Good day, everyone, and welcome to the Unum Group Fourth Quarter 2014 Earnings Results Conference Call. Today's conference is being recorded. For opening remarks and introductions, I will turn the conference over to the Senior Vice President of Investor Relations, Mr. Tom White. Please go ahead, sir.

Great. Thank you, Debbie. Good morning, everyone, and welcome to the fourth quarter 2014 earnings conference call for Unum. Our remarks today will include forward-looking statements, which are statements that are not of current or historical fact. As a result, actual results might differ materially from results suggested by these forward-looking statements. Information concerning factors that could cause results to differ appears in our filings with the Securities and Exchange Commission and are also located in the sections titled Cautionary Statement Regarding Forward-Looking Statements and Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2013, and our subsequently filed Forms 10-Q. Our SEC filings can be found in the Investor section of our Web-site. I remind you that the statements in today's call speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements. A presentation of the most directly comparable GAAP measures and reconciliations of any non-GAAP financial measures included in today's presentation can be found in our statistical supplement on our website, also in the Investor section. Participating in this morning's conference call are Tom Watjen, President and CEO; and Rick McKenney, Executive Vice President and CFO; as well as the CEOs of our business segments, Mike Simonds for Unum US, Peter O'Donnell for Unum UK, Tim Arnold for Colonial Life, and Jack McGarry for the Closed Block. And now, I will turn the call over to Tom Watjen. Tom?

Thanks, Tom, and good morning everybody. The fourth quarter was a good one for the company, with operating earnings per share, excluding the special items outlined in our release, of $0.90 per share, an increase of 5.9% over last year. This brought our fully operating earnings per share to $3.55, a growth rate of 6.9%, in line with 5% to 10% outlook for growth we provided coming into 2014. These results largely reflect the positive operating trends we have been highlighting throughout the year; that is strong sales momentum, accelerating premium growth in our core businesses, and stable risk experience. This quarter we also took the appropriate actions necessary to deal with the impact of low interest rates on our businesses, particularly long term care, and we’ll cover that in more detail in a moment. But for now let me highlight a few points before turning things over to Rick for his more detailed remarks. First, we again saw excellent sales results across all of our core businesses this quarter, continuing a trend we have been building throughout 2014. Unum U.S sales increased by 25% for the quarter and 21% for the full year, with strong results across all product areas and all sectors of the markets we serve. Likewise the Colonial Life, sales this quarter were also strong, increasing 15.7% for the quarter and 11.6% for the full year, again with solid performance across all market segments. And finally, Unum UK sales continued to rebound this quarter, increasing 27.8% for the quarter in local currency. These solid results across all three of our businesses reflects the strength of our competitive position in our markets and today’s generally more favorable conditions. Second, these strong sales trends over the past few quarters, combined with improved persistency in most of our business…

Thanks Tom and thanks for the comments and I very much look forward to the opportunity. As far as our investors are concerned, I expect a very smooth transition. You can also expect continuation of the execution on the strategy which you have become accustomed to with Unum, which is one of disciplined growth. Let me turn back to our discussion on what was a very good quarter. I’ll start first with Unum US, where in total fourth quarter operating earnings declined by 2.2% to $212.4 million, with favorable premium growth that Tom mentioned offset by lower net investment income and our change in discount rate that we talked about. The overall benefit ratio for the segment was stable at 71.3%, which we will dissect by each business line. Operating income in our group disability business declined to $66.7 million from $68.9 million a year ago. Premium income increased by 5.7% on strong sales and improved persistency. While the benefit ratio increased to 83.7% in the quarter, from 83.2% a year ago and 82.1% in the third quarter. As we indicated at our investor meeting in December, we reduced the new claim reserve discount rate in our LTD line in the fourth quarter by 50 basis points, causing a reduction in operating earnings of $6.6 million and elevating the benefit ratio by 1.2%. Clearly, today’s low interest rate environment was the driver of this decision and is also the driver of the lower net investment income as the portfolio yield continues to decline, given the lower new money investment yields. While the impact of lower yields was offset somewhat by higher miscellaneous net investment income this quarter, the interest rate environment continues to create ongoing pressures. As we had discussed previously, we managed this impact by gradually reprising our in-force…

Thanks Rick. Before we move to your questions, I’ll close by just repeating that we’re very pleased with our overall results this quarter and for 2014. Our strong sales persistency and premium growth, along with stable risk experience, set us up well for the future. Without question, the current level of interest rate is challenging, but we are confident that we are taking the necessary steps to manage effectively in this environment. Our focus hasn’t changed. We continue to profitably grow our business to maintain strong margins through our disciplined pricing, underwriting and expense management and to generate capital which we can continue to use to support the needs of our business, including investing where necessarily to support growth, but also obviously continue to return capital to our shareholders. Now this completes our prepared remarks and Debbie, let’s move to the Q&A session.

[Operator Instructions] We'll go first to Steven Schwartz with Raymond James.

