THG 2018 Annual Report

Reclassifications out of accumulated other comprehensive income were as follows: YEARS ENDED DECEMBER 31 2018 2017 2016 (in millions) Amount Reclassified from Details about Accumulated Other Accumulated Affected Line Item in the Statement Comprehensive Income Components Other Comprehensive Income Where Net Income is Presented Unrealized gains (losses) on available-for- sale securities $ (3.2) $ 26.6 $ 36.2 Net realized gains (losses) from sales and other (2.6) (3.6) (27.4) Net other-than-temporary impairment losses on investments recognized in earnings (5.8) 23.0 8.8 Total before tax 10.3 4.2 17.7 Tax benefit 4.5 27.2 26.5 Continuing operations; net of tax (19.1) ² ² Gain on sale of Chaucer business (0.2) 2.5 (0.2) Discontinued operations - Chaucer business 0.1 ² (0.1) Discontinued life business; net of tax (14.7) 29.7 26.2 Net of tax Amortization of defined benefit pension and postretirement plans (9.5) (12.4) (9.7) Loss adjustment expenses and other operating expenses (1) 1.9 4.3 3.4 Tax benefit (7.6) (8.1) (6.3) Continuing operations; net of tax (16.4) ² ² Gain on sale of Chaucer business (0.1) (1.3) (0.1) Discontinued operations - Chaucer business (24.1) (9.4) (6.4) Net of tax Currency translation obligation recognized with sale of Chaucer business (23.2) ² ² Gain on sale of Chaucer business Total reclassifications for the period $ (62.0) $ 20.3 $ 19.8 Benefit (detriment) to income, net of tax (1) The amount reclassified from accumulated other comprehensive income for the pension and postretirement benefits was allocated approximately 40% to loss adjustment expenses and 60% to other operating expenses for each of the years ended December 31, 2018, 2017 and 2016. 11. STOCK-BASED COMPENSATION PLANS On May 20, 2014, shareholders approved The Hanover Insurance Group 2014 Long- 7HUP ,QFHQWLYH 3ODQ WKH ³ 6WRFN 3ODQ´ :LWK respect to new share-based award issuances, the 2014 Stock Plan replaced The Hanover Insurance Group, Inc. 2006 Long-Term ,QFHQWLYH 3ODQ WKH ³ 6WRFN 3ODQ´ DQG DXWKRUL]HG WKH LVVXDQFH RI VKDUHV LQ D QHZ VKDUH SRRO SOXV DQ\ VKDUHV VX bject to outstanding awards under the 2006 Stock Plan that may become available for reissuance as a result of the cash settlement, forfeiture, expiration or cancellation of such awards. The 2014 Stock Plan provides for the granting of the same types of awards as the 2006 Stock Plan, inclu GLQJ VWRFN RSWLRQV DQG VWRFN DSSUHFLDWLRQ ULJKWV ³6$56´ UHVWULFWHG DQG XQUHVWULFWHG VWRFN VWRFN XQLWV SHUIRUPDQFH DQG market-based stock awards, and cash awards. In accordance with the 2014 Stock Plan, the issuance of one share of common stock in the form of an option or SAR will reduce the share pool by one share, whereas the issuance of one share of common stock for the other types of stock awards provided by the plan will reduce the pool by 3.8 shares. As of December 31, 2018, there were 4,343,301 shares available for grants under the 2014 Stock Plan. $GGLWLRQDOO\ RQ 0D\ VKDUHKROGHUV DSSURYHG 7KH +DQRYHU ,QVXUDQFH *URXS (PSOR\HH 6WRFN 3XUFKDVH 3ODQ WKH ³(633 3ODQ´ DQG WKH &KDXFHU 6KDUH ,QFHQWLYH 3ODQ WKH ³6,3 3ODQ´ DXWKRUL]LQJ W he issuance of 2,500,000 and 750,000 shares, respectively, under such plans. As of December 31, 2018, 2,371,060 shares were available for grant under the ESPP Plan. As a result of the sale of the Chaucer business in 2018, new grants of stock to the SIP Plan were terminated and the SIP Plan was transferred as part of the sale on December 28, 2018. Total shares awarded under this SIP Plan since 2014 were 74,189. Compensation cost, excluding the discontinued operations related to the Chaucer business, for the years ended December 31, 2018, 2017, and 2016 totaled $14.9 million, $10.5 million and $10.5 million, respectively. Related tax benefits were $3.1 million, $3.7 million and $3.7 million, respectively. Compensation cost attributable to the Chaucer business, net of taxes, for the years ended December 31, 2017 and 2016 totaled $1.2 million and $1.0 million, respectively, and were reflected in discontinued operations. 114 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT