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.

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 consists of individual disability, group and individual long-term care, and other insurance products no longer actively marketed. The individual disability line of business in this segment generally consists of policies we sold prior to the mid 1990s and entirely discontinued selling in 2004, other than update features contractually allowable on existing policies. Other insurance products include individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities.

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, non-operating retirement-related gains or 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 and non-operating retirement-related gains or losses. We previously allocated the amortization of prior period actuarial gains or losses, the component of the net periodic benefit costs for our pensions and other postretirement benefit plans which we consider to be non-operating, to our Corporate segment. Effective January 1, 2012, we modified our segment reporting such that the amortization of prior period actuarial gains or losses is no longer included in operating income or operating loss by segment. Prior period segment results for our Corporate segment have been adjusted to conform to current year reporting.

We measure segment performance excluding realized investment gains and losses and non-operating retirement-related gains or losses because we believe that this performance measure is a better indicator of the ongoing businesses and the underlying trends in the businesses. We believe operating income or loss which excludes the specified items listed in our reconciliation is a better performance measure and a 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. Certain components of the net periodic benefit cost for our pensions and other postretirement benefit plans, namely the amortization of prior period actuarial gains or losses, are primarily driven by market performance and are not indicative of the operational results of our businesses. We believe that excluding the amortization of prior period gains or losses from operating income by segment provides investors with additional information for comparison and analysis of our operating results. Although we manage our non-operating retirement-related gains or losses separately from the operational performance of our business, these gains or losses impact the overall profitability of our company and will increase or decrease over time, depending on market conditions and the resulting impact on the actuarial gains or losses in our pensions and other postretirement benefit plans. The exclusion of these items from segment performance does not replace net income or net loss as a measure of our overall profitability.

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
	2012			2011			2010
	(in millions of dollars)
Operating Revenue by Segment	$	10,459.2		$	10,282.9		$	10,168.5
Net Realized Investment Gain (Loss)	56.2			(4.9		)	24.7
Total Revenue	$	10,515.4		$	10,278.0		$	10,193.2

Operating Income by Segment	$	1,239.7		$	370.1		$	1,327.4
Net Realized Investment Gain (Loss)	56.2			(4.9		)	24.7
Non-operating Retirement-related Loss	(46.4		)	(31.9		)	(32.2		)
Income Tax	(355.1		)	(49.1		)	(441.2		)
Net Income	$	894.4		$	284.2		$	878.7

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



	Year Ended December 31
	2012		2011		2010
	(in millions of dollars)
Unum US
Group Disability
Group Long-term Disability	$	1,578.8	$	1,580.2	$	1,639.4
Group Short-term Disability	476.7		455.2		430.9
Group Life and Accidental Death & Dismemberment
Group Life	1,182.1		1,106.7		1,090.3
Accidental Death & Dismemberment	115.3		109.2		106.1
Supplemental and Voluntary
Individual Disability - Recently Issued	477.6		464.7		457.9
Voluntary Benefits	626.0		580.0		530.8
	4,456.5		4,296.0		4,255.4
Unum UK
Group Long-term Disability	409.7		419.6		421.2
Group Life	221.3		203.6		171.6
Supplemental and Voluntary	63.6		64.4		57.8
	694.6		687.6		650.6
Colonial Life
Accident, Sickness, and Disability	724.5		695.3		661.0
Life	209.7		190.7		176.5
Cancer and Critical Illness	260.3		249.3		238.2
	1,194.5		1,135.3		1,075.7
Closed Block
Individual Disability	736.4		787.0		847.0
Long-term Care	631.9		608.1		599.2
All Other	2.2		0.2		3.5
	1,370.5		1,395.3		1,449.7
Total	$	7,716.1	$	7,514.2	$	7,431.4

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, 2012

Premium Income	$	4,456.5	$	694.6	$	1,194.5	$	1,370.5		$	—		$	7,716.1
Net Investment Income	952.3		170.8		138.6		1,230.5			23.0			2,515.2
Other Income	124.6		0.1		0.3		100.1			2.8			227.9
Operating Revenue	$	5,533.4	$	865.5	$	1,333.4	$	2,701.1		$	25.8		$	10,459.2

Operating Income (Loss)	$	847.1	$	131.3	$	274.3	$	95.5		$	(108.5	)	$	1,239.7
Interest and Debt Expense	$	1.1	$	—	$	—	$	10.4		$	133.9		$	145.4
Depreciation and Amortization	$	255.6	$	27.2	$	181.0	$	3.9		$	0.8		$	468.5

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)	$	816.9	$	190.7	$	270.1	$	(829.2	)	$	(78.4	)	$	370.1
Interest and Debt Expense	$	1.0	$	—	$	—	$	10.5		$	131.8		$	143.3
Depreciation and Amortization	$	245.9	$	26.8	$	164.6	$	16.9		$	0.8		$	455.0

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)	$	769.0	$	209.0	$	269.7	$	118.6		$	(38.9	)	$	1,327.4
Interest and Debt Expense	$	1.2	$	—	$	—	$	11.7		$	128.9		$	141.8
Depreciation and Amortization	$	245.6	$	24.8	$	163.0	$	23.6		$	1.1		$	458.1

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, 2012
Beginning of Year	$	971.8		$	40.9		$	664.4		$	—		$	1,677.1
Capitalized	249.2			11.8			206.3			—			467.3
Amortization	(196.5		)	(15.7		)	(166.5		)	—			(378.7		)
Adjustment Related to Unrealized Investment Gains/Losses	(0.2		)	—			(11.8		)	—			(12.0		)
Foreign Currency	—			1.8			—			—			1.8
End of Year	$	1,024.3		$	38.8		$	692.4		$	—		$	1,755.5

Year Ended December 31, 2011
Beginning of Year	$	943.7		$	41.0		$	628.0		$	203.4		$	1,816.1
Capitalized	220.3			15.4			203.1			3.7			442.5
Amortization	(188.1		)	(15.3		)	(151.2		)	(11.1		)	(365.7		)
Impairment of Long-term Care Deferred Acquisition Costs	—			—			—			(196.0		)	(196.0		)
Adjustment Related to Unrealized Investment Gains/Losses	(4.1		)	—			(15.5		)	—			(19.6		)
Foreign Currency	—			(0.2		)	—			—			(0.2		)
End of Year	$	971.8		$	40.9		$	664.4		$	—		$	1,677.1

Year Ended December 31, 2010
Beginning of Year	$	932.4		$	40.8		$	593.5		$	217.6		$	1,784.3
Capitalized	207.8			15.1			196.8			2.8			422.5
Amortization	(192.6		)	(13.6		)	(150.1		)	(17.0		)	(373.3		)
Adjustment Related to Unrealized Investment Gains/Losses	(3.9		)	—			(12.2		)	—			(16.1		)
Foreign Currency	—			(1.3		)	—			—			(1.3		)
End of Year	$	943.7		$	41.0		$	628.0		$	203.4		$	1,816.1

Assets by segment are as follows:



	December 31
	2012		2011
	(in millions of dollars)
Unum US	$	19,391.2	$	18,583.6
Unum UK	3,975.8		3,549.5
Colonial Life	3,434.9		3,167.8
Closed Block	33,069.2		31,439.5
Corporate	2,365.0		2,814.8
Total	$	62,236.1	$	59,555.2

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 December 31, 2012 and 2011, goodwill was $201.7 million and $201.2 million, respectively, 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.