Good mooring everybody. Congratulations, Tom and everybody. I want to talk about – I guess probably, Rick I should probably know this, but in the statutory operating earnings that you show and net earnings in your capital, is Unum included in there?

Yes, First Unum is included in there.

Okay, so my understanding, in the investor day, you talked about $150 million stat charge for First Unum for LTC reserves. I think came out a little bit bigger. How do you get to $149 million that came to operations with that kind of stat charge in First Unum?

Yeah. Actually the stat charge that we have in First Unum is a direct move to capital. So it doesn’t flow through the operating earnings that you’d see in First Unum .Although it is included in those results, that actually movement in reserves flowed straight through the capital line.

Okay. And then following up the non-First Unum stat charge, the $57 million, it was my impression I think from the investor day that a stat charge was unlikely and that there was significant margin if interest rates stayed where they were for a long time. Do we take away from this that that’s not the case?

Jack, you want to take that one up?

Yeah. We talked about it on investor day that this was largely a GAAP charge. As we work through and settled all the reserved numbers across the difference entities, this charge emerged. My view is it really doesn’t change anything we said at investor day. We are still very comfortable with our GAAP reserves. We still have a decent margin between our GAAP and stat reserves. All these charges, First Unum and the $57million were built into our capital plans for 2015 and so were reflected in our estimates for share buyback and free cash flow generation.

Okay. Jack, one more if I may on this topic and then I'll turn it over. The $57 million, was that claims reserves or ALR?

It was both.

It was both. Okay, thank you guys.

We’ll take our next question from Jay Gelb with Barclays.

Good morning and congratulations from us as well to everyone that transitioned. I just want -- I had a couple of questions on that last night. Can you give us some perspective on why announce the transition now? I know it wasn’t related to the fourth quarter charge, but if you just clarify that, it would be helpful.

Yeah, and I do run the risk, Jay of over answering a little bit here because I want to step you back a little bit. We as a company have spent an awful a lot of time on leadership development and succession planning actually for a number of years. And not just the management team, but obviously the board has been very heavily engaged in that process and while it’s maybe not glamorous work, it's essential if you are going to have good continuity and continue to maintain the principles that are important to the company, which we believe strongly in. In fact, actually if you look back over the last couple of investor meetings, you would have seen windows into our thought process back in 2013 as you may recall. Kevin McCarthy has announced his retirement. We are going through a good, smooth transition of that responsibility to Mike Simonds. This past year we talked about Randy Horn stepping out of the Colonial C.E.O. position and a smooth transition to Tim Arnold. And so I guess my point is this has been a continuum of work that we as a management team and a board has done. And obviously over the years the succession of the C.E.O. has to be part of the discussion with the board as well. In this case it wasn’t about age or health obviously. It really was more about when it just felt right. And just the three things I think that were important in my mind is when it just felt right were number one, feeling good about the leadership team and having a leadership team in play that has plenty of runway still ahead and they can run this business very effectively for the next five to 10 plus years. Obviously we…

It might be good to go business by business if we could actually, Jay because obviously the fundamental of each business is different a little bit. But maybe, Mike maybe just speak to Unum US sales outlook.

Yeah. I think the bottom line, quick answer, Jay is I think that the guidance is still a good guidance. We had a line of sight to what the pipeline for fourth quarter looked like when we established that. So I don’t see the big changes there. Just as a quick refresher, we do anticipate good, solid 6% to 8% sales growth across most of our segments, in particular the core market group insurance segment and our long term benefits segment. The offset to that to a degree is the large case market. We had a very good year in 2014, but we do view that as an opportunistic place to write business. We saw rates harden a bit as some competitors needed to re-price their books. We certainly have the capacity and the desire to repeat 2014 in the large case market if we can do so within our disciplined pricing parameters, though our business plan isn’t built around that. We’re anticipating a bit of a decline to the tune of about10% and the net is that sales guidance around 2% to 4%, which I think still holds true. We feel good about what we bring to market. It’s really more where is the market itself going to be? And that’s a little bit of a wild card.

Tim, you want to touch on the Colonial Life?

Sure. Yeah, we feel very good about the results when we finished last year. As Rick mentioned it's the highest growth rate in the company since 1990. With the rate at the market conditions overall, we feel good about our sales team. We feel good about the value prop that we bring to the market and the receptivity there. Good progress across all of our market segments, but we still feel comfortable with the range we’ve given before, 6% to 8% on the sales side.

And Peter, just last on the UK? Peter O’Donnell: Similar to Mike really, I think in terms of 2014, we actually outperformed a little bit in the fourth quarter. We had a large one off transaction which gave a nice clean through a round the claims buyout which gave us a bit of a following win for that fourth quarter. So that was a little better than we expected. When I look at the sales outlook, we had 7% to 9% in 2015. Still looking at that, I think that’s still challenging particularly given the interest rate environment where our discipline and what we stand for is we will continue to put rate through and it depends on the competitor reaction on that. But How I feel that’s good today.

