Unum 2007 Annual Report Download - page 112

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Notes to Consolidated Financial Statements
110 Unum 2007 Annual Report
A reconciliation of policy and contract benefits and reserves for future policy and contract benefits as reported in the consolidated
balance sheets to the liability for unpaid claims and claim adjustment expenses is as follows:
December 31
(in millions of dollars) 2007 2006 2005
Policy and Contract Benefits $ 1,979.7 $ 2,220.4 $ 2,063.4
Reserves for Future Policy and Contract Benefits 35,828.0 35,689.4 34,041.5
Total 37,807.7 37,909.8 36,104.9
Less:
Life Reserves for Future Policy and Contract Benefits 6,937.2 7,753.1 7,471.3
Accident and Health Active Life Reserves 5,221.2 4,869.2 4,464.6
Unrealized Adjustment to Reserves for Future Policy and Contract Benefits 859.3 963.1 1,121.3
Liability for Unpaid Claims and Claim Adjustment Expenses $ 24,790.0 $ 24,324.4 $ 23,047.7
The unrealized adjustment to reserves for future policy and contract benefits reflects the changes that would be necessary to
policyholder liabilities if the unrealized investment gains and losses related to the available-for-sale securities had been realized. Changes
in these adjustments are reported as a component of other comprehensive income.
Note 8. Income Tax
Total income tax expense (benefit) is allocated as follows:
Year Ended December 31
(in millions of dollars) 2007 2006 2005
Income from Continuing Operations $ 324.8 $ 61.8 $ 189.9
Income from Discontinued Operations 10.9 5.8 6.1
Stockholders’ Equity — Additional Paid-in Capital Stock-Based Compensation (5.8) — (4.5)
Stockholders’ Equity — Accumulated Other Comprehensive Income (Loss)
Net Unrealized Gain on Securities
(100.4) (273.1) (147.9)
Net Gain on Cash Flow Hedges (6.0) (39.8) 19.7
Foreign Currency Translation Adjustment — (0.3) (0.2)
Unrecognized Pension and Postretirement Benefit Costs 16.7 11.3 (6.7)
Adjustment to Adopt SFAS 158 — (40.3) —
Stockholders’ Equity — Retained Earnings
Adjustment to Adopt SOP 05-1 (232.9) — —
Adjustment to Adopt FIN 48 (22.7) — —
Total Income Tax Expense (Benefit) $ (15.4) $ (274.6) $ 56.4