THG 2018 Annual Report

D. EQUITY SECURITIES Equity securities are carried at fair value. Effective January 1, 2018, increases or decreases in the fair value of equity securities are reported in net realized and unrealized investment gains (losses) in the Consolidated Statements of Income. Previously, equity securities were categorized as available-for- VDOH DQG XQUHDOL]HG JDLQV DQG ORVVHV ZHUH UHSRUWHG LQ $2&, D VHSDUDWH FRPSRQHQW RI VKDUHKROGHUV¶ equity. On January 1, 2018, the Company recorded a cumulative effect adjustment which included the reclassification of net unrealized gains on equity securities of $142.5 million, pre-tax, from AOCI to retained earnings. As of December 31, 2017, the Company held equity securities with a fair value of $576.2 million and a cost of $433.7 million. E. OTHER INVESTMENTS 7KH &RPSDQ\¶V PRUWJDJH SDUWLFLSDWLRQV DQG RWKHU PRUWJDJH ORDQV ZHUH PLOOLRQ DQG PLOOLRQ DW 'HFHPEHU DQ d 2017, respectively. Participating interests in commercial mortgage loans are originated and serviced by a third-party. For these investments, the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgages. Mortgage participations and other mortgage loans were comprised of the following property types and geographic locations. DECEMBER 31 2018 2017 (in millions) Property Type: Office $ 141.1 $ 134.6 Apartments 85.5 64.9 Retail 66.9 64.1 Hotel 62.7 58.1 Industrial 50.6 45.0 Valuation allowance (1.1) (0.9) Total $ 405.7 $ 365.8 DECEMBER 31 2018 2017 (in millions) Pacific $ 92.5 $ 87.6 South Atlantic 82.1 76.9 West South Central 65.9 66.1 Mid-Atlantic 53.4 53.4 New England 35.3 28.8 East North Central 27.9 16.5 Mountain 12.5 5.0 Other 37.2 32.4 Valuation allowance (1.1) (0.9) Total $ 405.7 $ 365.8 At December 31, 2018, scheduled maturities of mortgage participations and other mortgage loans were as follows: due in 2020 - $10.0 million; in 2021 - $57.4 million; 2022 - $28.1 million; 2023 - $17.0 million and thereafter - $293.2 million. There were no scheduled loan maturities in 2019. Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties and loans may be refinanced. During 2018, the Company did not refinance any loans based on terms that differed from current market rates. Other investments also include interests in limited partnerships of $235.7 million and $186.4 million at December 31, 2018 and December 31, 2017, respectively. F. OTHER At December 31, DQG WKH &RPSDQ\¶V H[SRVXUH WR FRQFHQWUDWLRQ RI LQYHVWPHQWV LQ D VLQJOH LQYHVWHH WKDW H[FHHGHG RI VKDUHKROGHUV¶ HTXLW\ LQFOXGHG VHFXULWLHV RI D 8 6 JRYHUQPHQW -sponsored agency, as well as mortgage participations with a highly rated single third party with a carry value of $396.7 million and $356.8 million, respectively. At December 31, 2018, there were contractual investment commitments of up to $162.9 million. 94 THE HANOVER INSURANCE GROUP | 2018 ANNUAL REPORT