Segment Information

We have three major business segments: Unum US, Unum UK, and Colonial Life. Our other segments are the Closed Block segment and the Corporate Segment. Effective December 31, 2011, we made certain changes to our segment classifications, described as follows. Prior period segment results have been restated to reflect these changes in reporting classifications.

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, comprised of recently issued disability insurance and voluntary benefits products. These products are marketed through our field sales personnel who work in conjunction with independent brokers and consultants.

The Unum UK segment includes insurance for group long-term disability, group life, and supplemental and voluntary lines of business. The supplemental and voluntary lines of business are comprised of individual disability, critical illness, and voluntary benefits products. Unum UK's products are sold primarily in the United Kingdom through field sales personnel and independent brokers and consultants.

The Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products marketed to employees at the workplace through an agency sales force and brokers.

The Closed Block segment, which previously included only our closed block of individual disability products, now also includes our long-term care line of business, previously reported in the Unum US segment, and certain other insurance products which were previously included in our Corporate and Other segment, which is now named Corporate. The individual disability line of business in our Closed Block segment generally consists of those policies in-force before the substantial changes in product offerings, pricing, distribution, and underwriting, which generally occurred during the period 1994 through 1998. A small amount of new business continued to be sold after these changes, but we stopped selling new individual disability policies in this segment at the beginning of 2004 other than update features contractually allowable on existing policies. Long-term care includes both the group and individual long-term care product lines. The other insurance products line of business consists of certain other products no longer actively marketed, including individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities.

We reclassified our long-term care products from the Unum US segment to the Closed Block segment following completion of a 2011 comprehensive and strategic review of our long-term care business. We had previously discontinued selling individual long-term care in 2009, and in February 2012 we announced that we would discontinue selling group long-term care as well. Because both group and individual long-term care are now considered closed blocks of business, we reclassified these products to the Closed Block segment. We also reclassified our other insurance products not actively marketed to the Closed Block segment. The inclusion of all closed blocks of business into one operating segment aligns with our reporting and monitoring of our closed blocks of business within a discrete segment and is consistent with our separation of these blocks of business from the lines of business which actively market new products. Included in 2011 segment results for the Closed Block are a charge related to the impairment of long-term care deferred acquisition costs and reserve charges for our long-term care and individual disability closed blocks of business. See Note 5 for further discussion.

The Corporate segment includes investment income on corporate assets not specifically allocated to a line of business, interest expense on corporate debt other than non-recourse debt, and certain other corporate income and expense not allocated to a line of business.

In the following segment financial data, "operating revenue" excludes net realized investment gains and losses. "Operating income" or "operating loss" excludes net realized investment gains and losses and income tax. These are considered non-GAAP financial measures. These non-GAAP financial measures of "operating revenue" and "operating income" or "operating loss" differ from revenue and income before income tax as presented in our consolidated statements of income prepared in accordance with GAAP due to the exclusion of before-tax realized investment gains and losses. We measure segment performance excluding realized investment gains and losses because we believe that this performance measure is a better indicator of the ongoing businesses and the underlying trends in the businesses. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of realized investment gains and losses, and a long-term focus is necessary to maintain profitability over the life of the business.

Realized investment gains and losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. However, income or loss excluding realized investment gains and losses does not replace net income or net loss as a measure of overall profitability. We may experience realized investment losses, which will affect future earnings levels since our underlying business is long-term in nature and we need to earn the assumed interest rates in our liabilities.

A reconciliation of total operating revenue and operating income by segment to revenue and net income as reported in our consolidated statements of income follows:



	Year Ended December 31
	2011			2010		2009
	(in millions of dollars)
Operating Revenue by Segment	$	10,282.9		$	10,168.5	$	10,079.3
Net Realized Investment Gain (Loss)	(4.9		)	24.7		11.7
Revenue	$	10,278.0		$	10,193.2	$	10,091.0

Operating Income by Segment	$	262.1		$	1,306.6	$	1,280.6
Net Realized Investment Gain (Loss)	(4.9		)	24.7		11.7
Income Tax	21.8			445.2		439.7
Net Income	$	235.4		$	886.1	$	852.6

Premium income by major line of business within each of our segments is presented as follows.



	Year Ended December 31
	2011		2010		2009
	(in millions of dollars)
Unum US
Group Disability
Group Long-term Disability	$	1,580.2	$	1,639.4	$	1,726.9
Group Short-term Disability	455.2		430.9		432.8
Group Life and Accidental Death & Dismemberment
Group Life	1,106.7		1,090.3		1,057.7
Accidental Death & Dismemberment	109.2		106.1		104.9
Supplemental and Voluntary
Individual Disability - Recently Issued	464.7		457.9		463.7
Voluntary Benefits	580.0		530.8		492.4
	4,296.0		4,255.4		4,278.4
Unum UK
Group Long-term Disability	419.6		421.2		482.4
Group Life	203.6		171.6		147.8
Supplemental and Voluntary	64.4		57.8		55.9
	687.6		650.6		686.1
Colonial Life
Accident, Sickness, and Disability	695.3		661.0		625.8
Life	190.7		176.5		165.6
Cancer and Critical Illness	249.3		238.2		223.7
	1,135.3		1,075.7		1,015.1
Closed Block
Individual Disability	787.0		847.0		898.5
Long-term Care	608.1		599.2		594.7
All Other	0.2		3.5		2.7
	1,395.3		1,449.7		1,495.9
Total	$	7,514.2	$	7,431.4	$	7,475.5

Selected operating statement data by segment is presented as follows:



