Bank of America Merrill Lynch Insurance Conference. The Hanover Insurance Group (THG) February 12, 2015

Transcription

1 Bank of America Merrill Lynch Insurance Conference The Hanover Insurance Group (THG) February 12,

2 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements: Certain statements in this presentation, including responses to questions, contain or may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of Use of the words believes, anticipates, expects, projections, forecasts, outlook, should, plan, confident, guidance, on track or target to, promise, line of sight, will, on the right path to and similar expressions are intended to identify forward-looking statements. In particular, this presentation and related earnings call includes or may include forward-looking statements with respect to the ability to continue to improve our underwriting profitability and financial performance; underlying loss ratio trends; outlook for 2015; outlook on the market and economic conditions; Personal and Commercial Lines profitability improvement, including with respect to auto lines; growth momentum, particularly in Personal Lines where new business and retention trends due to the traction established through the launch of the Platinum product and the product s potential to lead to better account persistency and margin enhancement; the pricing environment, price adequacy, and the company s ability to increase rates in domestic P&C, in Lloyd s businesses and in accounts designated as small, middle or large; the ability to achieve our ultimate goals, including our ability to delivery on ROE, combined ratio and growth targets; the impact of foreign exchange fluctuations; competitive position and meaningful growth, including with respect to agents; net premiums written growth and retention (including the impact of exposure management, profitability improvement and rate actions); new business growth; future prior year reserve development and reserve adequacy; the impact of various agency and exposure management actions on net written premiums, operating income, combined ratio, ROE and catastrophe losses and exposure in certain geographic areas; GAAP and accident year loss and combined ratios; expense ratio and expense improvements; the ability to improve profitability, earnings growth and returns; adequacy of capital to rating agency expectations; product margins and margin improvement, including with respect to auto and specialty lines of business; expected combined ratio and growth of Chaucer Holdings plc ( Chaucer ); the ability to manage market headwinds related to Chaucer s business; net investment income, the effect of lower yields on future net investment income in 2015 and changes to the overall investment strategy to offset pressure from the interest rate environment; product- geographic- and account- based mix changes on future growth, margin improvement and target returns; and may also include forward looking statements on underwriting conditions, capital levels, ratings, and future share repurchases and the number of shares outstanding. Specifically, comments regarding operating earnings expectations for 2015, including overall combined ratio, net investment income growth and written premiums growth, and reserve adequacy are forward-looking statements. The company cautions investors that neither historical results and trends nor forward-looking statements are guarantees of or necessarily indicate future performance, and actual results could differ materially. Investors are directed to consider the risks and uncertainties in our business that may affect future performance and that are discussed in readily available documents, including the company s earnings press release dated February 4, 2015 and the Annual Report, Form 10-Q and other documents filed by The Hanover with the Securities and Exchange Commission, which are available at under About Us - Investors. We assume no obligation to update this presentation, which, unless otherwise noted, speaks as of December 31, These uncertainties include the uncertain U.S. and global economic environment, the possibility of adverse catastrophe experience (including terrorism) and severe weather, the uncertainties in estimating catastrophe and non-catastrophe weather-related losses, the uncertainties in estimating property and casualty losses, accident year picks, and incurred, but not reported loss and LAE reserves, the ability to increase or maintain certain property and casualty insurance rates in excess of loss trends, the impact of new product introductions, adverse loss and LAE development for prior years, changes in frequency and loss trends, the ability to improve renewal rates and increase new property and casualty policy counts, adverse selection in underwriting activities, investment impairments and returns, the impact of competition (including rate pressure), adverse and evolving state, federal and, with respect to Chaucer, international, legislation or regulation, adverse regulatory or litigation actions, financial ratings actions, and those risks inherent in Chaucer s business. Non-GAAP Measures: The discussion in this presentation of The Hanover s financial performance includes reference to certain financial measures that are not derived from generally accepted accounting principles, or GAAP, such as operating income, operating income before taxes, combined ratios and loss ratios, excluding catastrophes and/or development and accident year loss ratios, excluding catastrophes and book value per share excluding net unrealized gains and losses. A reconciliation of non-gaap measures to the closest GAAP measure is included in either the press release dated February 4, 2015 or financial supplement, which are posted on our website. The reconciliation of accident year loss ratio and combined ratio excluding catastrophes to the nearest GAAP measure, total loss ratio and combined ratio, is found on pages 7, 10, 13 and 16 of the financial supplement. Operating income (operating income per diluted share) is a non-gaap measure. It is defined as net income excluding the after-tax impact of net realized investment gains (losses), as well as results from discontinued operations divided by, in the case of per share reported figures, the average number of diluted shares of common stock. Book value per share, excluding net unrealized gains and losses, is calculated as total shareholders equity excluding the after-tax effect of unrealized investment gains and losses, divided by the number of common shares outstanding. The definition of other financial measures and terms can be found in the 2013 Annual Report on pages

3 THG Company Information Exchange/Ticker NYSE: THG Share price (at 2/5/15) $73.35 Shares outstanding* Market capitalization 43.9 million $3.2 billion Annual dividend per share $1.64 Yield: 2.3% GAAP Equity* Total Capital* $2.8 billion $3.7 billion Book value per share* $64.85 $5.5B 2014 Gross Premiums Written 28% 16% 28% Company Ratings A.M. Best Standard & Poor's Moody s 28% Financial Strength Ratings The Hanover Insurance Company A A A3 Debt Ratings Senior Debt bbb BBB Baa3 Subordinated Debentures bb+ BB+ Ba1 Personal Lines Domestic Specialty Domestic Commercial Lines International Specialty *As of December 31, 2014

4 We are a national company with global reach $1.5B Gross Premiums 800 Employees 8 International Offices $4.0B Gross Premiums 4,300 Employees 8 Business Centers; 41 Offices DOMESTIC One of the largest P&C writers in the U.S. Commercial and specialty business countrywide Personal Lines business primarily in states east of the Mississippi River INTERNATIONAL LLOYD S PLATFORM Chaucer (Synd and 1176) International operations through Lloyd s, headquartered in London Marine & Aviation, Casualty, Energy, Property, Nuclear and U.K. Motor Locations in Whitstable and Nottingham (U.K.), Copenhagen, Oslo, Singapore, Miami and New York

5 Key Messages We have built a strong, distinctive market position to succeed in today s evolving market and to achieve our financial goal of top-quartile ROE through the cycle Our position creates multiple growth and profitability levers that should drive strong and improving returns and profitable growth in 2015: - Broad and distinctive product set in attractive segments of the business - Unique distributed operating model with strong underwriting expertise well-aligned with distribution partners - Extensive market information and deep insight into business opportunities These advantages are embedded in each of our businesses, positioning us for strong success: - PL account focus drives strong retention and improved business mix - Business insurance and specialty pricing persistency, specialization and unique operating model targeted at more attractive segments - Chaucer leadership market position and culture of execution Our progress over the last several years serves as evidence that our strategy and the investments we have made in our business are paying off, but significant headroom remains

6 We remain focused on building A World Class Company Deep Partnerships with Winning Agents and Brokers Our VISION World Class Property and Casualty Company World Class Product and Underwriting Capability Strong Financial Position World Class People Strong Culture of Execution Responsive Service Delivery via Cost Effective Operating Model Our Strategic Focus A more differentiated product portfolio in more attractive areas of the industry A more distinctive market position in our businesses with strong underwriting acumen and risk management expertise A value proposition that creates a strong, differentiated position with winning agents and brokers The financial flexibility and strength to capture opportunities Our Goal: To Deliver Top Quartile Returns Through the Cycle 6

7 THG Investor Value Proposition Earnings Stability Through Diversified Portfolio Margin Expansion Growth Above Industry Average Increased Shareholder Value Geographic diversification Macro level Micro level Balanced diversified portfolio Property/casualty Business portfolio Substantially improved business mix Expense leverage through growth and business maturity Strong business and pricing persistency in domestic lines Leverage Chaucer s market leadership and expertise in Lloyd s Market Agency and broker penetration; product and geography Continuing product development and extensions Development of new geographies We have a strong market position and multiple earnings improvement levers to drive top quartile returns

