~Accounting Updates Outstanding:~~



~~ASC~~	~~Description~~	~~Date of Adoption~~	~~Effect on Financial Statements~~

~~ASC 220 "Income Statement - Reporting Comprehensive Income"~~	This update allows entities to make an optional accounting policy election to reclassify the stranded tax effects arising as a result of the recognition of the enactment of the tax bill, H.R.1, An Act to Provide Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, more commonly known as the Tax Cuts and Jobs Act (TCJA) from accumulated other comprehensive income to retained earnings. Tax effects that are stranded in accumulated other comprehensive income for reasons other than the TCJA may not be reclassified. This update requires additional disclosures on whether an entity elects to reclassify the stranded tax effects and its policy for releasing tax effects from accumulated other comprehensive income. This guidance may be applied in the period of adoption or retrospectively to each period in which the effect of the change in federal income tax rate in the TCJA is recognized, with early adoption permitted.	~~January 1, 2019~~	The adoption of this update will expand certain of our disclosures but will have no impact on our financial position or results of operations because we do not intend to make the optional accounting policy election to reclassify the stranded tax effects resulting from the TCJA from accumulated other comprehensive income to retained earnings.

~~ASC 310 "Receivables - Nonrefundable Fees and Other Costs"~~	This update shortens the amortization period to the earliest call date for certain callable debt securities held at a premium. This update does not impact securities held at a discount. The guidance is to be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Early adoption is permitted.	~~January 1, 2019~~	We have determined the population of our callable debt securities that are within the scope of this update and do not expect this update to have a material impact on our financial position or results of operations.

~~ASC 718 "Compensation - Stock Compensation"~~	This update generally aligns the accounting guidance for share-based payments issued to non-employees with guidance for share-based payments issued to employees. Specifically, the update requires non-employee share-based payments to be measured using the grant date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered rather than being remeasured through the performance completion date. Additionally, for non-employee share-based payments that contain performance conditions, the update will change the criteria regarding the recognition of compensation cost to when achievement of a performance condition is probable rather than upon actual achievement of the performance condition. The guidance is to be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption, with early adoption permitted. For purposes of determining the cumulative effect adjustment, the guidance shall be applied only to equity-classified non-employee share-based payments for which a measurement date has not been established and liability-classified non-employee share-based payments that have not been settled as of the date of adoption.	~~January 1, 2019~~	~~The adoption of this update is not expected to have a material effect on our financial position or results of operations.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 2 - Accounting Developments - Continued~~



~~ASC~~	~~Description~~	~~Date of Adoption~~	~~Effect on Financial Statements~~

ASC 842 "Leases"	This update ~~changes~~changed the accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of lease payments, and a corresponding ~~right-of-use~~ asset, adjusted for certain items, is also recorded. Expense recognition for lessees ~~will remain~~remained similar to ~~current~~previous accounting requirements for capital and operating leases. For lessors, the guidance ~~modifies~~modified the classification criteria and the accounting for sales-type and direct financing leases. The guidance ~~is to be~~was applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings at ~~either the beginning of the earliest comparative period presented or at~~ the beginning of the period of adoption. ~~The guidance also allows~~In addition, the package of practical expedients ~~related to adoption considerations for leases that commenced before the date of adoption. Early adoption is permitted.~~	~~January 1, 2019~~	The adoption of this update will not have a material impact on our financial position or results of operations, however, it will result in the recognition of a lease liability and a corresponding right-of-use asset on our balance sheet related to our operating leases. We expect to adopt the guidance using a modified retrospective approach at the beginning of the period of adoption and intend to apply practical expedientsavailable to leases that commenced prior to the date of ~~adoption. This guidance will also expand~~adoption was applied.	January 1, 2019	See the summary table below for the financial statement impacts of this modified retrospective adoption on our ~~disclosures.~~financial statement line items at January 1, 2019. In addition, see Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for the additional disclosures required by the update.

Summary of Financial Statement Impacts of Accounting Updates Adopted in 2019:



	Balance at December 31, 2018		Balance at January 1, 2019		Effect of Change
	(in millions of dollars)
Adjustments due to ASC 842
Consolidated Balance Sheets
Assets
Other Assets	$	789.0	$	906.7	$	117.7
Deferred Income Tax	109.9		109.5		(0.4		)

Liabilities
Other Liabilities	1,762.8		1,884.8		122.0
Income Tax Payable	24.0		22.7		(1.3		)

Stockholders' Equity
Retained Earnings	9,863.1		9,859.7		(3.4		)

Summary of Financial Statement Impacts of Accounting Updates adopted in 2018:

Effective January 1, 2018, we adopted an update under ASC 825 that changed the accounting and disclosure requirements for certain financial instruments. These changes included a requirement to measure equity investments, other than those that resulted in consolidation or are accounted for under the equity method, at fair value through net income unless the investment qualifies for certain practicability exceptions. The guidance was applied using a modified retrospective approach through a cumulative-effect reduction to accumulated other comprehensive income of $17.5 million with a corresponding increase to retained earnings of $14.5 million, a decrease to other long-term investments of $3.8 million, and a decrease to deferred income tax liability of $0.8 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 2 - Accounting Developments - Continued

Accounting Updates Outstanding:

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 2 - Accounting Developments - Continued~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 2 - Accounting Developments - Continued



ASC	Description	Date of Adoption	Effect on Financial Statements

ASC 820 "Fair Value Measurement"	This update ~~amends~~amended the fair value measurement guidance by removing or clarifying certain existing disclosure requirements, while also adding new disclosure requirements. Specifically, this update ~~removes~~removed certain disclosures related to Level 1 and Level 2 transfers and also ~~removes~~removed the discussion regarding valuation processes of Level 3 fair value measurements. The update modifies guidance related to investments in certain entities that calculate net asset value to explicitly require disclosure regarding timing of liquidation of the investee's assets and timing of redemption restrictions. The update adds disclosures around the changes in unrealized gains and losses in other comprehensive income for recurring Level 3 investments held at the end of the reporting period and adds disclosures regarding certain unobservable inputs on Level 3 fair value measurements. The guidance ~~is to be~~was applied retrospectively or prospectively depending on the specific requirement of the update. Entities are permitted to early adopt any removed or modified disclosures and may delay adoption of the additional disclosures until their effective date.	December 31, 2018 for the removal and modification of certain disclosures and January 1, 2020 for the addition of certain disclosures.	We elected to early adopt the removal and modification of disclosures, as permitted by the update. We have elected to delay the adoption of the additional disclosures until the effective date. The adoption of this update will modify our disclosures but will not ~~yet determined the expected~~have an impact on our ~~disclosures.~~financial position or results of operations.

ASC 715 "Compensation - Retirement Benefits"	This update amends the defined benefit pension and other postretirement benefit guidance by removing or clarifying certain existing ~~disclosures~~disclosure requirements, while also adding new disclosure requirements. Specifically, this update removes the requirement to disclose the effects of a one-percentage point change in the assumed healthcare cost trend and the requirement to disclose amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost of the next year. This update adds a requirement to describe the reasons for significant gains and losses related to changes in the benefit obligation for the period. The update also clarifies that the projected benefit obligation (PBO) and accumulated benefit obligation (ABO) and fair value of plan assets are to be disclosed for plans with PBOs or ABOs in excess of plan assets. The guidance is to be applied retrospectively and early adoption is permitted.	December 31, 2020	We have not yet determined the expected impact on our disclosures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 2 - Accounting Developments - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments

Fair Value Measurements for Financial Instruments Carried at Fair Value

We report fixed maturity securities, which are classified as available-for-sale securities, derivative financial instruments, and unrestricted equity securities at fair value in our consolidated balance sheets. We report our investments in private equity partnerships at our share of the partnerships' net asset value per share or its equivalent (NAV) as a practical expedient for fair value.

The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and less judgment utilized in measuring fair value. An active market for a financial instrument is a market in which transactions for an asset or a similar asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and should be used to measure fair value whenever available. Conversely, financial instruments rarely traded or not quoted have less observability and are measured at fair value using valuation techniques that require more judgment. Pricing observability is generally impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, and overall market conditions.

We classify financial instruments in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 - the highest category of the fair value hierarchy classification wherein inputs are unadjusted and represent quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - valued using inputs (other than prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.

Level 3 - the lowest category of the fair value hierarchy and reflects the judgment of management regarding what market participants would use in pricing assets or liabilities at the measurement date. Financial assets and liabilities categorized as Level 3 are generally those that are valued using unobservable inputs to extrapolate an estimated fair value.

Valuation Methodologies of Financial Instruments Measured at Fair Value

Valuation techniques used for assets and liabilities accounted for at fair value are generally categorized into three types. The market approach uses prices and other relevant information from market transactions involving identical or comparable assets or liabilities. The income approach converts future amounts, such as cash flows or earnings, to a single present amount, or a discounted amount. The cost approach is based upon the amount that currently would be required to replace the service capacity of an asset, or the current replacement cost.

We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available that can be obtained without undue cost and effort. In some cases, a single valuation technique will be appropriate (for example, when valuing an asset or liability using quoted prices in an active market for identical assets or liabilities). In other cases, multiple valuation techniques will be appropriate. If we use multiple valuation techniques to measure fair value, we evaluate and weigh the results, as appropriate, considering the reasonableness of the range indicated by those results. A fair value measurement is the point within that range that is most representative of fair value in the circumstances.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued

The selection of the valuation method(s) to apply considers the definition of an exit price and depends on the nature of the asset or liability being valued. For assets and liabilities accounted for at fair value, we generally use valuation techniques consistent with the market approach, and to a lesser extent, the income approach. We believe the market approach provides more observable data than the income approach, considering the type of investments we hold. Our fair value measurements could differ significantly based on the valuation technique and available inputs. When using a pricing service, we obtain the vendor's pricing documentation to ensure we understand their methodologies. We periodically review and approve the selection of our pricing vendors to ensure we are in agreement with their current methodologies. When markets are less active, brokers may rely more on models with inputs based on the information available only to the broker. Our internal investment management professionals, which include portfolio managers and analysts, monitor securities priced by brokers and evaluate their prices for reasonableness based on benchmarking to available primary and secondary market information. In weighing a broker quote as an input to fair value, we place less reliance on quotes that do not reflect the result of market transactions. We also consider the nature of the quote, particularly whether the quote is a binding offer. If prices in an inactive market do not reflect current prices for the same or similar assets, adjustments may be necessary to arrive at fair value. When relevant market data is unavailable, which may be the case during periods of market uncertainty, the income approach can, in suitable circumstances, provide a more appropriate fair value. During ~~2018~~2019, we have applied valuation approaches and techniques on a consistent basis to similar assets and liabilities and consistent with those approaches and techniques used at year end ~~2017~~2018.

Fixed Maturity and Equity Securities

We use observable and unobservable inputs in measuring the fair value of our fixed maturity and equity securities. For securities categorized as Level 1, fair values equal active Trade Reporting and Compliance Engine (TRACE) pricing or unadjusted broker market maker prices. For securities categorized as Level 2 or Level 3, inputs that may be used in valuing each class of securities at any given time period are disclosed below. Actual inputs used to determine fair values will vary for each reporting period depending on the availability of inputs which may, at times, be affected by the lack of market liquidity.



		Level 2	Level 3
Instrument		Observable Inputs	Unobservable Inputs

United States Government and Government Agencies and Authorities
	Valuation Method	Principally the market approach	Not applicable

	Valuation Techniques / Inputs	Prices obtained from external pricing services

States, Municipalities, and Political Subdivisions
	Valuation Method	Principally the market approach	Principally the market approach

	Valuation Techniques / Inputs	Prices obtained from external pricing services	Analysis of similar bonds, adjusted for comparability
		Relevant reports issued by analysts and rating agencies	Non-binding broker quotes
		Audited financial statements	Security and issuer level spreads

Foreign Governments
	Valuation Method	Principally the market approach	Principally the market approach

	Valuation Techniques / Inputs	Prices obtained from external pricing services	Analysis of similar bonds, adjusted for comparability
		Non-binding broker quotes	Non-binding broker quotes
		Call provisions	Security and issuer level spreads

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued



		Level 2	Level 3
Instrument		Observable Inputs	Unobservable Inputs

Public Utilities
	Valuation Method	Principally the market and income approaches	Principally the market and income approaches

	Valuation Techniques / Inputs	TRACE pricing	Change in benchmark reference
		Prices obtained from external pricing services	Analysis of similar bonds, adjusted for comparability
		Non-binding broker quotes	Discount for size - illiquidity
		Benchmark yields	Non-binding broker quotes
		Transactional data for new issuances and secondary trades	Lack of marketability
		Security cash flows and structures	Security and issuer level spreads
		Recent issuance / supply	Volatility of credit
		Matrix pricing	Matrix pricing
		Security and issuer level spreads
		Security creditor ratings/maturity/capital structure/optionality
		Public covenants
		Comparative bond analysis
		Relevant reports issued by analysts and rating agencies
		Audited financial statements

Mortgage/Asset-Backed Securities
	Valuation Method	Principally the market and income approaches	Principally the market approach

	Valuation Techniques / Inputs	Prices obtained from external pricing services	Analysis of similar bonds, adjusted for comparability
		Non-binding broker quotes	Non-binding broker quotes
		Security cash flows and structures	Security and issuer level spreads
		Underlying collateral
		Prepayment speeds/loan performance/delinquencies
		Relevant reports issued by analysts and rating agencies
		Audited financial statements

All Other Corporate Bonds
	Valuation Method	Principally the market and income approaches	Principally the market and income approaches

	Valuation Techniques / Inputs	TRACE pricing	Change in benchmark reference
		Prices obtained from external pricing services	Analysis of similar bonds, adjusted for comparability
		Non-binding broker quotes	Discount for size - illiquidity

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued



		Level 2	Level 3
Instrument		Observable Inputs	Unobservable Inputs

All Other Corporate Bonds - Continued
		Benchmark yields	Non-binding broker quotes
		Transactional data for new issuances and secondary trades	Lack of marketability
		Security cash flows and structures	Security and issuer level spreads
		Recent issuance / supply	Volatility of credit
		Matrix pricing	Matrix pricing
		Security and issuer level spreads
		Security creditor ratings/maturity/capital structure/optionality
		Public covenants
		Comparative bond analysis
		Relevant reports issued by analysts and rating agencies
		Audited financial statements

Redeemable Preferred Stocks
	Valuation Method	Principally the market approach	Principally the market approach

	Valuation Techniques / Inputs	Non-binding broker quotes	Non-binding broker quotes
		Benchmark yields
		Comparative bond analysis
		Call provisions
		Relevant reports issued by analysts and rating agencies
		Audited financial statements

Equity Securities
	Valuation Method	Principally the market approach	Principally the market and income approaches

	Valuation Techniques / Inputs	Prices obtained from external pricing services	Financial statement analysis
		Non-binding broker quotes	Non-binding broker quotes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued

The management of our investment portfolio includes establishing pricing policy and reviewing the reasonableness of sources and inputs used in developing pricing. We review all prices obtained to ensure they are consistent with a variety of observable market inputs and to verify the validity of a security's price. In the event we receive a vendor's market price that does not appear reasonable based on our market analysis, we may challenge the price and request further information about the assumptions and methodologies used by the vendor to price the security. We may change the vendor price based on a better data source such as an actual trade. We also review all price changes from the prior month which fall outside a predetermined corridor. The overall valuation process for determining fair values may include adjustments to valuations obtained from our pricing sources when they do not represent a valid exit price. These adjustments may be made when, in our judgment and considering our knowledge of the financial conditions and industry in which the issuer operates, certain features of the financial instrument require that an adjustment be made to the value originally obtained from our pricing sources. These features may include the complexity of the financial instrument, the market in which the financial instrument is traded, counterparty credit risk, credit structure, concentration, or liquidity. Additionally, an adjustment to the price derived from a model typically reflects our judgment of the inputs that other participants in the market for the financial instrument being measured at fair value would consider in pricing that same financial instrument. In the event an asset is sold, we test the validity of the fair value determined by our valuation techniques by comparing the selling price to the fair value determined for the asset in the immediately preceding month end reporting period.

Certain of our investments do not have readily determinable market prices and/or observable inputs or may at times be affected by the lack of market liquidity. For these securities, we use internally prepared valuations combining matrix pricing with vendor purchased software programs, including valuations based on estimates of future profitability, to estimate the fair value. Additionally, we may obtain prices from independent third-party brokers to aid in establishing valuations for certain of these securities. Key assumptions used by us to determine fair value for these securities include risk free interest rates, risk premiums, performance of underlying collateral (if any), and other factors involving significant assumptions which may or may not reflect those of an active market.

The parameters and inputs used to validate a price on a security may be adjusted for assumptions about risk and current market conditions on a quarter to quarter basis, as certain features may be more significant drivers of valuation at the time of pricing. Changes to inputs in valuations are not changes to valuation methodologies; rather, the inputs are modified to reflect direct or indirect impacts on asset classes from changes in market conditions.

At ~~September~~June 30, ~~2018~~2019, ~~20.5~~23.6 percent of our fixed maturity securities were valued using active trades from TRACE pricing or broker market maker prices for which there was current market activity in that specific security (comparable to receiving one binding quote). The prices obtained were not adjusted, and the assets were classified as Level 1.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 3 - Fair Values of Financial Instruments - Continued~~

The remaining ~~79.5~~76.4 percent of our fixed maturity securities were valued based on non-binding quotes or other observable and unobservable inputs, as discussed below:

~~66.1~~63.1 percent of our fixed maturity securities were valued based on prices from pricing services that generally use observable inputs such as prices for securities or comparable securities in active markets in their valuation techniques. These assets were classified as Level 2.

~~3.6~~3.7 percent of our fixed maturity securities were valued based on one or more non-binding broker quotes, if validated by observable market data, or on TRACE prices for identical or similar assets absent current market activity. When only one price is available, it is used if observable inputs and analysis confirms that it is appropriate. These assets, for which we were able to validate the price using other observable market data, were classified as Level 2.

~~9.8~~9.6 percent of our fixed maturity securities were valued based on prices of comparable securities, matrix pricing, market models, and/or internal models or were valued based on non-binding quotes with no other observable market data. These assets were classified as either Level 2 or Level 3, with the categorization dependent on whether there was other observable market data.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 3 - Fair Values of Financial Instruments - Continued

Derivatives

Fair values for derivatives other than embedded derivatives in modified coinsurance arrangements are based on market quotes or pricing models and represent the net amount of cash we would have paid or received if the contracts had been settled or closed as of the last day of the period. We analyze credit default swap spreads relative to the average credit spread embedded within the LIBOR-setting syndicate in determining the effect of credit risk on our derivatives' fair values. If net counterparty credit risk for a derivative asset is determined to be material and is not adequately reflected in the LIBOR-based fair value obtained from our pricing sources, we adjust the valuations obtained from our pricing sources. For purposes of valuing net counterparty risk, we measure the fair value of a group of financial assets and financial liabilities on the basis of the price that would be received to sell a net long position or transfer a net short position for a particular risk exposure in an orderly transaction between market participants at the measurement date under current market conditions. In regard to our own credit risk component, we adjust the valuation of derivative liabilities wherein the counterparty is exposed to our credit risk when the LIBOR-based valuation of our derivatives obtained from pricing sources does not effectively include an adequate credit component for our own credit risk.

Fair values for our embedded derivative in a modified coinsurance arrangement are estimated using internal pricing models and represent the hypothetical value of the duration mismatch of assets and liabilities, interest rate risk, and third party credit risk embedded in the modified coinsurance arrangement.

We consider transactions in inactive markets to be less representative of fair value. We use all available observable inputs when measuring fair value, but when significant unobservable inputs are used, we classify these assets or liabilities as Level 3.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 3 - Fair Values of Financial Instruments - Continued~~

Private Equity Partnerships

Our private equity partnerships represent funds that are primarily invested in private credit, private equity, and real assets, as described below. Distributions received from the funds arise from income generated by the underlying investments as well as the liquidation of the underlying investments. There is generally not a public market for these investments.

The following ~~table presents~~tables present additional information about our private equity partnerships, ~~as of September 30, 2018,~~ including commitments for additional investments which may or may not be funded:



		June 30, 2019
Investment Category		Fair Value		Redemption Term / Redemption Notice	Unfunded Commitments
		(in millions of dollars)			(in millions of dollars)
Private Credit	(a)	$	171.3	Not redeemable	$	78.9
		35.6		Initial 2 year lock on each new investment / Quarterly after 2 year lock with 90 days notice	1.9
Total Private Credit		206.9			80.8

Private Equity	(b)	146.7		Not redeemable	174.5

Real Assets	(c)	156.3		Not redeemable	113.9
		30.4		Quarterly / 90 days notice	—
Total Real Assets		186.7			113.9

Total Partnerships		$	540.3		$	369.2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 3 - Fair Values of Financial Instruments - Continued


								December 31, 2018
Investment Category		Fair Value		Redemption Term / Redemption Notice	Unfunded Commitments			Fair Value		Redemption Term / Redemption Notice	Unfunded Commitments
		(in millions of dollars)			(in millions of dollars)			(in millions of dollars)			(in millions of dollars)
Private Credit	(a)	$	162.5	Not redeemable	$	71.8	(a)	$	168.6	Not redeemable	$	99.5
		20.1		Initial 2 year lock on each new investment / Quarterly after 2 year lock with 90 days notice	8.8			25.7		Initial 2 year lock on each new investment / Quarterly after 2 year lock with 90 days notice	10.3
Total Private Credit		182.6			80.6			194.3			109.8

Private Equity	(b)	126.5		Not redeemable	186.4		(b)	128.3		Not redeemable	169.5

Real Assets	(c)	127.4		Not redeemable	84.6		(c)	131.0		Not redeemable	106.0
		30.2		Quarterly / 90 days notice	—			30.2		Quarterly / 90 days notice	—
Total Real Assets		157.6			84.6			161.2			106.0

Total Partnerships		$	466.7		$	351.6		$	483.8		$	385.3

(a)

Private Credit - The limited partnerships described in this category employ various investment strategies, generally providing direct lending or other forms of debt financing including first-lien, second-lien, mezzanine, and subordinated loans. The limited partnerships have credit exposure to corporates, physical assets, and/or financial assets within a variety of industries (including manufacturing, healthcare, energy, business services, technology, materials, and retail) in North America and, to a lesser extent, outside of North America. Unless specifically disclosed in the table above, these limited partnerships do not allow for redemptions. As of ~~September~~June 30, ~~2018,~~2019, the estimated remaining life of the investments that do not allow for redemptions is approximately 2443 percent in the next 3 years, 4628 percent during the period from 3 to 5 years, 2726 percent during the period from 5 to 10 years, and 3 percent ~~after~~during the period offrom 10 to 15 years.

(b)

Private Equity - The limited partnerships described in this category employ various strategies generally investing in controlling or minority control equity positions directly in companies and/or assets across various industries (including manufacturing, healthcare, energy, business services, technology, materials, and retail), primarily in private markets within North America and, to a lesser extent, outside of North America. Unless specifically disclosed in the table above, these limited partnerships do not allow for redemptions. As of ~~September~~June 30, ~~2018,~~2019, the estimated remaining life of the investments that do not allow for redemptions is approximately 2638 percent in the next 3 years, ~~26 percent during the period from 3 to 5 years, 45~~60 percent during the period from 5 to 10 years, 1and 2 percent during the period from 10 to 15 ~~years, and 2 percent after the period of 15~~ years.

(c)

Real Assets - The limited partnerships described in this category employ various strategies, which include investing in the equity and/or debt financing of physical assets, including infrastructure (energy, power, water/wastewater, communications), transportation (including airports, ports, toll roads, aircraft, railcars) and real estate in North America, Europe, South America, and Asia. Unless specifically disclosed in the table above, these limited partnerships do not allow for redemptions. As of ~~September~~June 30, ~~2018,~~2019, the estimated remaining life of the investments that do not allow for redemptions is approximately 21 percent in the next 3 years, 2116 percent during period from 3 to 5 years, 7476 percent during the period from 5 to 10 years, and 37 percent during the period from 10 to 15 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued

The following tables present information about ~~financial instruments~~assets and liabilities measured at fair value on a recurring basis by fair value level, based on the observability of the inputs used:



	June 30, 2019
	Level 1		Level 2		Level 3		NAV		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	716.1	$	1,170.1	$	—	$	—	$	1,886.2
States, Municipalities, and Political Subdivisions	—		2,708.0		—		—		2,708.0
Foreign Governments	—		972.8		31.9		—		1,004.7
Public Utilities	780.9		6,643.7		189.1		—		7,613.7
Mortgage/Asset-Backed Securities	—		1,566.4		—		—		1,566.4
All Other Corporate Bonds	9,437.2		21,169.9		1,014.1		—		31,621.2
Redeemable Preferred Stocks	20.7		19.3		—		—		40.0
Total Fixed Maturity Securities	10,954.9		34,250.2		1,235.1		—		46,440.2

Other Long-term Investments
Derivatives
Foreign Exchange Contracts	—		27.4		—		—		27.4
Equity Securities	—		27.6		4.6		—		32.2
Private Equity Partnerships	—		—		—		540.3		540.3
Total Other Long-term Investments	—		55.0		4.6		540.3		599.9
Total Financial Instrument Assets Carried at Fair Value	$	10,954.9	$	34,305.2	$	1,239.7	$	540.3	$	47,040.1

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps and Forwards	$	—	$	1.6	$	—	$	—	$	1.6
Foreign Exchange Contracts	—		34.6		—		—		34.6
Embedded Derivative in Modified Coinsurance Arrangement	—		—		26.4		—		26.4
Total Derivatives	—		36.2		26.4		—		62.6
Total Financial Instrument Liabilities Carried at Fair Value	$	—	$	36.2	$	26.4	$	—	$	62.6

September 30, 2018
Level 1 Level 2 Level 3 NAV Total
(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities $ 679.6
$ 1,099.9
$ —
$ —
$ 1,779.5
States, Municipalities, and Political Subdivisions —
2,256.1
63.9
—
2,320.0
Foreign Governments —
766.8
31.6
—
798.4
Public Utilities 333.7
6,933.8
122.4
—
7,389.9
Mortgage/Asset-Backed Securities —
1,626.5
0.5
—
1,627.0
All Other Corporate Bonds 7,798.7
20,425.6
891.8
—
29,116.1
Redeemable Preferred Stocks —
18.9
21.5
—
40.4
Total Fixed Maturity Securities 8,812.0
33,127.6
1,131.7
—
43,071.3

Other Long-term Investments
Derivatives
Foreign Exchange Contracts —
20.4
—
—
20.4
Credit Default Swaps —
0.5
—
—
0.5
Equity Securities 14.9
12.6
1.1
—
28.6
Private Equity Partnerships —
—
—
466.7
466.7
Total Other Long-term Investments 14.9
33.5
1.1
466.7
516.2
Total Financial Instrument Assets Carried at Fair Value $ 8,826.9
$ 33,161.1
$ 1,132.8
$ 466.7
$ 43,587.5

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps and Forwards $ —
$ 7.3
$ —
$ —
$ 7.3
Foreign Exchange Contracts —
39.2
—
—
39.2
Embedded Derivative in Modified Coinsurance Arrangement —
—
13.8
—
13.8
Total Derivatives —
46.5
13.8
—
60.3
Total Financial Instrument Liabilities Carried at Fair Value $ —
$ 46.5
$ 13.8
$ —
$ 60.3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued



	December 31, 2018
	Level 1		Level 2		Level 3		NAV		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	513.4	$	1,301.0	$	—	$	—	$	1,814.4
States, Municipalities, and Political Subdivisions	—		2,424.2		—		—		2,424.2
Foreign Governments	—		952.3		31.4		—		983.7
Public Utilities	286.4		7,041.7		84.7		—		7,412.8
Mortgage/Asset-Backed Securities	—		1,582.7		—		—		1,582.7
All Other Corporate Bonds	4,232.1		23,026.1		1,495.8		—		28,754.0
Redeemable Preferred Stocks	—		18.8		21.1		—		39.9
Total Fixed Maturity Securities	5,031.9		36,346.8		1,633.0		—		43,011.7

Other Long-term Investments
Derivatives
Foreign Exchange Contracts	—		30.4		—		—		30.4
Credit Default Swaps	—		0.5		—		—		0.5
Total Derivatives	—		30.9		—		—		30.9
Equity Securities	—		24.6		4.6		—		29.2
Private Equity Partnerships	—		—		—		483.8		483.8
Total Other Long-term Investments	—		55.5		4.6		483.8		543.9
Total Financial Instrument Assets Carried at Fair Value	$	5,031.9	$	36,402.3	$	1,637.6	$	483.8	$	43,555.6

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps	$	—	$	5.2	$	—	$	—	$	5.2
Foreign Exchange Contracts	—		32.8		—		—		32.8
Embedded Derivative in Modified Coinsurance Arrangement	—		—		31.1		—		31.1
Total Derivatives	—		38.0		31.1		—		69.1
Total Financial Instrument Liabilities Carried at Fair Value	$	—	$	38.0	$	31.1	$	—	$	69.1

December 31, 2017
Level 1 Level 2 Level 3 NAV Total
(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities $ 460.1
$ 1,022.4
$ —
$ —
$ 1,482.5
States, Municipalities, and Political Subdivisions —
2,336.9
—
—
2,336.9
Foreign Governments —
863.9
—
—
863.9
Public Utilities 154.2
7,874.6
207.7
—
8,236.5
Mortgage/Asset-Backed Securities —
1,973.6
—
—
1,973.6
All Other Corporate Bonds 3,556.1
25,816.2
1,150.1
—
30,522.4
Redeemable Preferred Stocks —
19.2
22.8
—
42.0
Total Fixed Maturity Securities 4,170.4
39,906.8
1,380.6
—
45,457.8

Other Long-term Investments
Derivatives
Foreign Exchange Contracts —
19.5
—
—
19.5
Equity Securities 0.2
10.4
1.1
—
11.7
Private Equity Partnerships —
—
—
407.2
407.2
Total Other Long-term Investments 0.2
29.9
1.1
407.2
438.4
Total Financial Instrument Assets Carried at Fair Value $ 4,170.6
$ 39,936.7
$ 1,381.7
$ 407.2
$ 45,896.2

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps $ —
$ 5.1
$ —
$ —
$ 5.1
Foreign Exchange Contracts —
46.9
—
—
46.9
Credit Default Swaps —
0.2
—
—
0.2
Embedded Derivative in Modified Coinsurance Arrangement —
—
15.9
—
15.9
Total Derivatives —
52.2
15.9
—
68.1
Total Financial Instrument Liabilities Carried at Fair Value $ —
$ 52.2
$ 15.9
$ —
$ 68.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 3 - Fair Values of Financial Instruments - Continued

~~Transfers of assets between Level 1 and Level 2 are as follows:~~

Three Months Ended September 30
2018 2017
Transfers into

Level 1 from
Level 2

Level 2 from
Level 1

Level 1 from
Level 2

Level 2 from
Level 1
(in millions of dollars)
Fixed Maturity Securities
United States Government and Government Agencies and Authorities $ 225.5
$ 38.1
$ 751.9
$ —
Public Utilities 77.7
323.4
236.7
387.5
All Other Corporate Bonds 2,650.2
2,519.1
3,022.8
2,944.7
Total Fixed Maturity Securities $ 2,953.4
$ 2,880.6
$ 4,011.4
$ 3,332.2

Nine Months Ended September 30
2018 2017
Transfers into
Level 1 from
Level 2 Level 2 from
Level 1 Level 1 from
Level 2 Level 2 from
Level 1
(in millions of dollars)
Fixed Maturity Securities
United States Government and Government Agencies and Authorities $ 233.4
$ —
$ 465.8
$ —
Public Utilities 244.0
57.4
463.6
67.1
All Other Corporate Bonds 4,710.3
1,200.1
4,966.7
1,249.9
Total Fixed Maturity Securities $ 5,187.7
$ 1,257.5
$ 5,896.1
$ 1,317.0

Equity Securities $ —
$ 0.2
$ —
$ —

Transfers between Level 1 and Level 2 occurred due to the change in availability of either a TRACE or broker market maker price. Depending on current market conditions, the availability of these Level 1 prices can vary from period to period. For fair value measurements of financial instruments that were transferred either into or out of Level 1 or 2, we reflect the transfers using the fair value at the beginning of the period.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 3 - Fair Values of Financial Instruments - Continued~~

Changes in assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows:


	Three Months Ended September 30, 2018																					Three Months Ended June 30, 2019
				Total Realized and Unrealized Investment Gains (Losses) Included in										Level 3 Transfers											Total Realized and Unrealized Investment Gains (Losses) Included in											Level 3 Transfers
	Fair Value Beginning of Period			Earnings		Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period			Fair Value Beginning of Period			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)																					(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	36.5		$	—	$	(1.5	)	$	—	$	—		$	28.9	$	—		$	63.9
Foreign Governments	31.5			—		0.1			—		—			—		—			31.6			$	31.6		$	—		$	0.3		$	—	$	—		$	—	$	—		$	31.9
Public Utilities	169.2			—		(1.2		)	—		—			66.9		(112.5		)	122.4			224.0			—			(2.0		)	—		—			80.3		(113.2		)	189.1
Mortgage/Asset-Backed Securities	0.5			—		—			—		—			—		—			0.5
All Other Corporate Bonds	816.3			—		(6.9		)	—		(21.0		)	358.8		(255.4		)	891.8			496.0			—			16.0			—		(9.7		)	595.8		(84.0		)	1,014.1
Redeemable Preferred Stocks	21.6			—		(0.1		)	—		—			—		—			21.5			21.0			—			—			—		—			—		(21.0		)	—
Total Fixed Maturity Securities	1,075.6			—		(9.6		)	—		(21.0		)	454.6		(367.9		)	1,131.7			772.6			—			14.3			—		(9.7		)	676.1		(218.2		)	1,235.1

Equity Securities	1.1			—		—			—		—			—		—			1.1			4.6			—			—			—		—			—		—			4.6
Embedded Derivative in Modified Coinsurance Arrangement	(19.9		)	6.1		—			—		—			—		—			(13.8		)	(25.6		)	(0.8		)	—			—		—			—		—			(26.4		)

~~On June 13, 2018, an alleged securities class action lawsuit entitled~~ ~~Cynthia Pittman v. Unum Group, Richard McKenney, John McGarry, and Daniel Waxenberg~~

•

On June 13, 2018, an alleged securities class action lawsuit entitled Cynthia Pittman v. Unum Group, Richard McKenney, John McGarry, and Daniel Waxenberg was filed in the United States District Court for the Eastern District of Tennessee. The plaintiff seeks to represent purchasers of Unum Group publicly traded securities between January 31, 2018 and May 2, 2018. The plaintiff alleges the Company caused its shares to trade at artificially high levels by failing to disclose information about the rate of long-term care policy terminations and long-term care claim incidence resulting in misleading statements about capital management plans and long-term care reserves. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks compensatory damages in an amount to be proven at trial. The Company strongly denies these allegations and will vigorously defend the litigation.

•

On July 13, 2018, an alleged securities class action lawsuit entitled Scott Cunningham v. Unum Group, Richard McKenney, John McGarry, and Daniel Waxenberg was filed in the United States District Court for the Eastern District of Tennessee. The allegations, class period, and damages claimed mirror those in the Pittman matter. The Company strongly denies these allegations and will vigorously defend the litigation.

•

On July 25, 2018, an alleged securities class action lawsuit entitled City of Taylor Police and Fire Retirement System v. Unum Group, Richard McKenney, John McGarry, Steve Zabel, and Daniel Waxenberg was filed in the United States District Court for the Eastern District of Tennessee. The plaintiff seeks to represent purchasers of Unum Group publicly traded securities between October 27, 2016 and May 1, 2018. The allegations and damages claimed mirror those in the Pittman matter. The Company strongly denies these allegations and will vigorously defend the litigation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 11 - Commitments and Contingent Liabilities - Continued

On November 9, 2018, the court consolidated the Pittman, Cunningham, and City of Taylor Police and Fire Retirement System cases into one matter entitled In re Unum Group Securities Litigation, appointed a lead plaintiff and lead plaintiff’s counsel, and directed the plaintiff to file a consolidated amended complaint. On January 15, 2019, the plaintiff filed a consolidated amended complaint asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks compensatory damages in an amount to be proven at ~~trial. The~~trial as well as costs, expenses, and attorney’s fees. On March 18, 2019, the Company ~~strongly denies these allegations and will vigorously defend~~filed a motion to dismiss the ~~litigation.~~

consolidated amended complaint.

~~On July 13, 2018, an alleged securities class action lawsuit entitled~~ ~~Scott Cunningham v. Unum Group, Richard McKenney, John McGarry, and Daniel Waxenberg~~ ~~was filed in the United States District Court for the Eastern District of Tennessee. The allegations, class period, and damages claimed mirror those in the~~ ~~Pittman~~ ~~matter. The Company strongly denies these allegations and will vigorously defend the litigation.~~

~~On July 25, 2018, an alleged securities class action lawsuit entitled~~ ~~City of Taylor Police and Fire Retirement System v. Unum Group, Richard McKenney, John McGarry, Steve Zabel, and Daniel Waxenberg~~ was filed in the United States District Court for the Eastern District of Tennessee. The plaintiff seeks to represent purchasers of Unum Group publicly traded securities between October 27, 2016 and May 1, 2018. The allegations and damages claimed mirror those in the ~~Pittman~~ ~~matter. The Company strongly denies these allegations and will vigorously defend the litigation.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued~~

~~Unum Group and Subsidiaries~~

~~September 30, 2018~~

~~Note 11 - Commitments and Contingent Liabilities - Continued~~

These lawsuits are in a very preliminary stage, the outcome is uncertain, and the Company is unable to estimate a range of reasonably possible losses. Reserves have not been established for these matters. Although we believe these claims lack merit, an adverse outcome in one or more of these actions could, depending on the nature, scope, and amount of the ruling, materially adversely affect our consolidated results of operations in a period.

~~Shareholder Derivative Actions:~~ ~~Two alleged derivative lawsuits have been filed against individual defendants and Unum Group, as nominal defendant, as follows:~~

~~On September 27, 2018, a purported shareholder derivative lawsuit entitled~~ Vladimir Gusinsky Revocable Trust, Derivatively on Behalf of Unum Group v. Richard P. McKenney, John F. McGarry, Daniel J. Waxenberg, Steve Zabel, Kevin T. Kabat, E. Michael Caulfield, Gloria C. Larson, Timothy F. Keaney, Theodore H. Bunting, Jr., Cynthia L. Egan, Ronald P. O'Hanley, Francis L. Shammo, Joseph J. Echevarria, Thomas R. Watjen, Pamela H. Godwin, Edward J. Muhl, and Unum Group as nominal defendant was filed in the United States District Court for the District of Delaware. The complaint purports to assert claims on behalf of the Company against certain current and past members of our Board of Directors and Mr. McKenney for alleged misleading statements about the Company's long-term care business in the Company's proxy statement filed with the Securities and Exchange Commission on April 13, 2017 in violation of Section 14(a) of the Securities Exchange Act of 1934. The complaint also purports to assert claims on behalf of the Company against all individual defendants arising out of the Company's long-term care business for breach of fiduciary duties, waste of corporate assets and unjust enrichment. The Company strongly denies these allegations and will vigorously defend the litigation.

~~On October 23, 2018, a purported shareholder derivative lawsuit entitled~~ Steven Jenkins, Derivatively on Behalf of Unum Group v. Richard P. McKenney, John F. McGarry, Daniel J. Waxenberg, Steve Zabel, Kevin T. Kabat, E. Michael Caulfield, Gloria C. Larson, Timothy F. Keaney, Theodore H. Bunting, Jr., Cynthia L. Egan, Ronald P. O'Hanley, Francis J. Shammo, Joseph J. Echevarria, Thomas R. Watjen, Pamela H. Godwin, Edward J. Muhl, and Unum Group as nominal defendant ~~was filed in the United States District Court for the District of Delaware. The defendants, allegations, and damages claimed mirror those in the~~ ~~Gusinsky~~ ~~matter. The Company strongly denies these allegations and will vigorously defend the litigation.~~

Note 12 - ~~Other~~Leases

~~Debt~~We lease certain buildings and equipment under various noncancelable operating lease agreements. In addition, we have sub-lease agreements on a limited number of our building lease agreements. The majority of our building leases and sub-leases expire within a five to ten year period and we generally have the option to renew at the end of the lease term for an additional five to ten year period at the fair rental value at the time of renewal. The majority of our equipment leases expire within a one to three year period and we generally have the option to renew at the end of the lease term for an additional one to three year period at the fair rental value at the time of renewal.

We do not have any lease agreements or sub-lease agreements that contain variable lease payments. In ~~July 2018, our $200.0 million 7.00% senior unsecured notes matured.~~

~~In May 2018,~~addition, we ~~issued $300.0 million of 6.25% junior subordinated notes due 2058. The notes are redeemable at~~do not have lease agreements or ~~above par on~~sub-lease agreements that contain residual value guarantees or ~~after June 15, 2023 and rank equally in the right of payment with our other junior subordinated debt securities.~~

~~During the nine months ended September 30, 2018, we made principal payments of $45.0 million on our senior secured non-recourse notes issued by Northwind Holdings, LLC.~~

~~At September 30, 2018, letters of credit totaling $2.1 million~~ ~~had been issued from the credit facility, but there were no borrowed amounts outstanding.~~

In June 2017, we purchased and retired the remaining $3.4 million of principal on our senior secured floating rate notes acquired through our purchase of Starmount. In conjunction with this retirement, we also terminated the interest rate swap associatedimpose any restrictions or covenants with the ~~hedge~~lessors.

We determine if an arrangement is a lease at inception through a formal process that evaluates our right to control the use of ~~these notes~~an identified asset for a period of time in exchange for consideration. We account for the lease and ~~recorded~~non-lease components of our building leases separately and have elected to use the available practical expedient to account for the lease and non-lease components of our equipment leases as a ~~$0.1 million loss~~single component. All of our leases are classified as operating, none of which are classified as short-term leases. For each operating lease, we calculate a lease liability at commencement date based on the present value of lease payments over the lease term and a corresponding right-of-use (ROU) asset, adjusted for lease incentives.

ROU assets represent our right to use an underlying asset for a specified lease term and are included in other assets in our consolidated ~~statements~~balance sheet. Lease liabilities represent the present value of ~~operations as~~lease payments that we are obligated to pay arising from a ~~component~~lease and are included in other liabilities in our consolidated balance sheet. We consider the likelihood of ~~net realized investment gains~~renewal in determining the lease terms for the calculation of the ROU asset and ~~losses. See Note 5 for further discussion.~~lease liability. As most of our leases do not provide an implicit rate of interest, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate of interest when readily determinable.

Operating lease cost is calculated on a straight-line basis over the lease term and is included in other expenses in our consolidated statement of income. We amortize the ROU asset over the lease term on a pattern determined by the difference between the straight-line lease liability expense and the accretion of the imputed interest calculated on the lease liability.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

~~September~~June 30, ~~2018~~2019

Note 12 - ~~Other~~Leases - Continued

~~Income Tax~~Operating lease information is as follows:



	Three Months Ended			Six Months Ended
	June 30, 2019
	(in millions of dollars)
Lease Cost
Operating Lease Cost	$	7.1		$	14.6
Sublease Income	(0.4		)	(0.8		)
Total Lease Cost	$	6.7		$	13.8

Other Information
Cash Paid for Amounts Included in the Measurement of Lease Liabilities	$	7.3		$	14.6
Weighted-Average Remaining Lease Term				7 years
Weighted-Average Discount Rate				4.68		%

On December 22, 2017, the U.S. Federal government enacted the TCJA, which reduces the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Securities and Exchange Commission Staff Accounting Bulletin (SAB) 118 has provided guidance for companies that have not completed their accounting for the income tax effects of the TCJA, allowing for a measurement period of up to one year after the enactment date to finalize the recording of the related tax impacts. During the fourth quarter of 2017, our income tax expense included a provisional benefit of $31.5 million, consisting of a $97.9 million benefit related to the revaluation of our net deferred tax liabilities associated with our U.S. operations to the newly enacted U.S. corporate tax rate and a tax expense of $66.4 million resulting from the tax on undistributed and previously untaxed foreign earnings and profits (Repatriation Tax).

As of ~~September~~June 30, ~~2018, we have not completed~~2019 aggregate undiscounted minimum net lease payments and the reconciliation to our ~~accounting for~~lease liability are as follows:



Remainder of 2019	$	13.9
2020	25.0
2021	21.5
2022	18.0
2023	12.4
2024 and Thereafter	49.5
Total	$	140.3
Less Imputed Interest	22.8
Lease Liability	$	117.5

As of June 30, 2019, the ~~tax effects of the enactment of the TCJA; however, we increased our provisional Repatriation Tax estimate by $11.5 million to $77.9~~right-of-use asset was $111.5 million. We will continue to refine our calculations as additional analysis is completed and record the final amounts during the one year measurement period after the enactment date as allowed by SAB 118. Tax rate estimates recorded at December 31, 2017 and September 30, 2018 may be impacted by changes in accounting and tax interpretations of the TCJA legislation.

Note 13 - Debt

During the ~~third quarter~~six months ended June 30, 2019, we made principal payments of ~~2018, we recorded a $266.5~~$30.0 million ~~gross unrecognized tax benefit liability for a tax reserving position we have taken~~ on our ~~2017 tax return~~senior secured non-recourse notes issued by Northwind Holdings, LLC.

In April 2019, we amended the terms of our existing five-year unsecured revolving credit facility, increasing it from $400.0 million to $500.0 million. The credit facility, which ~~if recognized, would decrease our tax expense by $112.9~~was previously set to expire in 2021, was extended through April 2024. Under the terms of the amended agreement, we may request that the credit facility be increased up to $700.0 million, up from the previous amount of $600.0 million. We ~~recognize interest expense~~also may request, on up to two occasions, that the lenders' commitment termination dates be extended by one year. The credit facility provides for the issuance of letters of credit subject to certain terms and ~~penalties, if applicable, related~~limitations. At June 30, 2019, letters of credit totaling $2.0 million had been issued from the credit facility, but there were no borrowed amounts outstanding.

Also in April 2019, we separately entered into a three-year, $100.0 million unsecured revolving credit facility with a different syndicate of lenders, which is set to ~~unrecognized tax benefits~~expire in ~~tax expense, net of federal income tax. We have not recorded penalties with respect to~~April 2022. Under the ~~unrecognized tax benefit recorded in the third quarter of 2018 as the technical merits~~terms of the ~~position~~agreement, we may request that the credit facility be increased up to $140.0 million. We also may request that the lenders' commitment termination dates be extended by

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Unum Group and Subsidiaries

June 30, 2019

Note 13 - Debt - Continued

one year. The credit facility provides for the issuance of letters of credit subject to certain terms and limitations. At June 30, 2019, there have ~~authority~~been no letters of credit issued from the credit facility and there were no borrowed amounts outstanding.

Borrowings under the credit facilities are for general corporate uses and are subject to ~~prevent any assessment~~financial covenants, negative covenants, and events of ~~penalty.~~default that are customary. The two primary financial covenants include limitations based on our leverage ratio and consolidated net worth. We ~~have not recorded~~are also subject to covenants that limit subsidiary indebtedness. The credit facilities provide for borrowings at an interest ~~with respect to~~rate based either on the unrecognized tax benefit, as we currently have sufficient funds on account with the IRS to prevent the accrual of interest. We believe it is reasonably possible this item could reverse in the next 12 months.prime rate or LIBOR.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

Unum Group, a Delaware general business corporation, and its insurance and non-insurance subsidiaries, which collectively with Unum Group we refer to as the Company, operate in the United States, the United Kingdom, Poland and, to a limited extent, in certain other countries. The principal operating subsidiaries in the United States are Unum Life Insurance Company of America, Provident Life and Accident Insurance Company, The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company, Starmount Life Insurance Company, ~~and~~ in the United Kingdom, Unum ~~Limited.~~Limited, and in Poland, Unum Zycie TUiR S.A. (Unum Poland). We are a leading provider of financial protection benefits in the United States and the United Kingdom. Our products include disability, life, accident, critical illness, dental and vision, and other related services. We market our products primarily through the workplace.

We have three principal operating business segments: Unum US, Unum ~~UK,~~International, and Colonial Life. Our other segments are the Closed Block and Corporate segments. These segments are discussed more fully under "Segment Results" included herein in this Item 2.

The benefits we provide help protect people from the financial hardship of illness, injury, or loss of life by providing support when it is needed most. As one of the leading providers of employee benefits in the U.S. and the U.K., we offer a broad portfolio of products and services through the workplace.

Specifically, we offer group, individual, and voluntary benefits, either as stand-alone products or combined with other coverages, that help employers of all sizes attract and retain a stronger workforce while protecting the incomes and livelihood of their employees. We believe employer-sponsored benefits represent the single most effective way to provide workers with access to the information and options they need to protect their financial stability. Working people and their families, particularly those at lower and middle incomes, are perhaps the most vulnerable in today's economy yet are often overlooked by many providers of financial services and products. For many of these people, employer-sponsored benefits are the primary defense against the potentially catastrophic fallout of death, illness, or injury.

We have established a corporate culture consistent with the social values our products provide. We are committed not only to meeting the needs of our customers who depend on us, but also to operating with integrity and being accountable for our actions. Our sound and consistent business practices, strong internal compliance program, and comprehensive risk management strategy enable us to operate efficiently as well as to identify and address potential areas of risk in our business. We have also applied these same values to our social responsibility efforts. Because we see important links between the obligations we have to all of our stakeholders, we place a strong emphasis on contributing to positive change in our communities.

This discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto in Part I, Item 1 contained in this Form 10-Q and with the "Cautionary Statement Regarding Forward-Looking Statements" included below the Table of Contents, as well as the discussion, analysis, and consolidated financial statements and notes thereto in Part I, Items 1 and 1A, and Part II, Items 6, 7, 7A, and 8 of our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Operating Performance and Capital Management

For the ~~third~~second quarter of ~~2018,~~2019, we reported a net ~~loss~~income of ~~$284.7~~$281.2 million, or ~~$1.30~~$1.33 per common share, compared to net income of ~~$252.3~~$285.5 million, or ~~$1.12~~$1.29 per diluted common share, in the same period of ~~2017.~~2018. For the first ~~nine~~six months of ~~2018,~~2019, net income was ~~$274.3~~$562.1 million, or ~~$1.24~~$2.64 per diluted common share, compared to net income of ~~$727.3~~$559.0 million, or ~~$3.19~~$2.52 per diluted common share in the same period of ~~2017.~~2018. Net income ~~(loss)~~ includes net realized investment gains and losses. Also included in net income (loss) for the third quarter and first nine months of 2018 is a reserve increase related to our long-term care block of business of $750.8 million before tax and $593.1 million after tax, or $2.71 and $2.68 per diluted common share for the third quarter and first nine months of 2018, respectively. Excluding net realized investment gains and losses, ~~and the long-term care reserve increase,~~ after-tax adjusted operating income in the ~~third~~second quarter of ~~2018~~2019 was ~~$300.6~~$286.9 million, or ~~$1.37~~$1.36 per diluted common share, compared to ~~$246.1~~$287.6 million, or ~~$1.09~~$1.30 per diluted common share, in the same period of ~~2017.~~2018. After-tax adjusted operating income was ~~$863.3~~$567.2 million, or ~~$3.91~~$2.67 per diluted common share, in the first ~~nine~~six months of ~~2018. Net income, for the first nine months of 2017, also included a loss from a guaranty fund assessment related~~2019, compared to an unaffiliated insurer that was declared insolvent of $20.6 million before tax and $13.4 million after tax, or $0.06 per diluted common share. Excluding net realized investment gains and losses and the loss from a guaranty fund assessment, after-tax adjusted operating income was $722.6$562.7 million, or ~~$3.17~~$2.54 per diluted common share, in the first ~~nine~~six months of ~~2017.~~2018. See ~~additional information in Note 11 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 and~~ "Reconciliation of Non-GAAP and Other Financial Measures" contained in this Item 2 for ~~further discussion and~~ a reconciliation of these items.

Our Unum US segment reported an increase in adjusted operating income of ~~4.8~~1.3 percent and ~~2.8~~2.3 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, compared to the same periods of ~~2017,~~2018, with growth in premium income, ~~and favorable benefits experience~~ partially offset by ~~slightly~~ lower net investment income. Also impacting the results for the six months ended 2019 was higher amortization of deferred acquisition costs. The benefit ratio for our Unum US segment was ~~67.5~~67.6 percent and ~~67.1~~66.5 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, compared to ~~67.7~~67.0 percent ~~for both~~and 66.9 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2017.~~2018. Unum US sales ~~decreased 5.6~~increased 12.1 percent and ~~1.3~~5.9 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, compared to the same periods of ~~2017. Persistency was generally favorable relative~~2018. Relative to the prior year, persistency in our group product lines was favorable while persistency in our supplemental and ~~is consistent with our expectations.~~voluntary product lines was less favorable.

Our Unum UKInternational segment reported ~~a decrease~~an increase in adjusted operating income, as measured in ~~Unum UK's local currency,~~U.S. dollars, of ~~1.0~~11.2 percent and ~~3.7~~4.2 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, compared to the same periods of ~~2017,~~2018. As measured in local currency, our Unum UK line of business reported an increase in adjusted operating income of 11.3 percent and 6.0 percent in the second quarter and first six months of 2019, respectively, compared to the same periods of 2018, due to ~~lower~~premium growth and higher net investment income, partially offset by ~~higher premium income and stable~~unfavorable benefits experience. The benefit ratio for Unum UK was ~~74.2~~85.6 percent and 78.1 percent in the second quarter and first six months of 2019, respectively, compared to 76.7 percent and 74.3 percent in the ~~third quarter and first nine months of 2018, respectively, compared to 74.9 percent and 74.0 percent in the~~ same periods of ~~2017.~~2018. Unum UK sales in local currency increased ~~2.4~~0.5 percent and 7.6 percent in the ~~third~~second quarter and first six months of ~~2018~~2019 compared to the same ~~period~~periods of ~~2017 but decreased 5.2 percent in the first nine months of 2018, compared to the same period of 2017.~~2018. Persistency was favorable relative to the prior ~~year and is consistent with our expectations.~~year.

Our Colonial Life segment reported a decrease in adjusted operating income of 0.2 percent in the second quarter of 2019 compared to the same period of 2018 but reported an increase of 2.4 percent in the first six months of 2019 compared to the same period of 2018. Impacting the results in each period was premium growth, lower net investment income, and higher amortization of deferred acquisition costs. The benefit ratio for Colonial Life was 51.4 percent and 51.2 percent in the second quarter and first six months of 2019, respectively, compared to 51.0 percent and 51.3 percent in the same periods of 2018. Colonial Life sales decreased 4.2 percent and 0.2 percent in the second quarter and first six months of 2019, respectively, compared to the same periods of 2018. Persistency was lower relative to the prior year.

Our Closed Block segment reported an increase in adjusted operating income of ~~3.1~~13.9 percent and ~~1.6~~10.6 percent in the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, compared to the same periods of ~~2017,~~2018, due primarily to growth in premium income and higher net investment income. The benefit ratio for Colonial Life was 51.5 percent and 51.4 percent in the third quarter and first nine months of 2018, respectively, compared to 51.8 percent and 51.3 percent in the same periods of 2017. Colonial Life sales increased 13.0 percent and 11.6 percent in the third quarter and first nine months of 2018, respectively, compared to the same periods of 2017. Persistency was unfavorable relative to the prior year but is consistent with our expectations.

Our Closed Block segment reported a loss of $718.6 million and $660.1 million in the third quarter and first nine months of 2018, respectively. Excluding the long-term care reserve increase, adjusted operating income increased 21.1 percent in the third quarter of 2018, compared to the same period of 2017, due primarily an increase in net investment income, ~~and overall favorable benefits experience,~~ partially offset by lower premium income. ~~Adjusted operating income during the first nine months of 2018 was generally consistent with the same period of 2017.~~ Benefits experience in our individual disability line of business remains consistent with our expectations, ~~and was~~with favorable experience in the ~~third~~second quarter ~~and first nine months~~ of ~~2018~~2019 compared to the same prior year ~~periods.~~period and slightly unfavorable experience during the first six months of 2019 compared to the same prior year period. Benefits experience in our long-term care line of business, ~~excluding~~during the ~~reserve increase,~~second quarter and first six months of 2019 was not comparable to the same prior year periods due to the update in our assumptions during the third quarter of 2018, but was consistent with our ~~expectations in the third quarter of 2018.~~expectations.

Although our profit margins continue to be pressured by the impact of the low interest rate environment on our net investment income yields, our invested asset quality remains strong. The net unrealized gain on our fixed maturity securities was ~~$3.2~~$5.6 billion at ~~September~~June 30, ~~2018~~2019 compared to ~~$5.7~~$2.7 billion at December 31, ~~2017,~~2018, with the ~~decline~~increase due to ~~an increase~~a decrease in U.S. Treasury rates and credit spreads during the first ~~nine~~six months of ~~2018.~~2019. The earned book yield on our investment portfolio was ~~5.17~~5.04 percent for the first ~~nine~~six months of ~~2018~~2019 compared to a yield of ~~5.23~~5.15 percent for full year ~~2017.~~2018.

We believe our capital and financial positions are strong. At ~~September~~June 30, ~~2018,~~2019, the risk-based capital (RBC) ratio for our traditional U.S. insurance subsidiaries, calculated on a weighted average basis using the NAIC Company Action Level formula, was approximately ~~385~~365 percent, which is in line with our expectations. During the first ~~nine~~six months of ~~2018,~~2019, we repurchased ~~4.4~~5.6 million shares of Unum Group common stock under our share repurchase program, at a cost of approximately $200 million. Our

weighted average common shares outstanding, assuming dilution, equaled ~~218.9~~211.1 million and ~~226.0~~221.1 million for the ~~third~~second quarter of ~~2018~~2019 and ~~2017,~~2018, respectively, and ~~220.9~~212.8 million and ~~228.2~~221.8 million for ~~the~~ first ~~nine~~six months of ~~2018~~2019 and ~~2017,~~2018, respectively, reflecting our capital management strategy of returning capital to shareholders through repurchases of our common stock. As of ~~September~~June 30, ~~2018,~~2019, Unum Group and our intermediate holding companies held fixed maturity securities, short-term investments, and cash of ~~$973~~$977 million.

2018 Long-term Care Reserve Increase

Policy reserves for our long-term care block of business are determined using the gross premium valuation method and, prior to the third quarter of 2018, were valued based on assumptions established as of December 31, 2014, the date of our last assumption update under loss recognition. Gross premium valuation assumptions do not change after the date of loss recognition unless reserves are again determined to be deficient. We undertake a review of policy reserve adequacy annually during the fourth quarter of each year, or more frequently if appropriate, using best estimate assumptions as of the date of the review.

During the third quarter of 2018, we completed our annual review of policy reserve adequacy, which incorporated our most recent experience and included a review of all assumptions. The review utilized internal and external data and outside consulting firms for quality assurance and industry benchmarking. Based on our analysis, during the third quarter of 2018, we updated our reserve assumptions ~~as discussed in the following paragraphs. In addition, we have also included a sensitivity analysis for these assumptions for both favorable~~ and unfavorable deviations applied throughout the entire life of the block. This sensitivity analysis was completed as of the date of our assumption update announcement and will not be updated unless reserves are again determined to be deficient in the future.

We updated our active policy termination assumptions, which are affected by both policyholder mortality and lapses. We aligned our mortality assumptions with industry data based on a 2012 individual annuitant mortality industry table, adjusted for our experience in earlier policy durations. We also lowered our lapse assumptions for individual policies based on emerging company experience, which resulted in an ultimate lapse rate of 0.25 percent. A six percent unfavorable change in the active policy termination assumption would result in approximately a $330 million decrease to reserve margin and a six percent favorable change would result in approximately a $320 million increase to reserve margin.

We updated our claims incidence assumptions to consider both the elevated claim levels that we have recently experienced as well as longer term experience based on our analysis of numerous claim factors, including variations by age, gender, product, premium funding method, and other factors. A 2.5 percent unfavorable change in the claim incidence assumption would result in approximately a $290 million decrease to reserve margin and a 2.5 percent favorable change would result in approximately a $300 million increase to reserve margin.

We updated our claim termination assumptions, which are primarily affected by the death, and to a lesser extent, the recovery of the insured to largely reflect our experience, which considers seasonality as well as the dynamics of an overall aging block. A three percent unfavorable change in the claim termination assumption would result in approximately a $370 million decrease to reserve margin and a three percent favorable change would result in approximately a $360 million increase to reserve margin.

We have observed morbidity improvement in our own claims experience over a ten year period of approximately three percent per year, normalized for variables such as age and claim type. However, we believe that a longer-term view is the best way to evaluate this type of improvement. Accordingly, we updated our morbidity assumptions to reflect minor improvement, one percent per year, including a partially offsetting assumption of 0.6 percent per year mortality improvement. If no improvement occurs in the morbidity and mortality assumptions, reserve margin would decrease by approximately $1 billion. If a three percent per year improvement in the morbidity and mortality assumptions occurs, reserve margin would increase by approximately $1.6 billion.

We updated our premium rate increase assumptions to reflect both our estimate of previously filed rate increases, informed by our historical approval rates, and our anticipated future rate filings. The impact of the update to the premium rate increase assumptions resulted in approximately a $1.4 billion decrease to reserves, of which approximately $700 million relates to currently outstanding requests pending approval with the remaining $700 million related to future rate increase submissions, with a focus on group policies, that will be completed and filed during the next several quarters. A ten percent

~~change in the premium rate increase success rate assumption would result in an approximately $140 million change in reserve margin depending on whether the change was favorable or unfavorable.~~

We updated our discount rate assumption to reflect our expectation for the low interest rate environment to persist and our expected impact on future long-term care new money yield rates. Our updated expectation for long-term care new money yield rates assumes a rate of 5.5 percent through 2021 and then a gradual increase to 6.25 percent by 2025, when we assume no further increase. A 0.25 percent change in the new money yield rate assumption would result in an approximately $250 million change in reserve margin depending on whether the change was favorable or unfavorable.

~~Using these revised best estimate assumptions, we~~ determined that our policy and claim reserves should be increased by $750.8 million, or $593.1 million after-tax, ~~during the third quarter of 2018~~ to reflect our current estimate of future benefit obligations. This increase was primarily driven by the update to our liability and interest rate assumptions, particularly claims incidence and claim termination rates, which resulted in an increase to reserves of approximately $2.2 billion. Partially offsetting the increase was the update to our assumptions for premium rate increases which decreased reserves approximately $1.4 billion, ~~as previously discussed,~~ resulting in the net increase to reserves of $750.8 million.

~~U.S. Tax Reform~~

On December 22, 2017, the U.S. Federal government enacted a tax bill, H.R.1, An Act to Provide Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, more commonly known as the Tax Cuts and Jobs Act (TCJA). The TCJA, among other things, included a reduction to the U.S. corporate statutory tax rate from 35 percent to 21 percent, the impact of which resulted in a favorable comparison in our effective tax rate in the third quarter and first nine months of 2018 compared to the same periods of 2017. See Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Consolidated Operating Results" contained herein in Item 2 for further details.

U.K. Referendum

During 2016, the U.K. held a referendum and voted to leave the EU. The U.K. subsequently invoked Article 50 of the Treaty on European Union (EU) and ~~is due~~the deadline to leave the EU onis currently set for October 31, 2019, which was recently extended from the original date of March 29, 2019. We may see some continued dampening of growth in the U.K. as well as earnings volatility due to the current disruption and uncertainty in the U.K. economy. We may also experience volatility in the fair values of our investments in U.K. and EU-based issuers, but we do not expect a material increase in other-than-temporary impairments or defaults, nor do we believe this volatility will impact our ability to hold these investments. The magnitude and longevity of potential negative economic impacts on our growth will depend on ~~the agreements~~whether an agreement is reached bybetween the U.K. and EU as a result of exit negotiations and, if reached, the nature of the agreement and the resulting response of the U.K. marketplace. There are currently no indications that capital requirements for our U.K. operations will change, but economic conditions may cause volatility in our solvency ratios. Our reported consolidated financial results may continue to be impacted by fluctuations in the British pound sterling to dollar exchange rate. Further discussion is contained herein in "Unum UKInternational Segment" in this Item 2.

~~Definitive Purchase Agreement~~

On October 1, 2018, we completed our purchase of Pramerica Zycie TUiR SA ("Pramerica"), a financial protection benefits provider in Poland. The acquisition of Pramerica will expand our European presence, which we believe to be an attractive market for financial protection benefits. This acquisition is not expected to materially impact our results of operations or financial position for 2018 or alter our share repurchase and common stock dividend strategy.

Consolidated Company Outlook

We believe our disciplined approach to providing financial protection products at the workplace puts us in a position of strength as we seek to capitalize on the growing and largely unfilled need for our products and services. We believe the need for our products and services remains strong, and we intend to continue protecting our solid margins and returns through our pricing and risk actions. ~~We continue to invest in~~Our strategy is underpinned by our ~~infrastructure~~core values and ~~our employees, with a focus on quality and simplification of processes and offerings. Our strategy~~ is centered on market growth through the expansion of our product portfolio, distribution system, and geographic footprint, and enhancing the customer experience ~~providing an innovative product portfolio of financial protection choices,~~through efficiency, simplification, and ~~investing~~investment in ~~new solutions~~digital capabilities.

We expect to ~~further improve productivity.~~

~~Our outlook for the remainder of 2018 is for~~see continued solid premium growth trends in our core businesses, with stable persistency and a disciplined approach to sales growth. We expect to have generally stable benefits experience due to our focus on disciplined pricing, risk selection, and management of renewals. We will maintain our commitment to expense discipline and improving our operational efficiencies.

We do not expect that the long-term care reserve increase will impact our ability to execute on our capital deployment plans, including our share repurchase strategy. We currently intend to resume share repurchases beginning in the fourth quarter of 2018.

The low interest rate environment continues to place pressure on our profit margins. Accordingly, we will continue to gradually increase our allocation to alternative assets, particularly in our long-term care line of business, while still adhering to our disciplined risk management strategy. This increase in allocation may cause an increase in volatility in our net investment income. Our reported consolidated financial results may also continue to be unfavorably impacted by political and economic uncertainty in the U.K., specifically lower interest rates, wage inflation and employer spending, and claims ~~volatility due to the U.K. Referendum. As a result of tax reform, we~~volatility. We expect our ~~quarterly~~ effective tax rate ~~going forward~~for 2019 to ~~generally~~ be approximately 20 percent. The reduction in the ~~range~~corporate tax rate resulting from tax reform has improved the statutory earnings and cash generation of ~~19 percent to 20 percent and~~ our insurance subsidiaries ~~to generate stronger statutory earnings~~ and ~~long-term cash generation. While we intend to maintain aggregate~~our capital levels in our statutory entities consistent with our current levels, our year-end 2018 RBC ratios will decline primarily as a result of the higher RBC factors adopted by the NAIC in response to the lower U.S. statutory income tax rate.position remains strong.

We continue to analyze and employ strategies that we believe will help us navigate the current environment and allow us to maintain solid operating margins and significant financial flexibility to support the needs of our businesses, while also continuing to return capital to our shareholders and exploring merger and acquisition opportunities to enhance our business lines. We have substantial leverage to rising interest rates and an improving economy which generates payroll growth and wage inflation. We believe that consistent operating results, combined with the implementation of strategic initiatives and the effective deployment of capital, will allow us to meet our long-term financial objectives.

Further discussion is contained in this Item 2 and in the "Notes to Consolidated Financial Statements" contained herein in Item 1.

Reconciliation of Non-GAAP and Other Financial Measures

We analyze our 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 measure of "after-tax adjusted operating income" differs from net income ~~(loss)~~ as presented in our consolidated operating results and income statements ~~of operations~~ prepared in accordance with GAAP due to the exclusion of net realized investment gains and losses ~~and certain other items~~ as specified in the reconciliations below. We believe after-tax adjusted operating income is a better performance measure and better indicator of the 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.

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,~~fundamentals. We exclude these items as we believe them to be infrequent or unusual in nature, 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. See "Executive Summary" contained herein in this Item 2 and Note 7 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion regarding the long-term care reserve increase. See Note 11 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion regarding the loss from a guaranty fund assessment.

A reconciliation of GAAP financial measures to our non-GAAP financial measures is as follows:


	Three Months Ended September 30												Three Months Ended June 30
	2018						2017						2019						2018
	(in millions)			per share *			(in millions)			per share *			(in millions)			per share *			(in millions)			per share *
Net Income (Loss)	$	(284.7	)	$	(1.30	)	$	252.3		$	1.12
Net Income													$	281.2		$	1.33		$	285.5		$	1.29
Excluding:
Net Realized Investment Gain (net of tax expense (benefit) of $(1.1); $3.6)	7.8			0.04			6.2			0.03
Long-term Care Reserve Increase (net of tax benefit of $157.7; $-)	(593.1		)	(2.71		)	—			—
Net Realized Investment Loss (net of tax benefit of $1.6; $0.5)													(5.7		)	(0.03		)	(2.1		)	(0.01		)
After-tax Adjusted Operating Income	$	300.6		$	1.37		$	246.1		$	1.09		$	286.9		$	1.36		$	287.6		$	1.30

	Nine Months Ended September 30												Six Months Ended June 30
	2018						2017						2019						2018
	(in millions)			per share *			(in millions)			per share *			(in millions)			per share *			(in millions)			per share *
Net Income	$	274.3		$	1.24		$	727.3		$	3.19		$	562.1		$	2.64		$	559.0		$	2.52
Excluding:
Net Realized Investment Gain (net of tax expense (benefit) of $(2.2); $10.8)	4.1			0.01			18.1			0.08
Loss from Guaranty Fund Assessment (net of tax benefit of $-; $7.2)	—			—			(13.4		)	(0.06		)
Long-term Care Reserve Increase (net of tax benefit of $157.7; $-)	(593.1		)	(2.68		)	—			—
Net Realized Investment Loss (net of tax benefit of $1.1; $1.1)													(5.1		)	(0.03		)	(3.7		)	(0.02		)
After-tax Adjusted Operating Income	$	863.3		$	3.91		$	722.6		$	3.17		$	567.2		$	2.67		$	562.7		$	2.54

* Assuming Dilution

We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income ~~(loss)~~ before income tax as presented in our consolidated statements of ~~operations~~income due to the exclusion of net realized investment gains and losses ~~and certain other items~~ as specified in the reconciliations below. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income ~~(loss)~~ before income tax, or net ~~income (loss).~~income.

A reconciliation of total revenue to "adjusted operating revenue" and income ~~(loss)~~ before income tax to "adjusted operating income" is as follows:


	Three Months Ended September 30					Nine Months Ended September 30						Three Months Ended June 30						Six Months Ended June 30
	2018			2017		2018			2017			2019			2018			2019			2018
	(in millions of dollars)											(in millions of dollars)
Total Revenue	$	2,927.8		$	2,819.1	$	8,717.7		$	8,447.6		$	3,016.7		$	2,890.3		$	6,004.3		$	5,789.9
Excluding:
Net Realized Investment Gain	6.7			9.8		1.9			28.9
Net Realized Investment Loss												(7.3		)	(2.6		)	(6.2		)	(4.8		)
Adjusted Operating Revenue	$	2,921.1		$	2,809.3	$	8,715.8		$	8,418.7		$	3,024.0		$	2,892.9		$	6,010.5		$	5,794.7

Income (Loss) Before Income Tax	$	(377.8	)	$	366.8	$	318.1		$	1,058.7
Income Before Income Tax												$	352.0		$	354.8		$	705.3		$	695.9
Excluding:
Net Realized Investment Gain	6.7			9.8		1.9			28.9
Loss from Guaranty Fund Assessment	—			—		—			(20.6		)
Long-Term Care Reserve Increase	(750.8		)	—		(750.8		)	—
Net Realized Investment Loss												(7.3		)	(2.6		)	(6.2		)	(4.8		)
Adjusted Operating Income	$	366.3		$	357.0	$	1,067.0		$	1,050.4		$	359.3		$	357.4		$	711.5		$	700.7

Critical Accounting Estimates

We prepare our financial statements in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in our financial statements and accompanying notes. Estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in our financial statements.

The accounting estimates deemed to be most critical to our financial position and results of operations are those related to reserves for policy and contract benefits, deferred acquisition costs, valuation of investments, pension and postretirement benefit plans, income taxes, and contingent liabilities. There have been no significant changes in our critical accounting estimates during the first ~~nine~~six months of ~~2018.~~2019.

For additional information, refer to our significant accounting policies in Note 1 of the "Notes to Consolidated Financial Statements" in Part II, Item 8 and "Critical Accounting Estimates" in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Accounting Developments

See Note 2 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information on accounting developments.

Consolidated Operating Results


(in millions of dollars)
	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended June 30								Six Months Ended June 30
	2018			% Change		2017			2018			% Change		2017			2019			% Change		2018			2019			% Change		2018
						As Adjusted								As Adjusted
Revenue
Premium Income	$	2,251.8		4.6	%	$	2,153.6		$	6,722.8		4.4	%	$	6,438.7		$	2,343.1		5.5	%	$	2,221.0		$	4,681.8		4.7	%	$	4,471.0
Net Investment Income	619.2			1.7		609.0			1,845.1			0.7		1,831.9			624.9			0.2		623.6			1,219.6			(0.5	)	1,225.9
Net Realized Investment Gain	6.7			(31.6	)	9.8			1.9			(93.4	)	28.9
Net Realized Investment Loss																	(7.3		)	180.8		(2.6		)	(6.2		)	29.2		(4.8		)
Other Income	50.1			7.3		46.7			147.9			(0.1	)	148.1			56.0			15.9		48.3			109.1			11.6		97.8
Total Revenue	2,927.8			3.9		2,819.1			8,717.7			3.2		8,447.6			3,016.7			4.4		2,890.3			6,004.3			3.7		5,789.9

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	2,578.9			46.1		1,765.6			6,190.9			17.6		5,266.6			1,902.6			5.5		1,804.1			3,743.4			3.6		3,612.0
Commissions	276.8			5.5		262.4			832.6			4.9		793.9			284.4			4.0		273.5			574.5			3.4		555.8
Interest and Debt Expense	42.7			6.5		40.1			125.3			4.6		119.8			42.6			0.5		42.4			84.7			2.5		82.6
Deferral of Acquisition Costs	(166.8		)	7.8		(154.8		)	(501.8		)	6.7		(470.1		)	(170.3		)	2.8		(165.7		)	(344.0		)	2.7		(335.0		)
Amortization of Deferred Acquisition Costs	136.9			10.7		123.7			428.6			6.2		403.5			151.6			8.1		140.2			322.2			10.5		291.7
Compensation Expense	224.2			0.2		223.8			666.1			2.4		650.6			223.9			1.7		220.2			450.4			1.9		441.9
Other Expenses	212.9			11.2		191.5			657.9			5.3		624.6			229.9			4.1		220.8			467.8			5.1		445.0
Total Benefits and Expenses	3,305.6			34.8		2,452.3			8,399.6			13.7		7,388.9			2,664.7			5.1		2,535.5			5,299.0			4.0		5,094.0

Income (Loss) Before Income Tax Expense (Benefit)	(377.8		)	(203.0	)	366.8			318.1			(70.0	)	1,058.7
Income Tax Expense (Benefit)	(93.1		)	(181.3	)	114.5			43.8			(86.8	)	331.4
Income Before Income Tax																	352.0			(0.8	)	354.8			705.3			1.4		695.9
Income Tax Expense																	70.8			2.2		69.3			143.2			4.6		136.9

Net Income (Loss)	$	(284.7	)	(212.8	)	$	252.3		$	274.3		(62.3	)	$	727.3
Net Income																	$	281.2		(1.5	)	$	285.5		$	562.1		0.6		$	559.0

~~The comparability of our financial results~~Fluctuations in exchange rates, particularly between ~~years is affected by the fluctuation in~~ the British pound sterling toand the U.S. dollar ~~exchange rate. The functional currency of~~for our U.K. operations, ~~is the British pound sterling.~~have an effect on our consolidated financial results. In periods when the pound strengthens, ~~relative to the preceding period,~~ translating pounds into dollars increases current period results relative to the prior period. In periods when the pound weakens relative to the preceding period, translating pounds into dollars decreases current period results relative to the prior period.

~~Our~~The weighted average pound/dollar exchange rate for our Unum UK line of business was ~~1.305~~1.286 and ~~1.312~~1.353 for the three months ended ~~September~~June 30, 2019 and 2018, and ~~2017,~~1.296 and ~~1.351 and 1.277~~1.373 for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively. If ~~2017~~2018 results had been translated at the lower exchange rates of ~~2018,~~2019, our adjusted operating revenue and adjusted operating income by segment would have both been lower by ~~less than $1 million in the third quarter of 2017, and higher by~~ approximately ~~$28~~$9 million and $5$1 million, respectively, in the ~~nine~~second quarter of 2018, and lower by approximately $20 million and $3 million, respectively, in the first six months of ~~2017.~~2018. However, it is important to distinguish between translating and converting foreign currency. WeExcept for a limited number of transactions, we do not actually convert pounds into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K.

Premium income for the ~~third~~second quarter and ~~the~~ first ~~nine~~six months of ~~2018~~2019 increased relative to the same periods of ~~2017,~~2018, with growth in each of our principal operating business segments, ~~as measured in local currency,~~ due to overall sales growth, the expansion of our dental and vision products, the addition of our Unum Poland line of business, and generally ~~favorable~~stable persistency. Premium income continues to decline, as expected, in our Closed Block segment.

Net investment income ~~increased~~was generally consistent in the ~~third~~second quarter ~~and the first nine months~~ of ~~2018~~2019 relative to the same ~~periods~~period of ~~2017~~2018 but was lower during the first six months of 2019, relative to the same period of 2018, due to a decline in the yield on invested assets and lower miscellaneous investment income, partially offset by an increase in the level of invested ~~assets and higher miscellaneous investment income, partially offset by a decline in the yield on invested~~ assets.

There were no other-than-temporary impairment losses on fixed maturity securities included in net realized investment gains and losses for the ~~third~~second quarter of 2019 or 2018, ~~and 2017,~~ or for the first ~~nine~~six months of ~~2017.~~2019. We recognized $1.0 million of other-than-temporary impairment losses on fixed maturity securities in net realized investment gains and losses during the first ~~nine~~six months of 2018. Also included in net realized investment gains and losses were changes in the fair value of an embedded derivative in a modified coinsurance arrangement, which resulted in realized gains (losses) of ~~$6.1~~$(0.8) million and ~~$6.7~~$(2.3) million in the ~~third~~second quarters of ~~2018~~2019 and ~~2017,~~2018, respectively, and ~~$2.1~~$4.7 million and ~~$21.5~~$(4.0) million in the first ~~nine~~six months of ~~2018~~2019 and ~~2017,~~2018, respectively. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information on realized investment gains and losses.

Other income increased in the second quarter and first six months of 2019 compared to the same periods of 2018 due primarily to growth in our fee-based service products in our Unum US segment, which include family medical leave and administrative services only (ASO) products.

Overall benefits experience was ~~unfavorable~~consistent in the ~~third~~second quarter of 2019 and favorable during the first ~~nine~~six months of ~~2018~~2019 relative to the same ~~prior year periods. Excluding the third quarter of 2018 long-term care reserve increase, overall benefits experience was generally stable relative to the~~ prior year periods. The benefits experience for each of our operating business segments is discussed more fully in "Segment Results" as follows.

Commissions and the deferral of acquisition costs increased in the ~~third~~second quarter and first ~~nine~~six months of ~~2018~~2019 relative to the same periods of ~~2017~~2018 driven primarily by sales growth. Growth in the level of the deferred asset in our Unum US and Colonial Life segments and the impact of the prospective unlocking for future experience relative to assumptions in certain of our Colonial life products resulted in higher amortization in the ~~third~~second quarter and first ~~nine~~six months of ~~2018~~2019 compared to the same prior year periods. Also contributing to the increase for the first six months was a higher level of policy terminations experienced in the Unum US voluntary benefits line of business.

Interest and debt expense was slightly higher in the ~~third~~second quarter and first ~~nine~~six months of ~~2018~~2019 relative to the same periods of ~~2017~~2018 due primarily to a higher level of outstanding ~~debt and a higher overall rate of interest.~~debt.

Other expenses, including compensation expense, increased in the ~~third~~second quarter and first ~~nine~~six months of ~~2018~~2019 relative to the same periods of 2017. Excluding the loss from a guaranty fund assessment related to an unaffiliated insurer that was declared insolvent included in the first nine months of 2017, the year-over-year growth rates in compensation and other expenses more than offset the premium growth rate, resulting in a slight increase in2018, however, the other expense ~~ratios~~ratio decreased relative to the prior year ~~periods as we continue~~due to growth in premium income and our continued balancing ~~our~~of investments in the growth of our ~~businesses~~business with our continued focus on expense management and operating efficiencies.

Our effective income tax rates for the ~~third~~second quarter and first ~~nine~~six months of ~~2018~~2019 were ~~24.7~~20.1 percent and ~~13.8~~20.3 percent of income before income tax, respectively, compared to ~~31.2~~19.5 percent and ~~31.3~~19.7 percent for the prior year periods. The decline in the 2018 effective rate was due to the enactment of the TCJA in the fourth quarter of 2017, which reduced the federal corporate tax rate from 35 percent to 21 percent effective January 1, 2018. Our effective tax rate differed from the U.S. statutory rate in effect for the ~~third~~second quarter and first ~~nine~~six months of 2019 and 2018 primarily due to ~~favorable~~ tax credits and adjustments related to our prior year tax return, which includes a partial offset related to an increase in our estimate of the Repatriation Tax. Our effective tax rate differed from the U.S. statutory rate in effect for the third quarter and first nine months of 2017 due primarily to tax credits as well as foreign earnings which were taxed at lower rates than the U.S. statutory rate. See Note 12 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion.credits.

Consolidated Sales Results

Shown below are sales results for our three principal operating business segments.


(in millions)
	Three Months Ended September 30						Nine Months Ended September 30						Three Months Ended June 30						Six Months Ended June 30
	2018		% Change		2017		2018		% Change		2017		2019		% Change		2018		2019		% Change		2018
Unum US	$	152.7	(5.6	)%	$	161.8	$	625.0	(1.3	)%	$	633.3	$	221.7	12.1	%	$	197.7	$	500.1	5.9	%	$	472.3

Unum UK	£	13.0	2.4	%	£	12.7	£	45.9	(5.2	)%	£	48.4
Unum International													$	29.7	4.9	%	$	28.3	$	52.3	15.2	%	$	45.4

Colonial Life	$	120.8	13.0	%	$	106.9	$	356.9	11.6	%	$	319.9	$	126.9	(4.2	)%	$	132.4	$	235.7	(0.2	)%	$	236.1

Sales shown in the preceding chart generally represent the annualized premium income on new sales which we expect to receive and report as premium income during the next 12 months following or beginning in the initial quarter in which the sale is reported, depending on the effective date of the new sale. Sales do not correspond to premium income reported as revenue in accordance with GAAP. This is because new annualized sales premiums reflect current sales performance and what we expect to recognize as premium income over a 12 month period, while premium income reported in our financial statements is reported on an "as earned" basis rather than an annualized basis and also includes renewals and persistency of in-force policies written in prior years as well as current new sales.

Sales, persistency of the existing block of business, employment and salary growth, and the effectiveness of a renewal program are indicators of growth in premium income. Trends in new sales, as well as existing market share, also indicate the potential for growth in our respective markets and the level of market acceptance of price ~~changes~~levels and new product offerings. Sales results may fluctuate significantly due to case size and timing of sales submissions.

See "Segment Results" as follows for a discussion of sales by segment.

Segment Results

Our reporting segments are comprised of the following: Unum US, Unum ~~UK,~~International, Colonial Life, Closed Block, and Corporate.

Unum US Segment

The Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business, which are comprised of individual disability, voluntary benefits, and dental and vision products.

Unum US Operating Results

Shown below are financial results for the Unum US segment. In the sections following, financial results and key ratios are also presented for the major lines of business within the segment.


(in millions of dollars, except ratios)
	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended June 30								Six Months Ended June 30
	2018			% Change		2017			2018			% Change		2017			2019			% Change		2018			2019			% Change		2018
Adjusted Operating Revenue
Premium Income	$	1,446.2		6.3	%	$	1,360.9		$	4,301.3		5.4	%	$	4,079.0		$	1,504.5		6.2	%	$	1,416.3		$	3,006.4		5.3	%	$	2,855.1
Net Investment Income	200.3			(0.3	)	201.0			591.0			(3.0	)	609.1			184.1			(6.3	)	196.5			366.2			(6.3	)	390.7
Other Income	30.7			15.8		26.5			88.5			3.8		85.3			36.8			27.8		28.8			71.3			23.4		57.8
Total	1,677.2			5.6		1,588.4			4,980.8			4.3		4,773.4			1,725.4			5.1		1,641.6			3,443.9			4.2		3,303.6

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	975.7			6.0		920.7			2,885.9			4.6		2,759.8			1,017.1			7.1		949.3			1,997.8			4.6		1,910.2
Commissions	154.4			7.1		144.1			467.5			5.8		442.0			157.8			4.0		151.7			320.8			2.5		313.1
Deferral of Acquisition Costs	(84.6		)	8.2		(78.2		)	(259.1		)	6.2		(244.0		)	(83.4		)	(1.9	)	(85.0		)	(171.0		)	(2.0	)	(174.5		)
Amortization of Deferred Acquisition Costs	73.7			13.0		65.2			241.4			5.7		228.3			82.6			5.2		78.5			186.5			11.2		167.7
Other Expenses	287.1			3.2		278.2			879.2			4.4		842.0			297.0			0.3		296.0			603.2			1.9		592.1
Total	1,406.3			5.7		1,330.0			4,214.9			4.6		4,028.1			1,471.1			5.8		1,390.5			2,937.3			4.6		2,808.6

Adjusted Operating Income	$	270.9		4.8		$	258.4		$	765.9		2.8		$	745.3		$	254.3		1.3		$	251.1		$	506.6		2.3		$	495.0

Operating Ratios (% of Premium Income):
Benefit Ratio	67.5		%			67.7		%	67.1		%			67.7		%	67.6		%			67.0		%	66.5		%			66.9		%
Other Expense Ratio	19.9		%			20.4		%	20.4		%			20.6		%	19.7		%			20.9		%	20.1		%			20.7		%
Adjusted Operating Income Ratio	18.7		%			19.0		%	17.8		%			18.3		%	16.9		%			17.7		%	16.9		%			17.3		%

Unum US Group Disability Operating Results

Shown below are financial results and key performance indicators for Unum US group disability.