Thanks so much.

We’ll go next Suneet Kamath with UBS

Good morning. Again our congratulations as well to the team. Just wanted to go back to the Unum US LTD sales growth, I think it was 25%. I know you guys manage the pricing of new business relative to the discount rate. But I just wanted to confirm that the discount rate adjustment that you are making here in the fourth quarter, was that already reflected in the pricing that you put out to achieve this 25% sales growth rate?

Mike?

Yeah. So we would -- if you think about the sales cycle, it depends on the market segment that you’re in, but if you’re in group insurance you think about the sales cycle in a three months range. Where we see interest rates three to six months back, that’s where sales are coming on. But then we feel actually very good and Rick made it in the opening statements. We feel very good about the pricing level of new business that’s coming on. But just as Peter was saying as we look forward into 2015 and we talked about this in our guidance meeting, we are going to move new business rates up. We have been thinking low to mid and I think probably mid is better in terms of where you’ve been at with interest rates over the period of time since the end of last year. Again feel good about the business that’s coming on. We’ll move it up again and it will depend a bit on the market and the market conditions as how much that slows the sales growth. But again we feel pretty good about where we are at and the ability to price new business and to renew business over the next year or two to where interest rates are.

Okay, thanks. And then I guess on Group disability and the loss ratio, I think there was a comment in the prepared remarks about seeing higher claims maybe relative to the year ago. I just want to get some color in terms of what you’re seeing, where it came from and whether or not you expect that will persist going forward

Mike?

Yes, sure. We saw a little bit of volatility in the average size of new claims, but actually pretty much within the long term expectations. Other key factors submitted incidents bounced around a little bit quarter to quarter, but paid incidents has been very steady. And then just recovery performance offsets have been rock solid. I'd say, overall we were actually pretty happy with that continued consistency out of the risk line for LTD.

Okay and then just the last one for me on your capital generation model, I guess for Rick or Jack. If sales are at a level that’s persisting here, the $150 million of capital uses that you guys talk about between interest expense and growth funding, should we still expect that to be a pretty good number at these sales levels or could there be some upward pressure in terms of capital requirements if growth remains strong?

Thanks, it's Rick. Actually it's a very good question and we are seeing sales results. And I’d go back to the some of the things we talked about from an overall capital perspective. The first place we want to put our capital is back in our business. We are doing that and I think that we’re very happy about the premium growth. I would tell you that where we sit today, we don’t see a noticeable difference in term of how that impacts the capital plan. We continue to grow at these type of rates and you’ve heard that we are a little bit more metered. As we look out over the course of the year, you might start seeing some of that. But that’s a situation that we want to have and actually put more capital right back into our business. But as we sit here today, I don’t think that alters our capital plans. Suneet Kamath – UBS: Okay. Great. Thanks guys.

We’ll go next Mark Hughes with SunTrust.

Good morning and congratulation, Tom. The voluntary benefits, the sales there are quite strong. How does that fit in or is there a connection with the economy pricking up perhaps a little bit, a little more flexibility in terms of insurance arrangements at a lot of small businesses. Is that momentum going to continue in 2015?

As you know, Mark, we’ve got two windows into that business. And maybe Mike talk to the Unum U.S perspective and then Tim following on the Colonial Life piece.

Yes, sure. Thanks Mark for the question. On voluntary, we are seeing a little bit of tailwind on a couple of fronts. We’ve seen participation at the plan level improved just a bit. I wouldn’t say dramatically, but certainly as consumers have a little bit more disposable income as the economy improves, oil prices are a bit lower, that helps us. We are seeing good cross selling into our existing group insurance line. That’s been a big driver to expanding voluntary through those relationships. And then new clients coming on to the voluntary benefits line. Sales were up about21% in the quarter. It was a good year. Overall I’d say the pipeline looks good. That will be one of our faster growing businesses within that 3% to 4% range we talked about.

For Colonial Life, we are seeing improvement in the economy coming through in our sales results, especially in the small case market. We believe that small businesses are beginning to rebound a bit with hiring in the less than 500 life segment last quarter. Our sales growth was north of 22%. And so we are seeing more traction in that marketplace. We are also seeing a continued need for the products that we manufacture based on changes happening in the medical industry. High deductibles create a need for a lot of our products. And we also believe that our mission to protect America’s workers is resonating in the field. We feel good about the marketplace and the momentum.

I think you made the comment and this is more macro, some evidence of better underlying natural growth, but not accelerating. Anything you want expand on that?

I was going to say, Mark from the comments we did say that. So you’re thinking that the one percentage type of range, maybe even a little bit under that. We haven’t seen it accelerating. It’s been consistent. Mike, if you could add to that in terms of the natural growth.