8 We made dramatic changes to strongly position us for the current environment and the future Agency & Beyond REPAIR AND IMPROVE CORE CAPABILITIES AND POSITION Rating Upgrades CREATE MORE DISTINCTIVE PORTFOLIO AND POSITION WITH AGENTS S&P Upgrade to A BUILD EARNINGS POWER, LEVERAGE PORTFOLIO AND POSITION FOR GROWTH Focused portfolio Returned core products to profitability Upgraded talent and core systems Invested in Core Commercial Built Personal Lines product Established national distribution and operating model Created robust U.S. Specialty portfolio Established international presence through Chaucer Growth in industry solutions Built distinctive account approach for Personal Lines Leverage investments and drive improved margins Deploy tools to shift share and solidify position in target markets Capitalize on market disruption Grow preferred shelf space with Partner Agents We have completely transformed our organization to compete with the best in the industry

9 The success of our organizational shift is evident in our results Measure 2004 (1) Revenue $2.5B $3.2B $5.1B Net Premiums Written $2.2B $3.0B $4.8B Business Mix Big 4 States 71% 49% 33% Total Capital $2.8B $3.0B $3.7B Book Value per Share $43.91 $54.23 $64.85 Pre-tax Operating Income, ex-cat (2) $268M $383M $629M 30% 4% 20% 26% 29% Business Mix % % 32% 16% 29% Personal Lines Core Commercial U.S. Specialty International Specialty (1) Footnotes are used throughout this presentation. See the slide called Footnotes at the end of this presentation for more information.

10 Our partner strategy gives us a distinct advantage The Power of The Promise Direct access to broad product set relevant to agents target markets The Best Partner Because: I. Intense Focus on Product Innovation (Industry Solutions) II. True Commitment to Partnership (Franchise Value) III. Unparalleled Local Responsiveness and Expertise Real franchise value because of limited appointments; match with skills Distributed expertise and tailored solutions and tools aligned with agents to quickly respond to opportunities locally and nationally Products, operating model geared and tools geared to improve agency economics allowing us to perform well in the current environment

11 Share shift with the best agents will drive our success going forward Agency Segment Penetration Mid-Sized Local Agents Regional Agencies Top 200 Top 10 Net Premiums Written $2.5B $4.8B Shelf space built: Small $4.2 billion Agents with Small Mid-Sized top 1,000 Agents Local Agents Hanover agents Regional Agencies Top 200 Top Coverage strong: 2,200 target agents with 2,800 planning locations $120+ billion premium

12 Geographic diversification coupled with exposure management initiatives leads to earnings resiliency Direct Premiums Written $5.5B in 2014 Diversified domestic operations 13% in the West and Pacific regions West & Pacific $800M Southeast $600M Exposure management initiatives non-renewed $400M premium in Midwest $1.3B Chaucer (Global) $1.5B Business mix; casualty/property balance provides strong diversification Northeast $1.3B Chaucer provides additional diversification of earnings

13 Unique approach and capabilities in every business make us more resilient to the current market environment U.S. Personal Lines 29% Business Profile U.S. Commercial Lines 29% Distinctive offerings for attractive account, valueadded segment Growing business and diversifying geographically Hanover Platinum launch provides a unique offering for target account segment, writing quality new business with strong pricing and retention International Specialty 26% 18% 11% 14% $4.8B 2014 Net Premiums Written 26% 16% 15% Small Commercial Small accounts lead to better pricing persistency Distinctive operating model Intense knowledge of and planning with partner agents creates aligned incentives for economic growth Middle Market Leader in industry solutions for Middle Market ($50-$500K) Franchise value driving significant share shift Portfolio of balanced specialty business with distinctive position Leveraging market leadership and expertise Strong performance track record Small Commercial Middle Market U.S. Specialty International Specialty Auto Homeowners U.S. Specialty 16% Strong and growing portfolio of attractive specialty lines A leader in providing specialty direct to retail agents more pricing persistency

14 U.S. Business Insurance Driving profitable growth ($ in millions) Well positioned to outperform in the current market environment Broad product set Local presence and local underwriting with 31 offices $50-500K sweet spot Average Account Size - ~$61K Middle $693 50% $1, Net Premiums Written Small $686 50% $0-50K in penetrated geographies Average Account Size - ~$6K Increased segmentation by industry type Small Commercial = Less pricing sensitivity and better retention due to smaller account size Middle Market = Distinctive industry specialization and franchise value driving significant share shift Retention 90% 85% 80% 75% 70% Core Commercial Lines 9% 8% 8% 7% 7% 4% Pricing 10% 7% 8% 6% 4% 65% 60% 1% 2% 0% Premium Retention Pricing Segmented business model with a national footprint

