Stockholders' Equity and Earnings Per Common Share

6 Months Ended

Jun. 30, 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 June 30				Six Months Ended June 30
	2023		2022		2023		2022
	(in millions of dollars, except share data)
Numerator
Net Income	$	392.9	$	367.3	$	751.2	$	607.7
Denominator (000s)
Weighted Average Common Shares - Basic	197,180.4		201,151.7		197,641.3		201,888.8
Dilution for Assumed Exercises of Nonvested Stock Awards	956.1		1,280.0		1,182.5		1,077.7
Weighted Average Common Shares - Assuming Dilution	198,136.5		202,431.7		198,823.8		202,966.5
Net Income Per Common Share
Basic	$	1.99	$	1.83	$	3.80	$	3.01
Assuming Dilution	$	1.98	$	1.81	$	3.78	$	2.99

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 $18.78 to $45.58. 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 0.8 million and 0.7 million potential common shares for the three and six months ended June 30, 2023, respectively. There were approximately 0.1 million and 0.2 million potential common shares that were antidilutive for the three and six months ended June 30, 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 market value of stock repurchases reduced by the fair market 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 June 30				Six Months Ended June 30
	2023		2022		2023		2022
	(in millions)
Shares Repurchased	1.1		1.8		2.4		3.1
Cost of Shares Repurchased1	$	47.0	$	57.4	$	100.6	$	94.9

1Includes $0.1 million of commissions for the three and six months ended June 30, 2023 and $0.1 million of commission for the three and six months ended June 30, 2022. There was $0.4 million and $0.5 million of excise tax for the three and six months ended June 30, 2023, respectively. There were no excise taxes during the three and six months ended June 30, 2022.

In July 2023, we paid $50.0 million to a financial counterparty as a part of an accelerated share repurchase agreement. We received an initial delivery of 0.8 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 subjects the transaction to a future price adjustment. Under the terms of the agreement, we are 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 is to be settled in shares of Unum Group common stock. Any price adjustment we would be required to pay will be settled in either cash or common stock at our option. The final price adjustment settlement, along with the delivery of the remaining shares, will also occur during the third quarter of 2023 and represents approximately 25 percent of the total delivery under the agreement.

In February 2022, we paid $50.0 million to a financial counterparty as a part of an accelerated share repurchase agreement. We 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 under terms similar to the July 2023 forward contract . 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, for which we recorded an increase to treasury stock within stockholders' equity on our consolidated balance sheet of $50.0 million. Also during the second quarter of 2022, we repurchased approximately 1.4 million in open market transactions at a cost of $44.9 million.

As of June 30, 2023, the remaining repurchase amount under the current share repurchase program was $150.0 million.

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.