THG FY 2007 Earnings Report — The Hanover Insurance Group, Inc. Revenue & Financial Results | Market Cap Arena

The Hanover Insurance Group, Inc.THG

FY 2007 Earnings

Reported February 27, 2008

Quarter Comparison

Revenue

Operating Income

Gross Margin

Net Margin

EPS (Diluted)

Free Cash Flow

Metric	FY 2007	Prior Q	FY 2006	QoQ Change	YoY Change
Revenue	$2.7B	—	$2.6B	—	1.2%
Op. Income	$342M	—	$279M	—	22.2%
Gross Margin	25.9%	—	26.2%	—	-0.3pp
Net Margin	9.5%	—	6.4%	—	3.0pp
EPS (Diluted)	$4.83	—	$3.27	—	47.7%
Free Cash Flow	$64M	—	$33M	—	93.3%

Revenue Flow

Item	Amount
REVENUE	$2.7B
Cost of Revenue	$2.0B
GROSS PROFIT	$693M
R&D Expenses	$0
Selling & Marketing	$0
General & Administrative	$0
SG&A Expenses	$0
Other Expenses	$352M
Operating Expenses	$352M
Cost & Expenses	$2.3B
OPERATING INCOME	$342M
Interest Income	$0
Interest Expense	$41M
Other Income/Expenses	$0
INCOME BEFORE TAX	$342M
Income Tax Expense	$113M
Net Income from Continuing Ops	$228M
Net Income from Discontinued Ops	$25M
Other Adjustments	$0
NET INCOME	$253M
Net Income Deductions	$0
BOTTOM LINE NET INCOME	$253M
D&A	$19M
EBIT	$389M
EBITDA	$408M
EPS	$5
EPS Diluted	$5

Income Statement

Item	Amount
REVENUE	$2.7B
Cost of Revenue	$2.0B
GROSS PROFIT	$693M
R&D Expenses	$0
Selling & Marketing	$0
General & Administrative	$0
SG&A Expenses	$0
Other Expenses	$352M
Operating Expenses	$352M
Cost & Expenses	$2.3B
OPERATING INCOME	$342M
Interest Income	$0
Interest Expense	$41M
Other Income/Expenses	$0
INCOME BEFORE TAX	$342M
Income Tax Expense	$113M
Net Income from Continuing Ops	$228M
Net Income from Discontinued Ops	$25M
Other Adjustments	$0
NET INCOME	$253M
Net Income Deductions	$0
BOTTOM LINE NET INCOME	$253M
D&A	$19M
EBIT	$389M
EBITDA	$408M
EPS	$5
EPS Diluted	$5

Cash Flow Statement

Item	Amount
Net Income	$253M
Depreciation & Amortization	$19M
Stock-Based Compensation	$16M
Deferred Income Tax	$88M
Other Non-Cash Items	-$10M
Change in Working Capital	-$292M
OPERATING CASH FLOW	$73M
Capital Expenditure	-$10M
Acquisitions (Net)	-$4M
Purchases of Investments	-$1.3B
Sales/Maturities of Investments	$1.2B
Other Investing Activities	-$481M
NET CASH FROM INVESTING	-$72M
Net Debt Issuance	-$101M
Common Stock Repurchased	-$2M
Common Dividends Paid	-$21M
Other Financing Activities	$25M
NET CASH FROM FINANCING	-$98M
FREE CASH FLOW	$64M
Net Change in Cash	-$97M

Balance Sheet

Item	Amount
Cash & Equivalents	$275M
Short-Term Investments	$0
Net Receivables	$627M
Inventory	$0
Other Current Assets	-$837M
TOTAL CURRENT ASSETS	$0
PP&E (Net)	$0
Goodwill	$126M
Intangible Assets	$126M
Long-Term Investments	$4.6B
Tax Assets	$0
Other Non-Current Assets	-$4.8B
TOTAL NON-CURRENT ASSETS	$0
TOTAL ASSETS	$9.8B
Account Payables	$45M
Short-Term Debt	$0
Deferred Revenue	$0
Other Current Liabilities	$3.3B
TOTAL CURRENT LIABILITIES	$4.0B
Long-Term Debt	$512M
Deferred Revenue NC	$0
Deferred Tax Liabilities	$0
Other Non-Current Liabilities	$6.3B
TOTAL NON-CURRENT LIABILITIES	$6.8B
TOTAL LIABILITIES	$7.5B
Common Stock	$600.0K
Additional Paid-In Capital	$1.8B
Retained Earnings	$947M
Treasury Stock	-$451M
Accum. Other Comp. Income	-$20M
Other Equity	$0
TOTAL STOCKHOLDERS' EQUITY	$2.3B
Minority Interest	$0
TOTAL EQUITY	$2.3B
TOTAL LIABILITIES & EQUITY	$9.8B
Total Debt	$512M
Net Debt	$237M