Yeah. The two levers for us in coverage payroll are the number of employees going up and then it’s salary that is covered for disability and life insurance that can be leveraged off of income. And as Rick said, we’ve seen probably a little bit more on the number employed. We’ve seen a little bit weaker in terms of the growth on income.

On normal times that should be what, 3% maybe?

Yeah. We would see 2%, somewhere ranging around that, up or down a little bit.

Okay, thank you.

We’ll go next to Bob Glasspiegel with Janney Capital.

Good morning and congratulations to all as well. When you lowered your discount rates, interest rates were probably 40, 50 basis points higher than they are today. So, if we got the 10 year staying where it is, or 30 year, whatever rate that you look at that have come down from when you set the discount rate for this year, should we look for a headwind going into 2016?

Rick, you want to take that?

Yeah, certainly, Bob. What I would actually say is and that’s what I was trying to articulate around our overall view o\in the earnings, I think as interest rates stay here relative to what we talked to you about in December, there are headwinds and we view them as that. And so those are things that we will have to evaluate as we get out on the year because what we reflected in December certainly was the current environment, which was about 50 basis points different than it is today. We will have to evaluate that as we get out towards the back half of the year.

I think that’s going to get an answer as we go through the year. It’s still pretty early, Bob and we just got through that process of going through the discount rate adjustments. So it’s early to speculate on what we are going to do in the back half of the year.

But I’m saying you do have flexibility to adjust pricing midyear as well if you had to?

Bob, this is Mike. Absolutely. And so we actually -- we looked at it on a semiannual basis and frankly a little bit even more frequent than that on tactical changes. So that’s certainly implied.

And the pound is also a headwind as well after being a helpful item for last year. Is that sort of baked into your accounts and how much of penalty for currency from UK do you see?

Rick, do you want to touch that?

Yeah. So we have seen that headwind. So we often talk about our results for the UK on a pound basis because it’s hard to chase around the currency level. But as we roll that through in our EPS and what we’ve factored in going into next year, is a level of 155 on the rate, which I think we are a little bit lower than that as we sit in today. But that’s what we’ve factored into our forward look.

So slight headwind if it stays at 152?

Yes, slight.

Okay. Got you, thank you.

We will go next to Jimmy Buhler with J.P Morgan.

So you reported fairly strong sales across the board, but I was wondering if you could talk a little bit about just competitive conditions in the US disability market as you’ve gone through the January renewals and what you’ve seen competitors do in terms of pricing.

Mike?

Yeah, sure. So it certainly remains a competitive landscape and I think that’s true in group insurance and voluntary benefits as well. We still certainly see some players out there that are looking to grow share or in some cases actually recover some share using price as a lever, but on balance. And this is similar to what we would have talked about over the last couple of quarters. We have seen, I would say a gradual hardening in rates in the market. We’ve got some sizeable players that are looking to improve the margins on their books and get their ROEs up from where we think industry averages are sort of in the mid-single digits. On balance it’s actually been a more favorable environment, a completive one, but a bit more favorable.

And then on margins, your results have been fairly stable the last several years. But as the economy recovers, are you seeing any improvement in claims incidence trends, or recovery trends, what is your expectations are there?

I’d say we work pretty hard to diversify the book. And heading into the downturn of the economic cycle, we begin to see a deterioration in our claim incidents, in recovery rates offsets. And so I think as things begin to improve albeit very gradually, I wouldn’t anticipate a big swing towards a more favorable outcome. Consistency is probably the best guess,

Okay, and then just lastly a cross-section on your EPS guidance. I think you mentioned you are more comfortable with the low end of the 2% to 5% range given the environment. So I was wondering, are you -- when you talk about growth, are you talking off of the 355 for 2014 that you reported, or the lower number given the change in accounting for low income housing credits?

Yeah, it’s actually -- Jim, when you look at that, it’s actually going to be off of the adjusted number that we are looking at, but that’s going to be re-casted for 2014. So we’ll have that …

You’ll still be around 351 you are guessing?

Yes. So it’s going to be the $0.04 cents so it should be roughly 351. We’ll have that out there shortly for you.

Okay, thank you.

We’ll go next to Yaron Kinar with Deutsche Bank.

Good morning and congratulations as well from us here at Deutsche. So a couple of quick questions here. What took up the expense ratio across all the core business segments this quarter?

Rick.

Actually, it’s a good news story Yaron when you look at it. Most of that is compensation given the higher sales levels that we saw. So that’s one of those expense lines that we don’t mind paying out there. We’d like to see that as part of our higher sales.

Okay. And then could you quantify the variable or miscellaneous investment income, what kind of impacted that?

Certainly. I actually talked about that across a couple of our lines. Just to give you a sense of that. We run roughly in the $15 million a quarter range, at least we have over the last several years. And so this quarter we actually saw an uptick of that in the $7 million, $8 million range, something like that. What I’d remind you, last quarter we saw a down tick of $7 million, $8 million. It varies around that $15 million level. We did see a higher level in the quarter. Maybe a little bit north of that $8 million that I mentioned, but it’s – we factored it through our results and we’re just going to wait that volatility to go through, but nothing new to note there.

Okay. And then one final one and I apologize if I missed this, but of the $700 million GAAP preserve strengthening in long-term care, how much of that was interest rate related?

The $700 million was virtually all interest rate related. There were some pluses and minuses on the liability side. Some of those, they went in opposite directions. They were largely offset. I think you can pretty much assume all of that is an interest rate charge.

Great, thank you very much.

We’ll go next to Randy Binner with FBR Capital markets. Randy Binner – FBR Capital Markets: Hey, morning. Congrats too on the long term carry on Unum. I just wanted to clean up a question I think from Steve Schwartz which was a kind of getting into the element of this charge that moved out of GAAP and into stat. I apologize if I missed it. I haven’t been able to parse that out from the disclosures. Was there an element of stat charging? Can you remind us of what that was versus the GAAP items that have been discussed?

Maybe I'll take a shot of that, Randy. When you look at the $57 million that we recorded that I mentioned, these are a lot of moving pieces as we went through that reserve charge process. On the GAAP side we articulated it and as Jack just said, it's mostly interest rates. As you move around the different pieces as well, you can have some stat impact fall out of that. It’s nothing that I would know more than the amount of movement that happened as part of that charge and the $57 million was very much contemplated as part of our overall capital results in 2014, our capital plans in 2015. Randy Binner – FBR Capital Markets: All right and that 57 is all in the First Unum, the New York?

It's actually in multiple of entities. That’s just part of the noise that came out of the process with the different entities that moved around. Randy Binner – FBR Capital Markets: Okay, but similar to the rates. And then I think one of the topics that’s been discussed in the past is kind of sizing the delta between the GAAP and the stat reserves or capital, either one. And the long term carrier, is that something you can update us on just to kind of think about what the potential risk would be if there was another review? And maybe help us understand what the process would be for another kind of comprehensive review on long term care given that rates are lower than when you went through the planning process on this?

So the stat-GAAP difference we’re talking about it being in the several hundred million dollar range at the investor meeting. That’s still applicable. That’s where it is. I would say in general over the last several years, statutory reserves have grown faster than GAAP reserves. And so it's likely over the pursuing years that that would continue to grow. We looked at the interest rate charge. There’s a long term charge. We said interest rates would stay low for the next four to five years and then revert to the mean. The view is it’s more of how long that charge lasts given the current interest rate environment which has moved against us even since. But we still think it's a stable place. It has a lot of factors in it including where spreads are, opportunities in different asset classes and things. We are comfortable. We talked about biting off a three to five year horizon. We are still comfortable with that. Clearly the current interest rate environment pushes it towards the front of that as opposed to towards the back.

We’ll go next to Erik Bass with Citigroup Erik Bass – Citigroup: Hi. Thank you. One of the factors that I think you’ve mentioned that’s been driving sales is additional product sale to existing customers. I was just hoping you could quantify the impact there and maybe talk about how much further opportunity you see?

Mike?

Sure. So we see about north of 60%. And to give you a sense, actually we see in the large end of the market a number even north of that in terms of the percentage of our sales that comes from existing client relationships. That’s important to us for three reason. One, because we understand the risk of this better. Two, it tends to come in more favorably priced because they know us and we tend to have a good service relationship. And three is each time that we add additional lines of business into our client relationship, it drives the stickiness of that account up a bit. So if you take 2015 as we talked about low interest rates, certainly a product like LTD, we are going to be in there at renewal time with modest increases. Our chances of placing those increases in the context of a broad relationship are significantly improved. It's really the key strategic driver for us. If you think about the runway, it’s actually pretty substantial. So we average right around three products per existing client relationship and we would see a fully integrated client be more like six or seven different lines of coverage as you think about the different demographics within the employee base. We feel like we’ve got a long room to continue to grow within that base.

Like you were saying, that’s one of the variables I think you and your team are focused aggressively on. Other ones would be increased participation, but you can get pretty granular in terms of operational things that we are doing. And I think that’s probably part of your game plan for 2015.

Yeah, it's a great point. So in addition to additional benefit offered as part of the plan, you actually look at where you have employee contribute benefits or voluntary benefits in place and what’s the participation level. Even without the additional cross sell, you can drive premium growth and improve the risk outcome that you get a better spread as you drive that participation up of that as well. Erik Bass – Citigroup: Okay, thank. That’s helpful. And then if I could ask one follow up on long term care. Just hoping you could go into a little bit more detail on the adjustments you made for mortality and morbidity. And I realize in total that was offset I think by assuming the re-rates that you’ve achieved, but if you could just talk about the dynamics you’re seeing there and how much of the adjustments you made are based on actually claims experience?