15 U.S. Specialty Building market-leading specialty businesses to enhance value of franchise Our Specialty business is an important driver of growth, earnings and capital diversification Our capabilities focus on some of the most attractive and highly fragmented segments of the insurance market 7% 11% 9% 4% 2% ~$780M 2014 Net Premiums Written 31% Experienced leaders continue to develop market-leading products and operating platforms that reach specialist agents With robust growth, newer businesses are reaching scale 9% AIX Program Business Surety Hanover Specialty Industry Healthcare 27% Marine Professional Liability Management Liability E&S Maturing Specialty portfolio improved margins in

16 U.S. Personal Lines Delivering distinctive account-oriented solutions for superior financial performance Our strategy positions us to drive improved returns by: Maintaining our account-focused strategy, which drives higher retention of desirable business Continuing to write new business through value-added Platinum product, which attracts customers that are less price sensitive With exposure management actions now complete, we expect continued growth momentum, primarily driven by new business writings in our Platinum product Personal Lines Account Business % of Total PIF 78% 80% 75% 70% 65% 60% 55% 50% Retention 85% Personal Lines Applied Rate 10% 3% 80% 8% 8% 8% 35% $1.4B 2014 Net Premiums Written 62% 75% 70% 65% 7% 5% 7% 6% 6% 5% 6% 4% 2% Auto Home Other 60% Q1'2014 Q2'2014 Q3'2014 Q4'2014 PIF Retention Exposure Management Impact Applied Rate 0% Building a strong business, targeting customers who favor value

17 Lead position in the Lloyd s market gives competitive advantage in the current market environment Aim to be a Lloyd s market leader in selected specialty segments, with strong and distinctive underwriting capabilities Outperform Lloyd s competitors We also continue to broaden the breadth and depth of our underwriting expertise to strengthen our influence with brokers and clients Can offer cross class cover, an important differentiator Chaucer Specialty Lead business* (By premium volume) Property (Direct/Fac) 61% Casualty 55% Political Risk 48% Energy 42% Marine 22% *London or Lloyd s lead in 2014 ($ in millions) $200.0 $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $- 25% UK Motor Property Energy $1.5B 2014 Gross Premiums Written Pre-tax Operating Income $32.9 (3) 17% $ % 21% $ % $ Casualty & Other Marine & Aviation Leveraging expertise and industry-leading positions in marine, energy, and casualty

18 Above-industry growth and quality underwriting drives increased earnings power 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% Cumulative Growth in Net Premiums Written Pre-tax Operating Income, Ex-Cat (2) Renewal Rights Chaucer Acquisition Hanover Nationals Regionals Specialty ($ in millions) $700 $600 $500 $400 $300 $200 $100 $- $383 $433 $445 $533 Accident-Year Combined Ratio, Ex-Cat (4) $ Source: SNL Note: The following set of peers is used throughout this presentation: Nationals: TRV, HIG, CNA, CB, ALL, ACE; Regionals: CINF, STFC, UFCS, SIGI, KMPR (only ); Specialty: NAVG, WRB, OB, MKL, HCC, AWH, ORI 98.6% 97.6% 96.1% 95.3% 94.3% Our strategic and targeted growth of mature business will drive earnings accretion going forward

19 2013 and 2014 marked by strong progress Loss Ratio, Ex-Catastrophes (5) Commercial 63.8% 60.4% 58.9% Personal 67.3% 64.2% 62.0% Chaucer 48.1% 48.5% 49.5% 4.0 points of ex-cat loss ratio improvement in 2 years ~$160 million increase in domestic ex-cat loss margin for the same period Total 61.5% 58.9% 57.5% More earnings improvement embedded in 2015 and beyond

20 We have a high quality, well-diversified, and laddered investment portfolio Asset Allocation (% assets) 3.4% Fixed Income Securities Maturity Profile 13.2% 14.5% 6.7% $8.6B As of December 31, % 20% 5% $7.4B As of December 31, % 17.2% 26% 26% Corporate Asset-backed Cash, Gov't & Short-Term Municipal Equity Other 0-2 Years 2-4 Years 4-6 Years 6-8 Years Years 86% of the $8.6 billion portfolio is invested in fixed maturities; 4% in cash and equivalents 94% of fixed income securities are investment grade Weighted average quality A+ and duration of 4.2 years Strong persistency of yield; Q4 14 fixed income yield at 3.65%

21 Proven strong and flexible capital position recently recognized by an S&P upgrade to A Book Value Per Share ($ in billions) Total Capital $70 $60 $50 $40 $30 $54.23 $55.67 $58.59 $59.43 $64.85 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $3.0 $3.4 $3.4 $3.5 $3.7 $20 $1.0 $10 $0.5 $- $ (6) (6) BVPS, Ex-Unrealized* Unrealized* Equity Hybrid Capital Debt Capital above target levels for all rating agencies Financial leverage of 24% well within industry and rating agency thresholds Significant holding company liquidity: $121 million in cash and invested assets as of December 31, 2014 No debt maturities until 2020 $200 million available credit facility $200 million of subsidiary dividend capacity Participation at Lloyd s provides additional capital flexibility and efficiency * Unrealized investment gains and losses

22 We have a strong track record of creating value for shareholders Demonstrated ability to return capital to shareholders through dividends and share repurchases: Annual dividend increased each year since 2005 Flexible and opportunistic approach towards share repurchases - $117 million remaining on share repurchase authorization Since 2005, returned more than $1 billion to shareholders: - $390 million in dividends; $683 million in repurchases - In total, represents 67% of January 2005 market capitalization 250% 200% 150% 100% 50% 0% Price Performance Compared to Peers (8/18/03-1/26/2015) -50% THG-US Peer Avg S&P % 106% 101% Capital Returned to Shareholders Annual Dividends Per Share $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $- $182 $138 $135 $73 $75 $78 $87 $20 $22 $20 $47 $51 $55 $60 $ Dividends Share Repurchases $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $- $1.64 $1.52 $1.36 $1.13 $1.23 $ F

23 Investment Thesis Building a world-class company that can deliver top-quartile returns Greater earnings stability achieved through business mix, geographic diversification and business stability Utilize levers to achieve earnings accretion through underwriting margin and profitable growth Well-positioned within the market and have the tools in place to execute on the vision to become a world-class company: Broad and relevant product set Distinctive distribution strategy reaching the best agents Operating model aligned with distribution partners Strong talent and underwriting expertise We have confidence in our ability to achieve top-quartile financial returns

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25 U.S. Agency Market Overview $300B U.S. Independent Agent Channel Premium 26% 30% Segment Agency Segmentation # of Agents in U.S. Percentage of Agency Premium 1. Top 3 Brokers 3 20% 1a. Top 4 10 Brokers 7 20% 18% 35,000 Independent Agents 26% 2. Top 200 (>$100M in premium) 3. Regional Agents ($25-$100M in premium) 4. Mid-sized Local Agents ($5-$25M in premium) % 1,500 15% 7,000 20% 5. Small Agents (below $5M in premium) 26,000 5% Small Commercial Personal Lines Middle Market Large Commercial 5a. Specialty 5b. Community Based 5c. Flow Oriented Total 35, %

26 We have established strong agency reach, but with franchise value Segment # of Agents in U.S. Percentage of Agency Premium 1. Top 3 Brokers 3 20% 1a. Top 4 10 Brokers 7 20% 2. Top 200 (>$100M in premium) 3. Regional Agents ($25-$100M in premium) 4. Mid-sized Local Agents ($5-$25M in premium) Agency Segmentation % 1,500 15% 7,000 20% Hanover Focus Number of Target Agents Targeted ,000 Hanover Market Coverage (through existing agents) 24% $120 billion 2,200 agents 2,800 locations 27% 25% 24% 5. Small Agents (below $5M in premium) 5a. Specialty 5b. Community Based 5c. Flow Oriented 26,000 5% 550 Personal Lines Middle Market Small Commercial Large Commercial Total 35, % 2,200

