THG 2018 Annual Report

PART II ITEM 5 ±0$5.(7 )25 5(*,675$17¶6 &20021 (48,7< 5(/$7(' 672&.+2/'(5 0$77(56 $1' ,668(5 PURCHASES OF EQUITY SECURITIES COMMON STOCK AND STOCKHOLDER OWNERSHIP 2XU FRPPRQ VWRFN LV WUDGHG RQ WKH 1HZ <RUN 6WRFN ([FKDQJH XQGHU WKH V\PERO ³7+*´ 2Q )HEUXDU\ ZH KDG DSSUR[LPDWHO\ 16,781 shareholders of record and 40,573,500 shares of common stock outstanding. On the same date, the trading price of our common stock was $117.63 per share. DIVIDENDS On December 30, 2018, the Board of Directors declared a special dividend of $4.75 per outstanding share following completion of the sale of the Chaucer business. See Note 2 ± ³'LVSRVLWLRQV RI %XVLQHVVHV´ LQ WKH 1RWH s to Consolidated Financial Statements. We currently expect that quarterly cash dividends, comparable to what we have paid in the past of $0.54 per share in the first three quarters of 2018 and $0.60 per share in the fourth quarter of 2018, will continue to be paid in the future; however, the payment of future quarterly or special dividends on our common stock will be determined by the Board of Directors from time to time based upon cash available at our holding company, our results of operations and financial condition and such other factors as the Board of Directors considers relevant. Dividends to shareholders may be funded from dividends paid to us from our subsidiaries. Dividends from insurance subsidiaries are subject to restrictions imposed by state LQVXUDQFH ODZV DQG UHJXODWLRQV 6HH ³/LTXLGLW\ DQG &DSLWDO 5HVRXUFHV´ LQ 0DQDJHPHQW¶V Discussion and Analysis of Financial Condition and Note 13 ± ³'LYLGHQG 5HVWULFWLRQV´ LQ WKH 1RWHV WR &RQVROLGDWHG )LQDQFLDO Statements. ISSUER PURCHASES OF EQUITY SECURITIES In 2005, the Board of Directors first authorized a stock repurchase program which, including subsequent amendments to increase the number of shares subject to repurchase, provided for aggregate repurchases of up to $900 million. This program was terminated on December 30, 2018 in conjunction with the establishment of the new program discussed below. Prior to termination, total repurchases under this program were 14.9 million shares at a cost of $811.2 million. The prior share repurchase authorization had a balance of approximately $89 million when terminated. On December 30, 2018, the Board of Directors authorized a new stock repurchase program which provides for aggregate repurchases of up to $600 million. Under the new repurchase authorization, we may repurchase our common stock from time to time, in amounts, at prices, and at times we deem appropriate, subject to market conditions and other considerations. Our repurchases may be executed using open market purchases, privately negotiated transactions, accelerated repurchase programs or other transactions. We are not required to purchase any specific number of shares or to make purchases by any certain date under this program. On January 2, 2019, pursuant to the terms of an accelerated share repurchase agreement, we paid $250.0 million and received an initial delivery of approximately 1.8 million shares of our common stock, which is approximately 80% of the total number of shares expected to be repurchased under this agreement. 34 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT