Stockholders' Equity and Earnings Per Common Share

12 Months Ended

Dec. 31, 2022

Stockholders' Equity and Earnings Per Common Share [Abstract]

Earnings Per Share Disclosure

Earnings Per Common Share

Net income per common share is determined as follows:

	Year Ended December 31
	2022		2021		2020
	(in millions of dollars, except share data)
Numerator
Net Income	$	1,314.2	$	824.2	$	793.0
Denominator (000s)
Weighted Average Common Shares - Basic	200,647.2		204,232.9		203,642.0
Dilution for Assumed Exercises of Stock Options and Nonvested Stock Awards	1,462.2		615.0		113.3
Weighted Average Common Shares - Assuming Dilution	202,109.4		204,847.9		203,755.3
Net Income Per Common Share
Basic	$	6.55	$	4.04	$	3.89
Assuming Dilution	$	6.50	$	4.02	$	3.89

We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding for the period. In computing earnings per share assuming dilution, we include potential common shares that are dilutive (those that

reduce earnings per share). We use the treasury stock method to account for the effect of outstanding stock options, nonvested stock success units, nonvested restricted stock units, and nonvested performance share units on the computation of diluted earnings per share. Under this method, the potential common shares from stock options, nonvested stock success units, and nonvested restricted stock units will each have a dilutive effect, as individually measured, when the average market price of Unum Group common stock during the period exceeds the exercise price of the stock options and the grant price of the nonvested stock success units and nonvested restricted stock units. Potential common shares from performance based share units will have a dilutive effect as the attainment of performance conditions is progressively achieved during the vesting period. Potential common shares not included in the computation of diluted earnings per share because the impact would be antidilutive, approximated 0.1 million, 1.1 million, and 1.6 million for the years ended December 31, 2022, 2021, and 2020, respectively. See Note 11 for further discussion of our stock-based compensation plans.

Stockholders' Equity Disclosure

Common Stock

As part of our capital deployment strategy, we may repurchase shares of Unum Group's common stock, as authorized by our board of directors. The timing and amount of repurchase activity is based on market conditions and other considerations, including the level of available cash, alternative uses for cash, and our stock price. In October 2021, our board of directors authorized the repurchase of up to $250.0 million of Unum Group's outstanding common stock. The October 2021 share repurchase program expired on December 31, 2022, at which point there was no remaining repurchase amount under the program. During 2020 and the first nine months of 2021, there was no authorized share repurchase program.

In December 2022, our board of directors authorized the repurchase of up to $200.0 million of Unum Group's outstanding common stock beginning on January 1, 2023. In February 2023, our board of directors authorized an increase to the share repurchase program such that we are now authorized to repurchase up to $250.0 million of Unum Group's outstanding common stock. This share repurchase program has an expiration date of December 31, 2023.

Common stock repurchases, which are accounted for using the cost method and classified as treasury stock until otherwise retired, were as follows:

	Year Ended December 31
	2022		2021		2020
	(in millions)
Shares Repurchased	5.7		1.9		—
Cost of Shares Repurchased1	$	200.1	$	50.0	$	—

1 Includes commissions of $0.1 million for the year ended December 31, 2022.

In February 2022, we entered into an accelerated share repurchase agreement with a financial counterparty to repurchase $50.0 million of Unum Group's common stock in aggregate. As part of this transaction, we paid $50.0 million to the financial counterparty and received an initial delivery of 1.3 million shares of our common stock, which represented approximately 75 percent of the total delivery under the agreement. We simultaneously entered into a forward contract indexed to the price of Unum Group common stock, which subjected the transaction to a future price adjustment. Under the terms of the share repurchase agreement, we were to receive, or be required to pay, a price adjustment based on the volume weighted average price of Unum Group common stock during the term of the agreement, less a discount. Any price adjustment payable to us was to be settled in shares of Unum Group common stock. Any price adjustment we would have been required to pay would have been settled in either cash or common stock at our option. The final price adjustment settlement, along with the delivery of the remaining shares, occurred in April 2022, resulting in the delivery to us of 0.4 million additional shares. In total, we repurchased 1.7 million shares pursuant to the February 2022 accelerated share repurchase agreement. During the year ended December 31, 2022, we repurchased 4.0 million shares in open market transactions at a cost of $150.1 million.

In November 2021, we entered into an accelerated repurchase agreement with terms similar to the previously discussed February 2022 accelerated share repurchase agreement. Pursuant to this agreement, we paid $50.0 million to a financial counterparty and received an initial delivery of 1.4 million shares of our common stock. We simultaneously entered into a forward contract indexed to the price of Unum Group common stock, which resulted in the delivery to us of 0.5 million additional shares also in November 2021. In total, we repurchased 1.9 million shares pursuant to the accelerated repurchase agreement. During 2021, there were no shares repurchased in open market transactions.

Preferred Stock

Unum Group has 25.0 million shares of preferred stock authorized with a par value of $0.10 per share. No preferred stock has been issued to date.