27 Total loss and LAE ratio 63.1% 62.4% 74.5% 69.6% 68.8% 76.5% 51.9% 51.8% 52.4% 62.2% 62.0% 70.2% Reconciliations ($ In Millions) Reconciliation of Pre-Tax Operating Income Excluding Catastrophes to Income From Continuing Operations. 12/31/ /31/ /31/ /31/ /31/ /31/2004 Pre-Tax Contribution (excluding catastrophes)* $ $ $ $ $ $ Catastrophes Losses and LAE (223.0) (140.0) (369.9) (361.6) (160.3) (99.3) Property and Casualty Operating Income Interest Expense (65.2) (65.3) (61.9) (55.0) (44.3) (39.9) Operating income before income taxes Income tax benefit (expense) on operating income (loss) (108.3) (100.9) 1.9 (2.6) (59.3) (20.2) Operating income after income taxes Net realized investment gains Loss from retirement of debt (0.1) (27.7) (5.1) (2.3) (2.0) - Loss on real estate - (4.7) Net costs related to acquired businesses (1.2) (0.1) (2.6) (16.4) - - Loss from Pension Settlement (12.1) Net foreign exchange gains (loss) (0.4) Loss on derivative instruments (11.3) - - Restructuring costs (3.2) Income tax benefit (expense) on non-operating income (loss) (6.0) Income from continuing operations $ $ $ 46.1 $ 31.5 $ $ Combined Ratio Reconciliation Loss and LAE Ratio 62.2% 62.0% 70.2% 70.8% 65.3% 69.2% Expense Ratio 34.7% 34.7% 34.2% 33.9% 35.0% 32.3% Combined ratio 96.9% 96.7% 104.4% 104.7% 100.3% 101.5% Catastrophes losses 4.7% 3.1% 8.7% 10.0% 5.6% 4.4% Prior-year favorable reserve development (2.1)% (1.7)% (0.4)% (2.9)% (3.9)% (0.6)% Combined ratio excluding catastrophes 92.2% 93.6% 95.7% 94.7% 94.7% 97.1% Current accident-year combined ratio, excluding catastrophes 94.3% 95.3% 96.1% 97.6% 98.6% 97.7% Loss and LAE ratio, excluding catastrophes 57.5% 58.9% 61.5% 60.8% 59.7% 64.8% Current accident-year loss and LAE ratio, excluding catastrophes 59.6% 60.6% 61.9% 63.7% 63.6% 65.4% Reconciliation of Loss Ratio, Excluding Catastrophes, to Total Loss Ratio by Line of Business: Commercial Lines Personal Lines Chaucer Total FY 2014 FY 2013 FY 2012 FY 2014 FY 2013 FY 2012 FY 2014 FY 2013 FY 2012 FY 2014 FY 2013 FY 2012 Loss and LAE ratio: Current accident year, excluding catastrophe losses 58.5% 60.2% 62.2% 62.4% 63.3% 65.5% 58.1% 57.6% 55.6% 59.6% 60.6% 61.9% Prior year unfavorable (favorable) reserve development 0.4% 0.2% 1.6% (0.4%) 0.9% 1.8% (8.6%) (9.1%) (7.5%) (2.1%) (1.7%) (0.4%) Catastrophe losses 4.2% 2.0% 10.7% 7.6% 4.6% 9.2% 2.4% 3.3% 4.3% 4.7% 3.1% 8.7%

28 Footnotes (1) Excludes Life business in (2) Pre-tax operating income, excluding catastrophe losses, is a non-gaap measure. The reconciliation to the closest GAAP measure, income from continuing operations, can be found on the page called Reconciliations within this document. (3) 2011 operating income for Chaucer includes income from July 1, 2011, the date of acquisition, thru December 31, (4) Accident year combined ratio, excluding catastrophes, is a non GAAP measure. The closest GAAP measure is combined ratio. The reconciliation of accident year combined ratio, excluding catastrophes, to the nearest GAAP measure, total combined ratio, can be found on the page called Reconciliations within this document. (5) Loss ratio, excluding catastrophes, is a non-gaap measure. The closest GAAP measure is loss ratio. Reconciliation of loss ratio, excluding catastrophes, to the nearest GAAP measure, loss ratio, can be found on the page called Reconciliations within this document. (6) Includes Chaucer results since the acquisition on July 1, 2011.