	Unum US		Unum UK		Colonial Life		Closed Block			Corporate			Total
	(in millions of dollars)
Year Ended December 31, 2011

Premium Income	$	4,296.0	$	687.6	$	1,135.3	$	1,395.3		$	—		$	7,514.2
Net Investment Income	951.4		189.9		132.4		1,189.7			56.2			2,519.6
Other Income	121.6		0.3		0.5		106.1			20.6			249.1
Operating Revenue	$	5,369.0	$	877.8	$	1,268.2	$	2,691.1		$	76.8		$	10,282.9

Operating Income (Loss)	$	819.8	$	192.0	$	282.1	$	(921.5	)	$	(110.3	)	$	262.1
Interest and Debt Expense	$	1.0	$	—	$	—	$	10.5		$	131.8		$	143.3
Depreciation and Amortization	$	356.5	$	40.7	$	202.4	$	22.7		$	0.8		$	623.1

Year Ended December 31, 2010

Premium Income	$	4,255.4	$	650.6	$	1,075.7	$	1,449.7		$	—		$	7,431.4
Net Investment Income	941.5		170.5		122.5		1,166.4			94.6			2,495.5
Other Income	122.8		1.2		0.7		113.6			3.3			241.6
Operating Revenue	$	5,319.7	$	822.3	$	1,198.9	$	2,729.7		$	97.9		$	10,168.5

Operating Income (Loss)	$	769.1	$	208.8	$	282.2	$	117.6		$	(71.1	)	$	1,306.6
Interest and Debt Expense	$	1.2	$	—	$	—	$	11.7		$	128.9		$	141.8
Depreciation and Amortization	$	360.9	$	38.2	$	200.1	$	31.6		$	1.1		$	631.9

Year Ended December 31, 2009

Premium Income	$	4,278.4	$	686.1	$	1,015.1	$	1,495.9		$	—		$	7,475.5
Net Investment Income	934.3		124.5		114.3		1,106.8			66.7			2,346.6
Other Income	118.8		2.4		0.5		131.1			4.4			257.2
Operating Revenue	$	5,331.5	$	813.0	$	1,129.9	$	2,733.8		$	71.1		$	10,079.3

Operating Income (Loss)	$	717.6	$	249.6	$	280.9	$	124.4		$	(91.9	)	$	1,280.6
Interest and Debt Expense	$	2.0	$	—	$	—	$	16.6		$	106.8		$	125.4
Depreciation and Amortization	$	344.7	$	42.4	$	192.0	$	29.6		$	1.6		$	610.3

The following table provides the changes in deferred acquisition costs by segment:



							Colonial			Closed
	Unum US			Unum UK			Life			Block			Total
	(in millions of dollars)
Year Ended December 31, 2011
Beginning of Year	$	1,362.2		$	58.2		$	805.0		$	295.7		$	2,521.1
Capitalized	333.8			30.6			252.9			11.0			628.3
Amortization	(298.7		)	(29.2		)	(189.0		)	(16.9		)	(533.8		)
Impairment of Long-term Care Deferred Acquisition Costs	—			—			—			(289.8		)	(289.8		)
Adjustment Related to Unrealized Investment Gains/Losses	(5.0		)	—			(19.7		)	—			(24.7		)
Foreign Currency	—			(0.2		)	—			—			(0.2		)
End of Year	$	1,392.3		$	59.4		$	849.2		$	—		$	2,300.9

Year Ended December 31, 2010
Beginning of Year	$	1,351.5		$	58.9		$	761.2		$	310.9		$	2,482.5
Capitalized	323.2			28.3			246.4			9.8			607.7
Amortization	(307.9		)	(27.0		)	(187.2		)	(25.0		)	(547.1		)
Adjustment Related to Unrealized Investment Gains/Losses	(4.6		)	—			(15.4		)	—			(20.0		)
Foreign Currency	—			(2.0		)	—			—			(2.0		)
End of Year	$	1,362.2		$	58.2		$	805.0		$	295.7		$	2,521.1

Year Ended December 31, 2009
Beginning of Year	$	1,341.4		$	54.7		$	755.9		$	320.4		$	2,472.4
Capitalized	321.6			29.1			229.0			13.9			593.6
Amortization	(293.8		)	(30.5		)	(178.5		)	(23.4		)	(526.2		)
Adjustment Related to Unrealized Investment Gains/Losses	(17.7		)	—			(45.2		)	—			(62.9		)
Foreign Currency	—			5.6			—			—			5.6
End of Year	$	1,351.5		$	58.9		$	761.2		$	310.9		$	2,482.5

Assets by segment are as follows:



	December 31
	2011		2010
	(in millions of dollars)
Unum US	$	19,004.1	$	18,572.1
Unum UK	3,568.1		3,386.3
Colonial Life	3,352.5		3,047.3
Closed Block	31,439.5		29,418.7
Corporate	2,814.8		2,883.3
Total	$	60,179.0	$	57,307.7

Revenue is primarily derived from sources in the United States and the United Kingdom. There are no material revenues or assets attributable to foreign operations other than those reported in our Unum UK segment.

We report goodwill in our Unum US segment and in our Unum UK segment, which are the segments expected to benefit from the originating business combinations. At both December 31, 2011 and 2010, goodwill was $201.2 million, with $190.0 million attributable to Unum US and the remainder attributable to Unum UK.

Stockholders' equity is allocated to the operating segments on the basis of an internal allocation formula that reflects the volume and risk components of each operating segment's business and aligns allocated equity with our target capital levels for regulatory and rating agency purposes. We modify this formula periodically to recognize changes in the views of capital requirements.