Stockholders' Equity and Earnings Per Common Share

3 Months Ended

Mar. 31, 2023

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:

	Three Months Ended March 31
	2023		2022
	(in millions of dollars, except share data)
Numerator
Net Income	$	358.3	$	240.4
Denominator (000s)
Weighted Average Common Shares - Basic	198,111.2		202,628.8
Dilution for Assumed Exercises of Nonvested Stock Awards	1,408.9		875.5
Weighted Average Common Shares - Assuming Dilution	199,520.1		203,504.3
Net Income Per Common Share
Basic	$	1.81	$	1.19
Assuming Dilution	$	1.80	$	1.18

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 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 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 grant price of the nonvested stock success units and nonvested restricted stock units. The outstanding nonvested stock success units and nonvested restricted stock units have grant prices ranging from $14.20 to $45.57. 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. There were no outstanding performance based share units as of March 31, 2023. Potential common shares not included in the computation of diluted earnings per share because the impact would be antidilutive, approximated 0.7 million and 0.3 million potential common shares for the three months ended March 31, 2023 and 2022, respectively.

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. During December 2022, our board of directors authorized the repurchase of up to $200.0 million of Unum Group's outstanding common stock beginning 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, with the timing and amount of repurchase activity to be based on market conditions and other considerations, including the level of available cash, alternative uses for cash, and our stock price.

In August 2022, the Inflation Reduction Act was signed into law in the U.S. and, effective January 1, 2023, imposes a one percent excise tax on corporate stock repurchases after December 31, 2022. This excise tax is recorded as part of the cost basis of treasury stock and is assessed on the fair value of stock repurchases, reduced by the fair value of any shares issued during the period.

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

	Three Months Ended March 31
	2023		2022
	(in millions)
Shares Repurchased	1.3		1.3
Cost of Shares Repurchased1	$	53.6	$	37.5

1Includes a de minimis amount of commissions and $0.1 million of excise tax for the three months ended March 31, 2023. There were no commissions or excise taxes during the three months ended March 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. As a result of the final settlement occurring subsequent to March 31, 2022, we recorded a decrease to additional paid-in capital within stockholders' equity on our consolidated balance sheet for the value of the shares held back by the counterparty as of March 31, 2022, which was reclassified to treasury stock in the second quarter of 2022 in connection with the final settlement of the agreement. In total, we repurchased 1.7 million shares pursuant to the February 2022 accelerated share repurchase agreement.

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.