I would say that the vest major of our current assumptions are based on our own calms experience. We were informed by society studies. We had bought some risk guidelines from consultants. And so we measured our own experience against those, but we did look at every assumption, and I would say the vast majority of those assumptions are based on our own experience. Erik Bass – Citigroup: Got it, but is it correct to read that both mortality and morbidity in isolation were slightly negative versus prior assumptions?

Not necessarily actually. Things went in different directions within there, but they offset. Erik Bass – Citigroup: Okay, thanks. I guess just last on that, you’ve given sensitivity to GAAP reserves for interest rates. Is there anything similar you can provide for either mortality of morbidity such as what a 1% change in either of those factors would mean for the GAAP reserve?

Yeah. It's clearly that the long term assumptions, so there is sensitivity. But I don’t have a rule of thumb on 1% change. Erik Bass – Citigroup: Okay, thank you.

We’ll go next to Ryan Kruger with Keefe, Bruyette & Woods. Ryan Krueger - Keefe, Bruyette & Woods: Good morning. Congrats to everyone from us as well. On I guess back to the sales growth in Unum US, can you give us some underlying color on I guess if you think you’re -- in general you’re just the market is growing at a substantially higher level than it was or do you think it's more attributable to you guys gaining market share?

Mike?

Thanks, Ryan. Time will tell a little bit because the industry reports lag obviously the company level report. It will take a little bit of time to actually see what happens with the market. I’d say I'm actually encouraged a couple of points on that front. One, we had seen a slowdown in the smallest end of the market and Tim alluded to this from a Colonial Life perspective as well. But we’ve seen a persistent drag in the less than 100 employee market and that over the last couple of quarters has really started to come back. In fact we saw sales over 30% in that less than 100 life group insurance market. Those are often new lines that an employer is adding for the first time. So you’re starting to see a little bit market growth on that front. The second component is we are seeing the addition of additional lines on the voluntary front as health plans, as consumers are buying down health coverage through higher deductible plans. That leaves gaps. And so we are taking what might be a traditional life in the facility client and you’re in there with accident insurance and other supplemental health products. And that’s almost always industry growth versus the swapping of business amongst carriers. Ryan Krueger - Keefe, Bruyette & Woods: Got it, thanks. And then if I could one on long term care. Can you give us, or remind us what level of future premium rate increases that you guys are projecting within your long term care reserves?

We don’t have an exact number for you. I would tell you as we did at the investor meeting that we are basing that level on final rate increases. And so the assumption we have going forward is based on filings that we’ve already made related to rate increases. The assumption is also assuming that we get results on currently filed rate increases that are largely consistent with the results we’ve had on previously filed rate increases. Ryan Krueger - Keefe, Bruyette & Woods: Okay. So just to be clear, your reserves do not to assume any additional rate increases beyond what you’ve already file?

No. Ryan Krueger - Keefe, Bruyette & Woods: Great. Thank you.

We’ll go next to Tom Gallagher with Credit Suisse

Good morning and congrats Tom. Just had a question about how we should be thinking about cash flow generation if rates remain low here. The $220 million or some of charges if we add up the New York sub and fair wind, is that a number that we should expect to be recurring if rates remain at current levels and if you guys bake that into your capital plan, i.e. can you still do at least the low end of your buyback assumption even if rates remain low?

Tom, to answer that I think most succinctly would be to say that we’ve factored in the current environment into all of our plans. So as we’ve updated things and even as I talked about, some of the pressure we are seeing in the range, inclusive of our capital plans reflect what we’re seeing out there today.

But can we assume though, Rick, that we would see similar levels greater or less of that we’ll call it $200 million or so cumulative for LPC on a stat basis. Is that a number that we should be thinking about as recurring or is there a reason to think that that might abate or change?

No, I actually expect that would be much lower as we get out towards the end of the year because a lot of what actually came out of what you saw in those results, both the 57 I mentioned as well as the First Unum moves, had to do with the re-shaping that we did over our overall reserves. And so I think interest rates their movement down outwards would be less impactful in terms of what we’ve seen in First Unum and wouldn’t expect things to recur in our other entities as well.

Okay, thanks.

We’ll go next to Eric Berg with RBC Capital Markets.

Thanks. Good morning Tom. Thanks very much. I just wanted to clarify, just to get an understanding of the difference between the 57 and what's going in your New York Company. Should I think of those two numbers, one a charge that went through your statutory income statement and one that I gather from an earlier response that went to surplus? Should I think of those two charges as independent?

Jack?

I'm not sure they are independent. In fact they all came out of the same reserve review, but the charge in New York was split. So a piece of it went through the equity line and a smaller piece in showed up in statutory earnings.

Okay. My follow-up question, my second question, not a follow up question, but a separate question relates to your ability to increases prices and the speed with which you can do it. My understanding is that this is not like many businesses in the sense that once you decide that you need a price increase, my understanding is you can’t do it the next day. You have to notify your sales people. You have to notify the customers. You have to notify your intermediaries and the brokers and then maybe, I'm not sure, maybe you can answer as part of, can you include this as part of your response there, maybe regulatory things that you need to do. There may be IP issues that you need to deal with from a price increase. My question, what's involved and how long does it take to raise process once it becomes apparent they need it?