(in millions of dollars, except ratios)
	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended June 30								Six Months Ended June 30
	2018			% Change		2017			2018			% Change		2017			2019			% Change		2018			2019			% Change		2018
Adjusted Operating Revenue
Premium Income
Group Long-term Disability	$	444.1		2.0	%	$	435.2		$	1,322.7		1.2	%	$	1,307.3		$	457.2		4.5	%	$	437.4		$	910.1		3.6	%	$	878.6
Group Short-term Disability	180.4			12.0		161.1			527.7			10.6		477.3			187.6			9.7		171.0			376.3			8.4		347.3
Total Premium Income	624.5			4.7		596.3			1,850.4			3.7		1,784.6			644.8			6.0		608.4			1,286.4			4.9		1,225.9
Net Investment Income	112.9			(0.7	)	113.7			330.0			(5.0	)	347.3			98.9			(9.2	)	108.9			198.9			(8.4	)	217.1
Other Income	28.0			17.6		23.8			80.9			10.2		73.4			34.4			29.3		26.6			66.6			25.9		52.9
Total	765.4			4.3		733.8			2,261.3			2.5		2,205.3			778.1			4.6		743.9			1,551.9			3.7		1,495.9

Benefits and Expenses
Benefits and Change in Reserves for Future Benefits	476.2			4.2		457.1			1,406.8			2.9		1,366.8			481.5			3.8		463.7			960.6			3.2		930.6
Commissions	46.7			2.0		45.8			141.0			2.8		137.1			48.4			6.6		45.4			98.7			4.7		94.3
Deferral of Acquisition Costs	(12.1		)	(2.4	)	(12.4		)	(36.8		)	2.8		(35.8		)	(13.0		)	4.8		(12.4		)	(24.8		)	0.4		(24.7		)
Amortization of Deferred Acquisition Costs	11.2			12.0		10.0			33.6			12.4		29.9			13.0			16.1		11.2			25.2			12.5		22.4
Other Expenses	150.4			5.0		143.3			459.1			5.2		436.2			164.6			6.6		154.4			326.0			5.6		308.7
Total	672.4			4.4		643.8			2,003.7			3.6		1,934.2			694.5			4.9		662.3			1,385.7			4.1		1,331.3

Adjusted Operating Income	$	93.0		3.3		$	90.0		$	257.6		(5.0	)	$	271.1		$	83.6		2.5		$	81.6		$	166.2		1.0		$	164.6

Operating Ratios (% of Premium Income):
Benefit Ratio	76.3		%			76.7		%	76.0		%			76.6		%	74.7		%			76.2		%	74.7		%			75.9		%
Other Expense Ratio	24.1		%			24.0		%	24.8		%			24.4		%	25.5		%			25.4		%	25.3		%			25.2		%
Adjusted Operating Income Ratio	14.9		%			15.1		%	13.9		%			15.2		%	13.0		%			13.4		%	12.9		%			13.4		%

Persistency:
Group Long-term Disability									91.0		%			89.5		%									90.5		%			90.6		%
Group Short-term Disability									88.2		%			86.3		%									90.3		%			87.7		%

Liquidity and Capital Resources

Overview

Our liquidity requirements are met primarily by cash flows provided from operations, principally in our insurance subsidiaries. Premium and investment income, as well as maturities and sales of invested assets, provide the primary sources of cash. Debt and/or securities offerings provide additional sources of liquidity. Cash is applied to the payment of policy benefits, costs of acquiring new business (principally commissions), operating expenses, and taxes, as well as purchases of new investments.

We have established an investment strategy that we believe will provide for adequate cash flows from operations. We attempt to match our asset cash flows and durations with expected liability cash flows and durations to meet the funding requirements of our business. However, deterioration in the credit market may delay our ability to sell our positions in certain of our fixed maturity securities in a timely manner and adversely impact the price we receive for such securities, which may negatively impact our cash flows. Furthermore, if we experience defaults on securities held in the investment portfolios of our insurance subsidiaries, this will negatively impact statutory capital, which could reduce our insurance subsidiaries' capacity to pay dividends to our holding companies. A reduction in dividends to our holding companies could force us to seek external financing to avoid impairing our ability to pay dividends to our stockholders or meet our debt and other payment obligations.

Our policy benefits are primarily in the form of claim payments, and we have minimal exposure to the policy withdrawal risk associated with deposit products such as individual life policies or annuities. A decrease in demand for our insurance products or an increase in the incidence of new claims or the duration of existing claims could negatively impact our cash flows from operations. However, our historical pattern of benefits paid to revenues is generally consistent, even during cycles of economic downturns, which serves to minimize liquidity risk.

The liquidity requirements of the holding company Unum Group include common stock dividends, interest and debt service, acquisitions, and ongoing investments in our businesses. Unum Group's liquidity requirements are met by assets held by Unum Group and our intermediate holding companies, dividends from primarily our insurance subsidiaries, and issuance of common stock, debt, or other capital securities and borrowings from existing credit facilities, as needed. As of ~~September~~June 30, ~~2018,~~2019, Unum Group and our intermediate holding companies held fixed maturity securities, short-term investments, and cash of ~~$973~~$977 million. Fixed maturity securities consisted primarily of ~~corporate bonds~~mortgage/asset-backed securities with an average maturity date of ~~6.5~~4.5 years. Short-term investments consisted primarily of commercial paper. No significant restrictions exist on our ability to use or access funds in any of our U.S. or ~~U.K~~foreign intermediate holding companies. ~~As a result of the TCJA, future~~Future amounts repatriated from our foreign subsidiaries ~~in the U.K.~~ are eligible for a 100 percent exemption from U.S. income tax but may be subject to tax on foreign currency gain or loss.

As part of our capital deployment strategy, we ~~have in recent years repurchased~~repurchase shares of Unum Group's common stock, as authorized by our board of directors. Our current share repurchase program was approved by our board of directors in May ~~2018~~2019 and authorizes the repurchase of up to $750 million of common stock through November ~~2019,~~2020, with the pace of repurchase activity to depend upon various factors such as the level of available cash, alternative uses for cash, and our stock price. This new authorization replaced the previous authorization of $750 million that was scheduled to expire in November 2019. During the first ~~nine~~six months of ~~2018,~~2019, we repurchased ~~4.4~~5.6 million shares at a cost of approximately $200 million. The dollar value of shares remaining under the current repurchase program was approximately ~~$650~~$716 million at ~~September~~June 30, 2018. We did not repurchase shares during the third quarter of 2018 due to our ongoing long-term care reserve review, however, we expect to resume share repurchases beginning in the fourth quarter of 2018.2019. See Note 10 of the "Notes to Consolidated Financial Statements" contained herein in Item ~~1 and "Executive Summary" contained herein in this Item 2 for further information.~~1.

Cash Available from Subsidiaries

Unum Group and certain of its intermediate holding company subsidiaries depend on payments from subsidiaries to pay dividends to stockholders, to pay debt obligations, and/or to pay expenses. These payments by our insurance and non-insurance subsidiaries may take the form of dividends, operating and investment management fees, and/or interest payments on loans from the parent to a subsidiary.

Restrictions under applicable state insurance laws limit the amount of dividends that can be paid to a parent company from its insurance subsidiaries in any 12-month period without prior approval by regulatory authorities. For life insurance companies domiciled in the U.S., that limitation generally equals, depending on the state of domicile, either ten percent of an insurer's statutory surplus with respect to policyholders as of the preceding year end or the statutory net gain from operations, excluding realized investment gains and losses, of the preceding year. The payment of dividends to a parent company from a life insurance subsidiary is generally further limited to the amount of unassigned funds.

Certain of our domestic insurance subsidiaries cede blocks of business to Northwind Reinsurance Company (Northwind Re) and Fairwind Insurance Company (Fairwind), both of which are affiliated captive reinsurance subsidiaries domiciled in the United States with Unum Group as the ultimate parent. The ability of Northwind Re and Fairwind to pay dividends to their respective parent companies will depend on their satisfaction of applicable regulatory requirements and on the performance of the business reinsured by Northwind Re and Fairwind.

The ability of Unum Group and certain of its intermediate holding company subsidiaries to continue to receive dividends from their insurance subsidiaries also depends on additional factors such as RBC ratios and capital adequacy and/or solvency requirements, funding growth objectives at an affiliate level, and maintaining appropriate capital adequacy ratios to support desired ratings. The impacts of the TCJA, in particular the reduction of our admitted deferred tax assets due to the decrease in the U.S. corporate tax rate, have generally reduced our RBC ratios; however, at September 30, 2018, the capital adequacy individual RBC ratios for ~~each of~~ our U.S. insurance subsidiaries ~~including~~at June 30, 2019 are in line with our ~~captive reinsurers, is~~expectations and are significantly above the ~~range~~level that would require state regulatory action. While we intend to maintain aggregate capital levels in our statutory entities consistent with current levels, our year-end 2018 RBC ratios will decline primarily as a result of the higher RBC factors adopted by the NAIC in response to the lower U.S. statutory income tax rate.

Unum Group and/or certain of its intermediate holding company subsidiaries may also receive dividends from our U.K. subsidiaries, the payment of which may be subject to applicable insurance company regulations and capital guidance in the U.K. Unum Limited is subject to the requirements of Solvency II, a European Union (EU) directive, which prescribes capital requirements and risk management standards for the European insurance industry. Our European holding company is also subject to the Solvency II requirements relevant to insurance holding companies, while its subsidiaries (the Unum European Economic Area (EEA) Group), which includes Unum Limited, are subject to group supervision under Solvency II. The Unum EEA Group received approval from the U.K. Prudential Regulation Authority to use its own internal model for calculating regulatory capital and also received approval for certain associated regulatory permissions including transitional relief as the Solvency II capital regime continues to be implemented. There are currently no indications that capital requirements for the Unum EEA Group will change as a result of the U.K. ~~formally commencing the process to leave~~'s exit from the EU, but economic conditions may in the near term cause volatility in our solvency ratios.

The payment of dividends to the parent company from our subsidiaries also requires the approval of the individual subsidiary's board of directors.

During ~~2018,~~the remainder of 2019, we intend to maintain a level of capital in our ~~U.S. and U.K.~~ insurance subsidiaries above the applicable capital adequacy requirements and minimum solvency margins.

Insurance regulatory restrictions do not limit the amount of dividends available for distribution from non-insurance subsidiaries except where the non-insurance subsidiaries are held directly or indirectly by an insurance subsidiary and only indirectly by Unum Group.

Funding for Employee Benefit Plans

During the first ~~nine~~six months of ~~2018,~~2019, we made contributions of ~~$53.1~~$35.2 million and ~~£2.3~~£1.7 million to our U.S. and U.K. defined contribution plans, respectively, and expect to make additional contributions of approximately ~~$17~~$40 million and £1£1.5 million during the remainder of ~~2018. We made a de minimis amount of contributions to our U.S. qualified defined benefit pension plan and no contribution to our U.K. defined benefit pension plan during the first nine months of 2018.~~2019. We do not expect to

make ~~additional~~ contributions to our U.S. or U.K. qualified defined benefit pension plans during ~~the remainder of 2018.~~2019. We have met all minimum pension funding requirements set forth by the Employee Retirement Income Security Act. We have estimated our future funding requirements under the Pension Protection Act of 2006 and under applicable U.K. law and do not believe that any future funding requirements will cause a material adverse effect on our liquidity.

Debt

Our long-term debt balance at ~~September~~June 30, ~~2018~~2019 was ~~$2,983.5~~$3,341.2 million, net of deferred debt issuance costs of ~~$31.5~~$33.0 million, and consisted primarily of secured and unsecured senior notes and junior subordinated debt securities.

~~In July 2018, our $200.0 million 7.00% senior unsecured notes matured.~~

In May 2018, we issued $300.0 million of 6.25% junior subordinated notes due 2058. The notes are redeemable at or above par on or after June 15, 2023 and rank equally in the right of payment with our other junior subordinated debt securities.

Northwind Holdings made principal payments on its floating rate, senior secured non-recourse notes of ~~$45.0~~$30.0 million in the first ~~nine~~six months of ~~2018.~~2019.

In June 2019, we issued $400.0 million of 4.00% senior notes due 2029. The notes are callable at or above par and rank equally in the right of payment with all of our other unsecured and unsubordinated debt. The net proceeds of the offering are expected to be used for general corporate purposes, including the repayment at maturity of our outstanding 5.625% senior notes due September 2020.

In April 2019, we amended the terms of our existing five-year unsecured revolving credit facility, increasing it from $400.0 million to $500.0 million. The credit facility, which was previously set to expire in 2021, was extended through April 2024. Under the terms of the amended agreement, we may request that the credit facility be increased up to $700.0 million, up from the previous amount of $600.0 million. We also may request, on up to two occasions, that the lenders' commitment termination dates be extended by one year. The credit facility provides for the issuance of letters of credit subject to certain terms and limitations. At ~~September~~June 30, ~~2018,~~2019, letters of credit totaling ~~$2.1~~$2.0 million had been issued from the credit facility, but there were no borrowed amounts outstanding.

Also in April 2019, we separately entered into a three-year $100.0 million unsecured revolving credit facility with a different syndicate of lenders, which is set to expire in April 2022. Under the terms of the agreement, we may request that the credit facility be increased up to $140.0 million. We also may request that the lenders' commitment termination dates be extended by one year. The credit facility provides for the issuance of letters of credit subject to certain terms and limitations. At June 30, 2019, there have been no letters of credit issued from the credit facility and there were no borrowed amounts outstanding.

There are no significant financial covenants associated with any of our outstanding debt obligations. We continually monitor our compliance with our debt covenants and remain in compliance. Our credit facilities include financial covenants that place limitations on our leverage ratio and consolidated net worth. The credit facilities also include covenants that limit subsidiary indebtedness. We have not observed any current trends that would cause a breach of any debt covenants. See Note 1213 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Debt" and Note 8 of the "Notes to Consolidated Financial Statements" contained in Part II, Items 7 and 8, respectively, of our annual report on Form 10-K for the year ended December 31, ~~2017~~2018 for further discussion.

Commitments

At ~~September~~June 30, ~~2018,~~2019, we had unfunded unconditional commitments of ~~$3.7~~$2.3 million to fund tax credit partnership investments, and ~~$16.9~~$14.7 million to fund the purchase of transferable state tax credits. These commitments are recognized as liabilities in our consolidated balance sheets, with a corresponding recognition of other long-term investments and other assets, respectively. In addition, we had commitments of ~~$115.1~~$103.5 million to fund certain investments in private placement fixed maturity securities, ~~$351.6~~$369.2 million to fund certain private equity partnerships, and ~~$47.3~~$87.1 million to fund certain commercial mortgage loans, which may or may not be funded.

With respect to our commitments and off-balance sheet arrangements, see the discussion under "Commitments" in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018. During the first ~~nine~~six months of ~~2018,~~2019, there were no substantive changes in our commitments, contractual obligations, or other off-balance sheet arrangements other than the changes noted herein.

Transfers of Financial Assets

Our investment policy permits us to lend fixed maturity securities to unaffiliated financial institutions in short-term securities lending agreements, which increases our investment income with minimal risk. We account for all of our securities lending agreements and repurchase agreements as secured borrowings. We had ~~$2.1~~$5.8 million of securities lending agreements outstanding at ~~September~~June 30, ~~2018~~2019 which were collateralized by cash and reported as payables for collateral on investments in our consolidated balance sheets. The cash received as collateral was reinvested in short-term investments. The average balance during the first ~~nine~~six months of ~~2018~~2019 was ~~$16.2~~$2.0 million, and the maximum amount outstanding at any month end was ~~$29.9~~$5.9 million. In addition, at ~~September~~June 30, ~~2018,~~2019, we had ~~$187.6~~$274.5 million of off-balance sheet securities lending agreements which were collateralized

by securities that we were neither permitted to sell nor control. The average balance of these off-balance sheet transactions during the first ~~nine~~six months of ~~2018~~2019 was ~~$127.6~~$201.7 million, and the maximum amount outstanding at any month end was ~~$209.9~~$274.5 million.

To manage our cash position more efficiently, we may enter into repurchase agreements with unaffiliated financial institutions. We generally use repurchase agreements as a means to finance the purchase of invested assets or for short-term general business purposes until projected cash flows become available from our operations or existing investments. We had no repurchase agreements outstanding at ~~September~~June 30, ~~2018,~~2019, nor did we utilize any repurchase agreements during the first ~~nine~~six months of ~~2018.~~2019. Our use of repurchase agreements and securities lending agreements can fluctuate during any given period and will depend on our liquidity position, the availability of long-term investments that meet our purchasing criteria, and our general business needs.

Certain of our U.S. insurance subsidiaries are members of regional Federal Home Loan Banks (FHLB). As of ~~September~~June 30, ~~2018,~~2019, we owned ~~$32.1~~$18.5 million of FHLB common stock and had ~~obtained $219.5 million in~~no outstanding advances from the regional ~~FHLBs for the purpose of purchasing fixed maturity securities.~~FHLBs.

See Note 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information.

Consolidated Cash Flows


(in millions of dollars)
	Nine Months Ended September 30						Six Months Ended June 30
	2018			2017			2019			2018
Net Cash Provided by Operating Activities	$	1,083.5		$	876.6		$	942.7		$	696.2
Net Cash Used by Investing Activities	(587.4		)	(388.5		)	(1,007.2		)	(601.6		)
Net Cash Used by Financing Activities	(359.3		)	(518.4		)
Net Cash Provided (Used) by Financing Activities							31.3			(72.5		)
Net Increase (Decrease) in Cash and Bank Deposits	$	136.8		$	(30.3	)	$	(33.2	)	$	22.1

Operating Cash Flows

Operating cash flows are primarily attributable to the receipt of premium and investment income, offset by payments of claims, commissions, expenses, and income taxes. Premium income growth is dependent not only on new sales, but on policy renewals and growth of existing business, renewal price increases, and persistency. Investment income growth is dependent on the growth in the underlying assets supporting our insurance reserves and capital and on the earned yield. The level of commissions and operating expenses is attributable to the level of sales and the first year acquisition expenses associated with new business as well as the maintenance of existing business. The level of paid claims is affected partially by the growth and aging of the block of business and also by the general economy, as previously discussed in the operating results by segment.

The variance in the change in insurance reserves and liabilities to reconcile net income to net cash provided by operating activities as reported in our consolidated statements of cash flows for the first nine months of 2018 compared to the same prior year period was due primarily to the third quarter of 2018 reserve increase for our long-term care line of business.

Investing Cash Flows

Investing cash inflows consist primarily of the proceeds from the sales and maturities of investments. Investing cash outflows consist primarily of payments for purchases of investments. Our investment strategy is to match the cash flows and durations of our assets with the cash flows and durations of our liabilities to meet the funding requirements of our business. When market opportunities arise, we may sell selected securities and reinvest the proceeds to improve the yield and credit quality of our portfolio. We may at times also sell selected securities and reinvest the proceeds to improve the duration matching of our assets and liabilities and/or re-balance our portfolio. As a result, sales before maturity may vary from period to period. The sale and purchase of short-term investments is influenced by proceeds received from issuance of debt, our securities lending program, and by the amount of cash which is at times held in short-term investments to facilitate the availability of cash to fund the purchase of appropriate long-term investments, repay maturing debt, fund acquisitions, and/or to fund our capital deployment program.

See Note 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information.

Financing Cash Flows

Financing cash flows consist primarily of borrowings and repayments of debt, issuance or repurchase of common stock, and dividends paid to stockholders.

In ~~July~~June 2019, we issued $400.0 million of 4.00% senior notes due 2029 and received total proceeds of $395.9 million.

During each of the first six months of 2019 and 2018, we made principal payments of $30.0 million on our ~~$200.0 million 7.00%~~ senior ~~unsecured~~secured non-recourse notes ~~matured.~~issued by Northwind Holdings.

In May 2018, we issued $300.0 million of 6.25% junior subordinated notes due 2058 and received total proceeds of $290.7 million.

~~During each of the first nine months of 2018 and 2017, we made principal payments of $45.0 million on our senior secured non-recourse notes issued by Northwind Holdings.~~

~~During the second quarter of 2017, we purchased and retired the remaining $3.4 million of principal on our senior secured floating rate notes acquired through our purchase of Starmount.~~

Cash used to repurchase shares of Unum Group's common stock during the first ~~nine~~six months of 2019 and 2018 ~~and 2017~~ was ~~$205.8~~$200.2 million and ~~$307.2~~$205.8 million, respectively, with a portion of the cash used in 2018 related to the settlement of amounts due on shares purchased in the fourth ~~quarters of 2017 and 2016, respectively.~~quarter 2017. During the first ~~nine~~six months of ~~2018~~2019 and ~~2017,~~2018, we paid dividends of ~~$160.2~~$110.9 million and ~~$144.1~~$103.3 million, respectively, to holders of Unum Group's common stock.

See Notes 10 and 1213 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Debt" contained in this Item 2 for further information.

Ratings

AM Best, Fitch Ratings (Fitch), Moody's Investors Service (Moody's), and Standard & Poor's Rating Services (S&P) are among the third parties that assign issuer credit ratings to Unum Group and financial strength ratings to our insurance subsidiaries. Issuer credit ratings reflect an agency's opinion of the overall financial capacity of a company to meet its senior debt obligations. Financial strength ratings are specific to each individual insurance subsidiary and reflect each rating agency's view of the overall financial strength (capital levels, earnings, growth, investments, business mix, operating performance, and market position) of the insuring entity and its ability to meet its obligations to policyholders. Both the issuer credit ratings and financial strength ratings incorporate quantitative and qualitative analyses by rating agencies and are routinely reviewed and updated on an ongoing basis.

We compete based in part on the financial strength ratings provided by rating agencies. A downgrade of our financial strength ratings can be expected to adversely affect us and could potentially, among other things, adversely affect our relationships with distributors of our products and services and retention of our sales force, negatively impact persistency and new sales, particularly large case group sales and individual sales, and generally adversely affect our ability to compete. A downgrade in the issuer credit rating assigned to Unum Group can be expected to adversely affect our cost of capital or our ability to raise additional capital.

The table below reflects the outlook as well as the issuer credit ratings for Unum Group and the financial strength ratings for each of our traditional insurance subsidiaries as of the date of this filing.



	AM Best	Fitch	Moody's	S&P
Outlook	Stable	Negative	Stable	Stable

Issuer Credit Ratings	bbb	BBB	Baa2	BBB

Financial Strength Ratings
Provident Life and Accident Insurance Company	A	A	A2	A
Provident Life and Casualty Insurance Company	A	A	NR	NR
Unum Life Insurance Company of America	A	A	A2	A
First Unum Life Insurance Company	A	A	A2	A
Colonial Life & Accident Insurance Company	A	A	A2	A
The Paul Revere Life Insurance Company	A	A	A2	A
Starmount Life Insurance Company	A-	NR	NR	NR
Unum Insurance Company	A-	A	A2	NR
Unum Limited	NR	NR	NR	A-

NR = not rated

We maintain an ongoing dialogue with the four rating agencies that evaluate us in order to inform them of progress we are making regarding our strategic objectives and financial plans as well as other pertinent issues. A significant component of our

communications involves our annual review meeting with each of the four agencies. We hold other meetings throughout the year regarding our business, including, but not limited to, quarterly updates.

On August 3, 2018, Fitch affirmed its A rating of our domestic insurance subsidiaries and affirmed the BBB issuer credit rating for Unum Group. Fitch also revised their outlook to negative from stable, citing the adverse reserve development in our long-term care business. There ~~were~~have been no changes in any of the ~~other~~ rating agencies' ~~outlook statements~~outlooks or ratings during ~~2018~~2019 prior to the date of this filing.

Agency ratings are not directed toward the holders of our securities and are not recommendations to buy, sell, or hold our securities. Each rating is subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be regarded as an independent assessment, not conditional on any other rating. Given the dynamic nature of the ratings process, changes by these or other rating agencies may or may not occur in the near-term. ~~Although the outlook for capital requirements has become more clear, there remains some uncertainty in the industry~~Based on ~~how rating agencies will incorporate recently announced NAIC RBC formula changes in response to tax reform. We continue to work closely~~our ongoing dialogue with the rating agencies ~~on these changes. In~~concerning our insurance risk profile, our financial flexibility, our operating performance, and the quality of our investment portfolio, we do not expect any negative actions from any of the four rating agencies related to either Unum Group's current issuer credit ratings or the financial strength ratings of our insurance subsidiaries. However, in the event that we are unable to meet the rating agency specific guideline values to maintain our current ratings, including but not limited to maintenance of our capital management metrics at the threshold values stated and maintenance of our financial flexibility and operational consistency, we could be placed on a negative credit watch, with a potential for a downgrade to both our issuer credit ratings and our financial strength ratings.

See our annual report on Form 10-K for the year ended December 31, ~~2017~~2018 for further information regarding our debt and financial strength ratings and the risks associated with rating changes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to various market risk exposures including interest rate risk and foreign exchange rate risk. With respect to our exposure to market risk, see the discussion under "Investments" in Item 2 of this Form 10-Q and in Part II, Item 7A of our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018. During the first ~~nine~~six months of ~~2018,~~2019, there was no substantive change to our market risk or the management of this risk.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report. We assessed those controls based on criteria established in the 2013 Internal Control - Integrated Framework from the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, these officers concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2018.~~2019.

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended, during the quarter ended ~~September~~June 30, ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to Part I, Item 1, Note 11 of the "Notes to Consolidated Financial Statements" for information on legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~In May 2018,~~The following table provides information about our ~~board of directors authorized~~share repurchase activity for the ~~repurchase of up to $750 million of Unum Group's common stock through November 24, 2019. No shares were purchased during the third~~second quarter of ~~2018. At September 30, 2018, the approximate dollar value of shares that may yet be purchased under the program was $650.0 million.~~2019:



	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share (1)		(c) Total Number of Shares Purchased as Part of Publicly Announced Programs (2)	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (2)
April 1 - April 30, 2019	658,715	$	36.83	658,715	$	375,707,161
May 1 - May 31, 2019	1,860,681	34.56		1,860,681	727,613,061
June 1 - June 30, 2019	345,269	33.10		345,269	716,184,123
Total	2,864,665			2,864,665



(1)							The average price paid per share excludes the cost of commissions.


(2)	In May 2019, our board of directors authorized the repurchase of up to $750 million of Unum Group's common stock through November 23, 2020. This new authorization replaced the May 2018 authorization of $750 million that was scheduled to expire on November 24, 2019.

ITEM 6. EXHIBITS

Index to Exhibits




Exhibit ~~10.1~~ 4.1		~~Annual Incentive Plan~~Form of 4.000% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 of Unum ~~Group, as amended effective January 1, 2018.~~Group's Form 8-K filed on June 13, 2019).

Exhibit ~~31.1~~ 10.1		Amended and Restated Credit Agreement, dated as of April 29, 2019, among Unum Group, as Borrower, the Lenders named therein, and Wells Fargo Bank, National Association, as Administrative Agent, L/C Agent, Fronting Bank and Swingline Lender.

Exhibit 31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101		The ~~following financial statements from Unum Group's Quarterly Report on Form 10-Q for~~instance document does not appear in the quarter ended September 30, 2018, filed on October 25, 2018, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, (vi)interactive data file because its XBRL tags are embedded within the ~~Notes to Consolidated Financial Statements.~~inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	Unum Group
	(Registrant)
Date: ~~October 25, 2018~~July 31, 2019	By:	/s/ ~~John F. McGarry~~Steven A. Zabel
		~~John F. McGarry~~Steven A. Zabel
		Executive Vice President and Chief Financial Officer

Date: ~~October 25, 2018~~July 31, 2019	By:	/s/ Daniel J. Waxenberg
		Daniel J. Waxenberg
		Senior Vice President, Chief Accounting Officer

~~110~~101



Delaware			62-1598430
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

~~1 FOUNTAIN SQUARE~~
~~CHATTANOOGA, TENNESSEE~~1 Fountain Square	Chattanooga,	Tennessee	37402
(Address of principal executive offices)			(Zip ~~Code)~~code)



Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.10 par value	UNM	New York Stock Exchange
6.250% Junior Subordinated Notes due 2058	UNMA	New York Stock Exchange



Large ~~accelerated filer~~Accelerated Filer	x☒	Accelerated ~~filer~~Filer	¨☐

Non-accelerated ~~filer~~Filer	¨ ☐	Smaller ~~reporting company~~Reporting Company	¨☐

		Emerging ~~growth company~~Growth Company	¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨☐



	December 31, 2018
	Fair Value			Valuation Method	Unobservable Input		Range/Weighted Average
	(in millions of dollars)
Fixed Maturity Securities
All Other Corporate Bonds - Private	$	148.5		Market Approach	Lack of Marketability Volatility of Credit Market Convention	(a) (b) (c)	0.25% - 0.25% / 0.25% 0.25% - 10.99% / 1.00% Priced at Par
Equity Securities - Private	4.6			Market Approach	Market Convention	(c)	Priced at Cost or Owner's Equity
Embedded Derivative in Modified Coinsurance Arrangement	(31.1		)	Discounted Cash Flows	Projected Liability Cash Flows	(d)	Actuarial Assumptions



	December 31, 2017
	Fair Value			Valuation Method	Unobservable Input		Range/Weighted Average
	(in millions of dollars)
Fixed Maturity Securities
All Other Corporate Bonds - Private	$	244.4		Market Approach	Comparability Adjustment Lack of Marketability Volatility of Credit Market Convention	(a) (b) (c) (d)	0.20% - 0.20% / 0.20% 0.25% - 0.25% / 0.25% 0.12% - 6.25% / 0.50% Priced at Par
Equity Securities - Private	1.1			Market Approach	Market Convention	(d)	Priced at Cost or Owner's Equity
Embedded Derivative in Modified Coinsurance Arrangement	(15.9		)	Discounted Cash Flows	Projected Liability Cash Flows	(e)	Actuarial Assumptions



x☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	~~For the quarterly period ended September 30, 2018~~



¨☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from ___________ to ___________



	For the Nine Months Ended September 30, 2017
	Historical Accounting Method			As Adjusted		Effect of Change
	(in millions of dollars)
Adjustments due to ASC 230
Consolidated Statements of Cash Flow
Cash Flows from Operating Activities
Other, Net	$	(2.4	)	$	8.2	$	10.6
Cash Flows from Investing Activities
Proceeds from Sales and Maturities of Other Investments	172.3			161.7		(10.6		)



	Balance at December 31, 2017		Balance at January 1, 2018		Effect of Change
	(in millions of dollars)
Adjustments due to ASC 825
Consolidated Balance Sheets
Assets
Investments
Other Long-term Investments	$	646.8	$	643.0	$	(3.8	)

Liabilities
Deferred Income Tax	199.0		198.2		(0.8		)

Stockholders' Equity
Accumulated Other Comprehensive Income (Loss)	127.5		110.0		(17.5		)
Retained Earnings	9,542.2		9,556.7		14.5



	September 30, 2018
	Level 1		Level 2		Level 3		NAV		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	679.6	$	1,099.9	$	—	$	—	$	1,779.5
States, Municipalities, and Political Subdivisions	—		2,256.1		63.9		—		2,320.0
Foreign Governments	—		766.8		31.6		—		798.4
Public Utilities	333.7		6,933.8		122.4		—		7,389.9
Mortgage/Asset-Backed Securities	—		1,626.5		0.5		—		1,627.0
All Other Corporate Bonds	7,798.7		20,425.6		891.8		—		29,116.1
Redeemable Preferred Stocks	—		18.9		21.5		—		40.4
Total Fixed Maturity Securities	8,812.0		33,127.6		1,131.7		—		43,071.3

Other Long-term Investments
Derivatives
Foreign Exchange Contracts	—		20.4		—		—		20.4
Credit Default Swaps	—		0.5		—		—		0.5
Equity Securities	14.9		12.6		1.1		—		28.6
Private Equity Partnerships	—		—		—		466.7		466.7
Total Other Long-term Investments	14.9		33.5		1.1		466.7		516.2
Total Financial Instrument Assets Carried at Fair Value	$	8,826.9	$	33,161.1	$	1,132.8	$	466.7	$	43,587.5

Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps and Forwards	$	—	$	7.3	$	—	$	—	$	7.3
Foreign Exchange Contracts	—		39.2		—		—		39.2
Embedded Derivative in Modified Coinsurance Arrangement	—		—		13.8		—		13.8
Total Derivatives	—		46.5		13.8		—		60.3
Total Financial Instrument Liabilities Carried at Fair Value	$	—	$	46.5	$	13.8	$	—	$	60.3


	Three Months Ended September 30, 2017																					Three Months Ended June 30, 2018
				Total Realized and Unrealized Investment Gains (Losses) Included in										Level 3 Transfers											Total Realized and Unrealized Investment Gains (Losses) Included in											Level 3 Transfers
	Fair Value Beginning of Period			Earnings		Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period			Fair Value Beginning of Period			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)																					(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	36.8		$	—	$	(1.1	)	$	—	$	—		$	52.9	$	—		$	88.6		$	35.7		$	—		$	0.8		$	—	$	—		$	—	$	—		$	36.5
Foreign Governments																						32.3			—			(0.8		)	—		—			—		—			31.5
Public Utilities	192.5			—		—			—		—			133.8		(118.2		)	208.1			284.2			—			(0.8		)	—		—			49.4		(163.6		)	169.2
Mortgage/Asset-Backed Securities																						0.5			—			—			—		—			—		—			0.5
All Other Corporate Bonds	853.2			—		14.3			38.9		(33.2		)	390.0		(169.9		)	1,093.3			987.2			1.9			(16.1		)	9.9		(37.5		)	409.3		(538.4		)	816.3
Redeemable Preferred Stocks	23.1			—		(0.1		)	—		—			—		—			23.0			22.2			—			(0.6		)	—		—			—		—			21.6
Total Fixed Maturity Securities	1,105.6			—		13.1			38.9		(33.2		)	576.7		(288.1		)	1,413.0			1,362.1			1.9			(17.5		)	9.9		(37.5		)	458.7		(702.0		)	1,075.6

Equity Securities	1.2			—		0.1			—		—			—		—			1.3			1.1			—			—			—		—			—		—			1.1
Embedded Derivative in Modified Coinsurance Arrangement	(31.9		)	6.7		—			—		—			—		—			(25.2		)	(17.6		)	(2.3		)	—			—		—			—		—			(19.9		)



	Six Months Ended June 30, 2019
				Total Realized and Unrealized Investment Gains (Losses) Included in											Level 3 Transfers
	Fair Value Beginning of Year			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)
Fixed Maturity Securities
Foreign Governments	$	31.4		$	—		$	0.5		$	—	$	—		$	—	$	—		$	31.9
Public Utilities	84.7			—			7.2			—		(0.2		)	151.8		(54.4		)	189.1
All Other Corporate Bonds	1,495.8			—			61.8			14.0		(60.5		)	405.5		(902.5		)	1,014.1
Redeemable Preferred Stocks	21.1			—			—			—		—			—		(21.1		)	—
Total Fixed Maturity Securities	1,633.0			—			69.5			14.0		(60.7		)	557.3		(978.0		)	1,235.1

Equity Securities	4.6			—			—			—		—			—		—			4.6
Embedded Derivative in Modified Coinsurance Arrangement	(31.1		)	4.7			—			—		—			—		—			(26.4		)

