Unum(UNM) - 2020 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2020, was $231.1 million, a decrease of 3.7% from $242.0 million in the same period of 2019[17]. - Net income for the nine months ended September 30, 2020, was $657.6 million, down from $804.1 million in the same period of 2019, representing a decrease of 18.2%[21]. - Total revenue for the three months ended September 30, 2020, was $2,996.3 million, a slight increase from $2,960.0 million in 2019, reflecting a growth of 1.2%[17]. - Adjusted operating income for the three months ended September 30, 2020, was $318.5 million, compared to $350.8 million in 2019, representing a decline of approximately 9.2%[175]. - The total comprehensive income for the nine months ended September 30, 2020, was $150.4 million, compared to $89.3 million in the same period of 2019[158]. Assets and Liabilities - Total assets increased to $69,616.0 million as of September 30, 2020, compared to $67,013.4 million as of December 31, 2019, reflecting a growth of 3.9%[14]. - Total liabilities rose to $58,723.8 million, up from $57,048.4 million, indicating an increase of 2.9%[16]. - The company’s long-term debt increased to $3,378.6 million as of September 30, 2020, from $2,926.9 million, marking an increase of 15.4%[16]. - Total stockholders' equity at the end of the period was $10,892.2 million, compared to $9,631.6 million in the previous year, reflecting an increase of 13.1%[20]. Investment Income - Net investment income for the three months ended September 30, 2020, was $613.2 million, compared to $599.4 million in 2019, showing a growth of 2.9%[17]. - Net investment income for the nine months ended September 30, 2020, was $1,767.2 million versus $1,819.0 million[121]. - The company experienced a net realized investment loss of $105.8 million for the nine months ended September 30, 2020, compared to a gain of $32.4 million in 2019[21]. Premium Income - Premium income for the nine months ended September 30, 2020, was $7,058.2 million, slightly up from $7,013.0 million in 2019, representing an increase of 0.6%[17]. - Premium income for the three months ended September 30, 2020, is $2,318.1 million, slightly down from $2,331.2 million in the same period of 2019[168]. - Unum US reported premium income of $1,483.4 million for the three months ended September 30, 2020, down from $1,501.9 million in the same period of 2019[170]. - Colonial Life's premium income for the three months ended September 30, 2020, remains stable at $419.9 million, unchanged from the same period in 2019[170]. Claims and Expenses - Total benefits and expenses for the three months ended September 30, 2020, were $2,696.7 million, compared to $2,660.6 million in 2019, indicating an increase of 1.4%[17]. - The total liability for unpaid claims and claim adjustment expenses is $22,868.3 million as of September 30, 2020, compared to $22,958.0 million in 2019[164]. - Total incurred claims for the current year amount to $5,126.3 million, compared to $5,086.4 million in the prior year, reflecting an increase of approximately 0.8%[162]. Reserves and Allowances - The reserves for future policy and contract benefits increased to $48,844.3 million as of September 30, 2020, from $48,060.8 million in 2019[164]. - The allowance for expected credit losses increased to $14.6 million for the nine months ended September 30, 2020, primarily due to the impact of COVID-19 on commercial real estate values[109]. - The allowance for expected credit losses on premium receivables increased from $23.8 million on January 1, 2020, to $41.1 million by September 30, 2020[29]. Derivative Instruments and Hedging - The total derivative assets designated as hedging instruments amounted to $38.0 million, while the total derivative liabilities were $9.9 million[149]. - The company utilized interest rate swaps to hedge against both rising and falling interest rates, effectively converting fixed rate securities into floating rate securities[128]. - The fair value of derivative liabilities not designated as hedging instruments totaled $77.8 million as of September 30, 2020, compared to $45.2 million as of December 31, 2019, showing an increase of approximately 72%[150]. Organizational Changes and Legal Matters - The company incurred charges of $23.3 million during Q3 2020 related to organizational design updates, primarily for employee severance and lease terminations[198]. - The company is involved in several litigation matters, including three alleged securities class action lawsuits, with outcomes that could materially affect consolidated results[191]. Tax and Regulatory Changes - The U.K. tax rate increased from 17% to 19% retroactively effective April 1, 2020, resulting in an additional tax expense of $9.3 million[201].