Just to clarify Eric, are you talking about the group business or you are talking about the long term care business or both actually?

I'm really talking about group disability.

Group disability, okay. Mike, maybe walk through just the pricing cycle processes actually because it's a great question.

Yeah, it's a really good question. I think it’s actually sometimes a little misunderstood because I think the ability to place [injuries] within your in-force block is actually a competence that has to be built over time. And I think you actually nailed a number of the key pieces. First you have to understand within all the cells that make up a pretty diverse block of business, where do you want those increases to hit and at what level? So there is a fair amount of work that goes into that. But actually the real work comes once you’ve decided where those increases are going to hit and it starts with as you said communication and the ability to effectively communicate with brokers and consultants and ultimately to that end, clients. You want to actually show up with not just a take it or leave it, but you want to have a set of options around changes that they could be making in their plan design that could offset some of those increases so the net is a profit improvement. But you’re given the clients some options to work with. You want to have clear metrics in place so that you understand the balance between placing increases at various levels and risk of termination. And then you want to have incentives lined up. You need to have, as you put a lot of work into ensuring that we’ve got a field force that is properly motivated and understands the importance of placing renewals and having a healthy book of business going forward. It takes some amount of work to build the confidence. I’d say, we look at it. We go through every case, say over 500 employees. Every year that it’s not in a rate guarantee, it’s getting looked at and assessed. In the core business under say 500 lives there’s a lot more transactions there. We are going to go through somewhere between 25% and a third of those cases every year. But you get a sense from the scale of the program.

But as far as new business is concerned, interest rates are now what, 40, 50 basis points lower than they were just a few weeks ago. It’s apparent I think that you need price increases on new business relative to what you were thinking about charging on new business just again two months ago. How long will it be before you can institute price increases on new business relative to what you had planned just a couple of months ago to charge on new business?

Yeah. You can move actually pretty quickly because you have underwriting guidelines in place that give you some flexibility. So what you do is you need to shoot towards the upper end of that range and effectively you’re placing some increase there. And then twice a year we go through a thorough review of all of our manual files rates and make adjustments. And so again, it’s not a long cycle to think about in terms of pretty quickly on underwritten business and actually getting to the full block within six months.

And Mike, I think Eric referenced in his question too regulatory involvement. That’s not necessarily the case I don’t think in the group piece as you think about what’s needed to be responsive to the market.

Yeah. Certainly it’s a big compare and contrast to individual products of the long-term care business where it is much more the regulatory environment is the driver. Within group insurance you’ve got much more discretion in typically ranges that you can operate within.

Great. Thank you very much.

We’ll take our next question from Seth Weiss with Bank of America.

Thank you for taking the questions. I just wanted to follow up on the existing sales to current clients. Is there a general pattern of moving some specifics products lines where now they’re say group LTD, the traditional entry way and then you’ll see that flow through to other product lines or is it generally give and takes across the board?

I would say it is give and takes across the board. There is -- actually often there is a voluntary benefit relationship in place that we are bringing group insurance in or an employer paid component. Actually our multi life individual disability, which is disability income protection for higher earners tends to be a great place for us to do cross selling into those relationships as well. If you look at it in sum total, it comes from every direction, but certainly having a very large block of long-term disability that’s the base that I’d say most frequently we’re cross selling into. And I’d say most frequently we are cross selling voluntary benefits into those LTD relationships.

Okay, that’s helpful. Thank you. And then one question on persistency, and correct me if I'm wrong, but I believe the persistency that you reported for 2014, it doesn’t account for any renewals that you may have lost January 1. I think you just quickly discussed the January 1 renewals and how those came through.

Yeah, sure. You’re correct. So it’s not reflected in that, but as we look forward and you would have seen premium guidance of growth in the 4% to 6% range for Unum US and that reflects on I think pretty strong continued persistency. We did 90.5%. That’s a very high level, but certainly somewhere in that range which we feel really good about.

Great. Thank you very much.

We’ll go next to Ken Billingsley with Compass Point. Ken Billingsley – Compass Point: Good morning. One of the questions I think I heard the answer to if it was asked, have you disclosed what your new interest rate assumption is and what it was before?

I think that’s a broad question, Ken. I think what I would tell you is our assumptions in aggregate across the company would have been what we saw at investor day and they have come down now from that timeframe 40, 50 basis points. As you get to the different parts of the business, that’s all reflected through. It will have different impacts in different areas, but I think the best way to look at it is we are reflective in our outlook for the year now based on what we see for current rates. Ken Billingsley – Compass Point: I guess another way to ask this and if you don’t have an actual percentage, obviously the charge infers that you made some kind of adjustment. Can you talk about how many basis points adjustments you made from your original long-term expectations to where those expectations are now? Is it 50 basis points, 100 basis points change?

