HANOVER INSURANCE GROUP INC

Taxes

We file a consolidated U.S. federal income tax return that includes our holding company and its domestic subsidiaries (including non-insurance operations).

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The provision for income taxes from continuing operations was an expense of $29.8 million compared to a benefit of $5.5 million for the three months ended March 31, 2024 and 2023, respectively. These amounts resulted in consolidated effective tax rates of 20.5% on pre-tax income and 31.4% on the pre-tax loss for the three months ended March 31, 2024 and 2023, respectively. These provisions include excess tax benefits related to stock-based compensation of $1.1 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively. In addition, these provisions reflect benefits related to tax planning strategies implemented in prior years of $0.4 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively. Absent these items, the provisions for income taxes would have been an expense of $31.3 million, or 21.5% and a benefit of $3.7 million, or 21.1%, for the three months ended March 31, 2024 and 2023, respectively.

The income tax provision on operating results was an expense of $29.3 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. These provisions resulted in effective tax rates for operating income of 20.8% and 2.1% for the three months ended March 31, 2024 and 2023, respectively. These provisions reflect the aforementioned excess tax benefits related to stock-based compensation of $1.1 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively. Absent this item, the provisions for income taxes would have been an expense of $30.4 million, or 21.5% and $1.1 million, or 23.4%, for the three months ended March 31, 2024 and 2023, respectively.