	Six Months Ended June 30, 2018
				Total Realized and Unrealized Investment Gains (Losses) Included in											Level 3 Transfers
	Fair Value Beginning of Year			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	—		$	—		$	—		$	—	$	(0.1	)	$	36.6	$	—		$	36.5
Foreign Governments	—			—			(1.3		)	—		—			32.8		—			31.5
Public Utilities	207.7			—			(3.6		)	—		—			81.7		(116.6		)	169.2
Mortgage/Asset-Backed Securities	—			—			—			—		—			0.5		—			0.5
All Other Corporate Bonds	1,150.1			1.8			(35.4		)	26.0		(71.3		)	415.2		(670.1		)	816.3
Redeemable Preferred Stocks	22.8			—			(1.2		)	—		—			—		—			21.6
Total Fixed Maturity Securities	1,380.6			1.8			(41.5		)	26.0		(71.4		)	566.8		(786.7		)	1,075.6

Equity Securities	1.1			—			—			—		—			—		—			1.1
Embedded Derivative in Modified Coinsurance Arrangement	(15.9		)	(4.0		)	—			—		—			—		—			(19.9		)



	Nine Months Ended September 30, 2018
				Total Realized and Unrealized Investment Gains (Losses) Included in										Level 3 Transfers
	Fair Value Beginning of Year			Earnings		Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	—		$	—	$	(1.6	)	$	—	$	(0.4	)	$	65.9	$	—		$	63.9
Foreign Governments	—			—		(1.2		)	—		—			32.8		—			31.6
Public Utilities	207.7			—		(6.7		)	—		—			120.7		(199.3		)	122.4
Mortgage/Asset-Backed Securities	—			—		—			—		—			0.5		—			0.5
All Other Corporate Bonds	1,150.1			5.8		(49.5		)	47.0		(117.7		)	471.0		(614.9		)	891.8
Redeemable Preferred Stocks	22.8			—		(1.3		)	—		—			—		—			21.5
Total Fixed Maturity Securities	1,380.6			5.8		(60.3		)	47.0		(118.1		)	690.9		(814.2		)	1,131.7

Equity Securities	1.1			—		—			—		—			—		—			1.1
Embedded Derivative in Modified Coinsurance Arrangement	(15.9		)	2.1		—			—		—			—		—			(13.8		)



	Nine Months Ended September 30, 2017
				Total Realized and Unrealized Investment Gains (Losses) Included in											Level 3 Transfers
	Fair Value Beginning of Year			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Into		Out of			Fair Value End of Period
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	89.5		$	—		$	(0.9	)	$	—	$	—		$	—	$	—		$	88.6
Public Utilities	265.3			—			0.2			8.0		(4.8		)	78.0		(138.6		)	208.1
All Other Corporate Bonds	1,459.7			(0.6		)	25.1			88.9		(131.8		)	438.0		(786.0		)	1,093.3
Redeemable Preferred Stocks	23.2			—			(0.2		)	—		—			—		—			23.0
Total Fixed Maturity Securities	1,837.7			(0.6		)	24.2			96.9		(136.6		)	516.0		(924.6		)	1,413.0

Equity Securities	1.2			—			0.1			—		—			—		—			1.3
Embedded Derivative in Modified Coinsurance Arrangement	(46.7		)	21.5			—			—		—			—		—			(25.2		)


(a)	~~Represents basis point adjustments for changes in benchmark spreads associated with various industry sectors~~


~~(b)~~	Represents basis point adjustments to apply a discount due to the illiquidity of an investment


~~(c)~~(b)	Represents basis point adjustments for credit-specific factors


~~(d)~~(c)	Represents a decision to price based on par value, cost, or owner's equity when limited data is available


~~(e)~~(d)	Represents various actuarial assumptions required to derive the liability cash flows including incidence, termination, and lapse rates



	June 30, 2019
	Estimated Fair Value
	Level 1		Level 2		Level 3		Total		Carrying Value
	(in millions of dollars)
Assets
Mortgage Loans	$	—	$	2,343.4	$	—	$	2,343.4	$	2,218.9
Policy Loans	—		—		3,756.3		3,756.3		3,633.1
Other Long-term Investments
Miscellaneous Long-term Investments	—		18.5		74.6		93.1		93.1
Total Financial Instrument Assets Not Carried at Fair Value	$	—	$	2,361.9	$	3,830.9	$	6,192.8	$	5,945.1

Liabilities
Long-term Debt	$	2,171.4	$	1,479.5	$	—	$	3,650.9	$	3,341.2
Other Liabilities
Unfunded Commitments	—		2.3		—		2.3		2.3
Total Financial Instrument Liabilities Not Carried at Fair Value	$	2,171.4	$	1,481.8	$	—	$	3,653.2	$	3,343.5


	December 31, 2018
	Estimated Fair Value
	Level 1		Level 2		Level 3		Total		Carrying Value
	(in millions of dollars)
Assets
Mortgage Loans	$	—	$	2,317.4	$	—	$	2,317.4	$	2,295.0
Policy Loans	—		—		3,831.1		3,831.1		3,729.9
Other Long-term Investments
Miscellaneous Long-term Investments	—		24.1		91.5		115.6		115.6
Total Financial Instrument Assets Not Carried at Fair Value	$	—	$	2,341.5	$	3,922.6	$	6,264.1	$	6,140.5

Liabilities
Long-term Debt	$	1,429.8	$	1,639.4	$	—	$	3,069.2	$	2,971.3
Payables for Collateral on Investments
Federal Home Loan Bank (FHLB) Funding Agreements	—		104.0		—		104.0		104.0
Other Liabilities
Unfunded Commitments	—		2.3		—		2.3		2.3
Total Financial Instrument Liabilities Not Carried at Fair Value	$	1,429.8	$	1,745.7	$	—	$	3,175.5	$	3,077.6


	September 30, 2018								June 30, 2019
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	(in millions of dollars)								(in millions of dollars)
United States Government and Government Agencies and Authorities	$	1,691.7	$	113.4	$	25.6	$	1,779.5	$	1,727.0	$	159.2	$	—	$	1,886.2
States, Municipalities, and Political Subdivisions	2,049.2		280.5		9.7		2,320.0		2,229.8		478.5		0.3		2,708.0
Foreign Governments	644.1		156.0		1.7		798.4		806.8		199.5		1.6		1,004.7
Public Utilities	6,592.2		851.1		53.4		7,389.9		6,414.4		1,217.5		18.2		7,613.7
Mortgage/Asset-Backed Securities	1,591.0		57.1		21.1		1,627.0		1,461.8		105.1		0.5		1,566.4
All Other Corporate Bonds	27,306.0		2,195.0		384.9		29,116.1		28,126.0		3,623.0		127.8		31,621.2
Redeemable Preferred Stocks	39.0		1.6		0.2		40.4		39.0		1.0		—		40.0
Total Fixed Maturity Securities	$	39,913.2	$	3,654.7	$	496.6	$	43,071.3	$	40,804.8	$	5,783.8	$	148.4	$	46,440.2


	September 30, 2018								June 30, 2019
	Less Than 12 Months				12 Months or Greater				Less Than 12 Months				12 Months or Greater
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
	(in millions of dollars)								(in millions of dollars)
United States Government and Government Agencies and Authorities	$	390.6	$	10.4	$	181.3	$	15.2	$	—	$	—	$	2.1	$	—
States, Municipalities, and Political Subdivisions	359.3		7.5		34.1		2.2		6.0		0.3		—		—
Foreign Governments	34.4		0.7		12.3		1.0		10.6		0.4		11.7		1.2
Public Utilities	633.4		33.6		228.4		19.8		92.0		2.1		105.3		16.1
Mortgage/Asset-Backed Securities	515.6		9.1		212.7		12.0		26.4		0.1		44.2		0.4
All Other Corporate Bonds	7,839.8		282.6		1,164.0		102.3		438.0		20.6		1,652.1		107.2
Redeemable Preferred Stocks	10.8		0.2		—		—
Total Fixed Maturity Securities	$	9,783.9	$	344.1	$	1,832.8	$	152.5	$	573.0	$	23.5	$	1,815.4	$	124.9


	September 30, 2018										June 30, 2019
	Total Amortized Cost		Unrealized Gain Position				Unrealized Loss Position				Total Amortized Cost		Unrealized Gain Position				Unrealized Loss Position
	Total Amortized Cost		Gross Gain		Fair Value		Gross Loss		Fair Value		Total Amortized Cost		Gross Gain		Fair Value		Gross Loss		Fair Value
	(in millions of dollars)										(in millions of dollars)
1 year or less	$	992.6	$	13.5	$	949.8	$	5.4	$	50.9	$	1,082.2	$	17.2	$	1,065.7	$	3.3	$	30.4
Over 1 year through 5 years	6,062.7		298.6		5,345.8		41.6		973.9		6,228.2		433.8		6,232.6		52.1		377.3
Over 5 years through 10 years	12,558.1		826.6		7,993.7		185.4		5,205.6		13,336.4		1,477.5		13,952.1		28.8		833.0
Over 10 years	18,708.8		2,458.9		16,266.6		243.1		4,658.0		18,696.2		3,750.2		21,305.6		63.7		1,077.1
	38,322.2		3,597.6		30,555.9		475.5		10,888.4		39,343.0		5,678.7		42,556.0		147.9		2,317.8
Mortgage/Asset-Backed Securities	1,591.0		57.1		898.7		21.1		728.3		1,461.8		105.1		1,495.8		0.5		70.6
Total Fixed Maturity Securities	$	39,913.2	$	3,654.7	$	31,454.6	$	496.6	$	11,616.7	$	40,804.8	$	5,783.8	$	44,051.8	$	148.4	$	2,388.4



					Gross Unrealized Loss
	Fair Value		Gross Unrealized Gain		Amount		Percent of Total Gross Unrealized Loss
	(in millions of dollars)
Investment-Grade	$	43,232.8	$	5,664.6	$	58.5	39.4	%
Below-Investment-Grade	3,207.4		119.2		89.9		60.6
Total Fixed Maturity Securities	$	46,440.2	$	5,783.8	$	148.4	100.0	%


��	Relevant industry conditions and trends relative to their historical cycles


Region
New England	$	50.3	2.3	%	$	56.1	2.5	%	$	41.6	1.9	%	$	45.9	2.0	%
Mid-Atlantic	161.8		7.3		155.5		7.0		158.2		7.1		160.6		7.0
East North Central	343.9		15.5		282.0		12.8		309.7		14.0		354.4		15.4
West North Central	205.0		9.2		210.1		9.5		192.6		8.7		190.3		8.3
South Atlantic	478.7		21.5		494.4		22.3		470.5		21.2		485.2		21.1
East South Central	89.4		4.0		88.8		4.0		99.7		4.5		105.5		4.6
West South Central	213.3		9.6		247.4		11.2		219.4		9.9		240.6		10.5
Mountain	243.0		10.9		251.2		11.4		264.6		11.9		242.7		10.6
Pacific	436.6		19.7		427.7		19.3		462.6		20.8		469.8		20.5
Total	$	2,222.0	100.0	%	$	2,213.2	100.0	%	$	2,218.9	100.0	%	$	2,295.0	100.0	%



Loan-to-Value Ratio
<= 65%	$	1,122.8	$	1,204.8
> 65% <= 75%	1,056.7		1,049.1
> 75% <= 85%	—		11.8
> 85%	39.4		29.3
Total	$	2,218.9	$	2,295.0



Loan-to-Value Ratio
<= 65%	$	1,104.4	$	1,101.7
> 65% <= 75%	1,072.2		1,041.6
> 75% <= 85%	24.8		49.3
> 85%	20.6		20.6
Total	$	2,222.0	$	2,213.2



	June 30, 2019		December 31, 2018
	Overnight and Continuous
	(in millions of dollars)
United States Government and Government Agencies and Authorities	$	0.8	$	—
Public Utilities	0.4		—
All Other Corporate Bonds	4.6		0.1
Total Borrowings	5.8		0.1
Gross Amount of Recognized Liability for Securities Lending Transactions	5.8		0.1
Amounts Related to Agreements Not Included in Offsetting Disclosure Contained Herein	$	—	$	—


	September 30, 2018														June 30, 2019
	Gross Amount						Gross Amount Not								Gross Amount						Gross Amount Not
	of Recognized		Gross Amount		Net Amount		Offset in Balance Sheet								of Recognized		Gross Amount		Net Amount		Offset in Balance Sheet
	Financial		Offset in		Presented in		Financial			Cash			Net		Financial		Offset in		Presented in		Financial			Cash			Net
	Instruments		Balance Sheet		Balance Sheet		Instruments			Collateral			Amount		Instruments		Balance Sheet		Balance Sheet		Instruments			Collateral			Amount
	(in millions of dollars)														(in millions of dollars)
Financial Assets:
Derivatives	$	20.9	$	—	$	20.9	$	(4.4	)	$	(16.5	)	$	—	$	27.4	$	—	$	27.4	$	(5.1	)	$	(22.3	)	$	—
Securities Lending	181.9		—		181.9		(179.8		)	(2.1		)	—		266.7		—		266.7		(260.9		)	(5.8		)	—
Total	$	202.8	$	—	$	202.8	$	(184.2	)	$	(18.6	)	$	—	$	294.1	$	—	$	294.1	$	(266.0	)	$	(28.1	)	$	—

Financial Liabilities:
Derivatives	$	46.5	$	—	$	46.5	$	(41.9	)	$	—		$	4.6	$	36.2	$	—	$	36.2	$	(32.0	)	$	—		$	4.2
Securities Lending	2.1		—		2.1		(2.1		)	—			—		5.8		—		5.8		(5.8		)	—			—
Total	$	48.6	$	—	$	48.6	$	(44.0	)	$	—		$	4.6	$	42.0	$	—	$	42.0	$	(37.8	)	$	—		$	4.2


•	Forward benchmark interest rate locks are used to minimize interest rate risk associated with the anticipated purchase or disposal of fixed maturity securities. A forward benchmark interest rate lock is a derivative contract without an initial investment where we and the counterparty agree to purchase or sell a specific benchmark interest rate bond at a future date at a pre-determined price.


•	Interest rate swap was used to effectively convert certain of our floating rate, long-term debt into fixed rate long-term debt. Under this swap agreement, we received a variable rate of interest and paid a fixed rate of interest.


•	Foreign currency forward contractsare used to minimize foreign currency risk. A foreign currency forward is a derivative without an initial investment where we and the counterparty agree to exchange a specific amount of currencies, at a specific exchange rate, on a specific date. We use these forward contracts to hedge the currency risk arising from foreign-currency denominated securities.



	Swaps
	Receive Variable/Pay Fixed		Receive Fixed/Pay Fixed		Receive Fixed/Pay Variable		Credit Default			Forwards			Total
	(in millions of dollars)
Balance at March 31, 2018	$	48.0	$	556.4	$	250.0	$	—		$	26.8		$	881.2
Additions	—		6.5		—		—			20.6			27.1
Terminations	48.0		25.5		—		—			26.8			100.3
Balance at June 30, 2018	$	—	$	537.4	$	250.0	$	—		$	20.6		$	808.0

Balance at December 31, 2017	$	48.0	$	536.5	$	250.0	$	70.0		$	—		$	904.5
Additions	—		26.4		—		—			47.4			73.8
Terminations	48.0		25.5		—		70.0			26.8			170.3
Balance at June 30, 2018	$	—	$	537.4	$	250.0	$	—		$	20.6		$	808.0

Balance at March 31, 2019	$	—	$	533.9	$	250.0	$	11.2		$	13.0		$	808.1
Additions	—		57.0		—		—			10.5			67.5
Terminations	—		32.1		—		—			23.1			55.2
Foreign Currency	—		—		—		(0.3		)	(0.4		)	(0.7		)
Balance at June 30, 2019	$	—	$	558.8	$	250.0	$	10.9		$	—		$	819.7

Balance at December 31, 2018	$	—	$	538.2	$	250.0	$	11.0		$	—		$	799.2
Additions	—		99.6		—		—			23.5			123.1
Terminations	—		79.0		—		—			23.1			102.1
Foreign Currency	—		—		—		(0.1		)	(0.4		)	(0.5		)
Balance at June 30, 2019	$	—	$	558.8	$	250.0	$	10.9		$	—		$	819.7



	Carrying Amount of Hedged Assets (Liabilities)						Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)
	June 30, 2019			December 31, 2018			June 30, 2019			December 31, 2018
	(in millions of dollars)
Fixed maturity securities:
Receive fixed functional currency interest, pay fixed foreign currency interest	$	120.7		$	56.2		$	(1.9	)	$	(2.7	)

Long-term Debt	(248.1		)	(244.4		)	1.5			5.1

~~Description~~

~~Date of Adoption~~

~~Effect on Financial Statements~~

~~ASC 825 "Financial Instruments - Overall"~~

This update changed the accounting and disclosure requirements for certain financial instruments. These changes include a requirement to measure equity investments, other than those that result in consolidation or are accounted for under the equity method, at fair value through net income unless the investment qualifies for certain practicability exceptions. In addition, the update clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale fixed maturity securities. Changes also included the modification of certain disclosures around the fair value of financial instruments, including the requirement for separate presentation of financial assets and liabilities by measurement category, as well as the elimination of certain disclosures around methods and significant assumptions used to estimate fair value. The guidance is to be applied using a modified retrospective approach through a cumulative-effect adjustment to accumulated other comprehensive income with a corresponding adjustment to retained earnings as of the beginning of the fiscal year the guidance is adopted.

~~January 1, 2018~~

~~See the summary tables contained herein for the financial statement impacts of this modified retrospective adoption on our financial statement line items at January 1, 2018.~~