Yeah, I think you can back into it. The charge was a $700 million charge. It’s largely attributable to interest rates. We’d given prior guidance that 25 basis points change in the discount rate was worth about $400 million. Ken Billingsley – Compass Point: Okay. The other question I have is regarding the sales growth and what you saw this quarter and expectations going forward. You sound I'm positive. A lot of large brokers, even one today, talked about they’re expanding their employee benefits footprint through M&A. Can you just talk about how that’s impacting your future growth prospects? It sounds like a lot of the growth is coming from existing customers. But is there going to be an avenue maybe for even bigger growth in the latter half of 2015 into 2016 as some of these other distributors and brokers are committing to growing that part of their business?

Mike, maybe you can speak to the broker side, but also [indiscernible] also talk about the Colonial side of the distribution equation too because they are very different, but great dynamic. Mike?

Sure. Ken, we have seen that in consolidation that you are referring to. I would say it’s been a dramatic acceleration, but a good steady increase in firms coming together. I think as they come together the rate we’ll invest on scale and some of the capabilities that they need around compliance, advisory services, some of the technology components that they’re bringing into employers to help them manage. Generally I don’t see a huge impact for us. We tend to have a good, broad distribution, certainly strong relationships across all the major brokerage firms. But in general I would agree with your read that is that employee benefit in total. But then even outside of healthcare, I’d say the focus amongst brokers and advisors towards things like voluntary benefits and financial protection products like we are in the business in, that level will have some focus and definitely increased the uncertainty around healthcare as well. But Tim is going to talk through that. A – Tim Arnold: For Colonial Life, about 70% of our sales come from brokers. So 30% are on a direct basis. As we’ve seen consolidation in the broker industry, we’re beginning to see brokers migrating out of the really small end of the market and that gives us a huge opportunity to serve that marketplace on a direct basis. But we I guess 70% of our discussion with brokers we are consistently rated as one of the best businesses for brokers to do business with on the voluntary side. So it’s still a very important marketplace for us, but increasingly see the opportunities to serve the small end on a direct bias. Ken Billingsley – Compass Point: And just say one point, causing a migration out of did you say the smaller accounts? A – Tim Arnold: Yeah, especially the both 50 life market with the ACA middle marshal requirement and the impact that has on broker commissions. So we’re beginning to see some migration out of that marketplace, especially as brokers consolidate.

Tim, that’s why I see I think some good growth because your direct sales efforts are focused on that part of the marketplace where there's a void that’s been created. A – Tim Arnold: Absolutely. For last year in the less 700 life market we are up 23%. Very strong progress there and a real need in that marketplace too as brokers consider whether they can serve that marketplace on this. As we see some migration, those employees and employers in that segment still need advice. And so we are there to help them with that.

And consolidation on either Unum US or with the Colonial Life has not – no one has been able to drive higher commissions or anything else to help – have you pay for obviously the compliance and technology that they’re bringing to the customer.

No. We have definitely not seeing that. Ken Billingsley – Compass Point: Okay. And the last question, I may have dismissed comments at the beginning when Tom was talking about the chairman. I thought he was referring to himself for the next two years or was that in reference to Mr. Ryan?

No. I’ll be staying on as chairman for two years actually, Ken. So again at the annual meeting I’ll step up to the chairman role and stay on the board for two years. Our current chairman Bill Ryan will actually step into a lead director role until he retires at the annual meeting in 2016. Ken Billingsley – Compass Point: Okay. But your expectation is not to be on the board after two years or just not be chairman?

I think that’s the thinking right now, yeah. But I think it’s good governance. For a CEO to stick around at the board for too long I think is one of the things we very much don’t want to do. I can serve in a very important role for a couple of years, both with the board and with management in terms of helping assure continuity. But I think right now we’re thinking of it as a two year period. Ken Billingsley – Compass Point: So I did hear that correctly. All right, well thank you for taking my questions.

We’ll go next to Steven Schwartz with Raymond James for a follow up.

Hey again everybody. Just a quickie. Looking at the numbers versus my numbers and of course my numbers are estimates. I did notice that expense levels did seem kind of high. I was just wondering in general, Rick, if you can comment on where expense levels may be higher than normal because of the sales and changes in the deck rules that occurred in 2010 and what have you?

Yes Steven, let’s come back to it. We actually see – our sales costs were higher. So I think growth you do see more sales out there and deck rule only have much to do with it because when we talk about our operating expense, we are not factoring the decking process into that. Good sales, pay a little bit more in expenses, that’s a good history.

Okay, thanks. End of Q&A

Thank you, Steven. I want to thank you all for taking the time. I know this call went a little long, but there was obviously a lot I thought we should touch on. So we appreciate your participation and this will complete our fourth quarter 2014 earnings call.

Thank you, gentlemen. Ladies and gentlemen, this does conclude our conference. Thank you for your participation.