THG 2018 Annual Report

THE HANOVER INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31 2018 2017 (in millions, except share data) Investments: Fixed maturities, at fair value (amortized cost of $6,245.9 and $5,657.1) $ 6,161.5 $ 5,749.3 Equity securities, at fair value 464.4 576.2 Other investments 661.5 562.7 Total investments 7,287.4 6,888.2 Cash and cash equivalents 1,020.7 297.9 Accrued investment income 53.2 48.2 Premiums and accounts receivable, net 1,176.7 1,095.7 Reinsurance recoverable on paid and unpaid losses and unearned premiums 1,648.6 1,625.5 Deferred acquisition costs 450.8 430.0 Deferred income taxes 50.6 17.0 Goodwill 178.8 178.8 Other assets 371.6 333.7 Assets held-for-sale 57.4 4,466.6 Assets of discontinued life businesses 103.9 88.0 Total assets $ 12,399.7 $ 15,469.6 Liabilities Loss and loss adjustment expense reserves $ 5,304.1 $ 5,058.5 Unearned premiums 2,277.8 2,131.7 Expenses and taxes payable 909.8 620.7 Reinsurance premiums payable 37.3 51.5 Debt 777.9 786.9 Liabilities held-for-sale 22.2 3,707.2 Liabilities of discontinued life businesses 115.9 115.4 Total liabilities 9,445.0 12,471.9 Commitments and contingencies 6KDUHKROGHUV¶ (TXLW\ Preferred stock, par value $0.01 per share; 20.0 million shares authorized; none issued ² ² Common stock, par value $0.01 per share; 300.0 million shares authorized; 60.5 million shares issued 0.6 0.6 Additional paid-in capital 1,871.8 1,857.0 Accumulated other comprehensive income (loss) (116.5) 107.6 Retained earnings 2,182.3 1,975.0 Treasury stock at cost (18.2 and 18.0 million shares) (983.5) (942.5) 7RWDO VKDUHKROGHUV¶ HTXLW\ 2,954.7 2,997.7 Total liabilities DQG VKDUHKROGHUV¶ HTXLW\ $ 12,399.7 $ 15,469.6 The accompanying notes are an integral part of these consolidated financial statements. 78 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT