INN Blog

More Posts
 

HARTFORD LIFE INSURANCE CO FILES (8-K) Disclosing Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits

Edgar Online, Inc.
Item 2.01 Completion of Acquisition or Disposition of Assets
On January 1, 2013, Hartford Life, Inc., a Delaware corporation ("HLI")
completed its previously announced sale of (i) the assets of Hartford Life
Insurance Company (the "Company") relating to its retirement plans business
("Retirement Plans") to Massachusetts Mutual Life Insurance Company and (ii) all
of the issued and outstanding equity of Hartford Retirement Services, LLC,
Retirement Plans's recordkeeper, for a cash ceding commission of $355 million,
net of an adjustment at closing of $45 million as a result of net flows adjusted
for discontinuances and lapses in the retirement plans business from and
including January 1, 2012 through the closing of the transaction. The Company is
a wholly-owned subsidiary of HLI.
On January 2, 2013, HLI completed its previously announced sale of the Company's
assets relating to its individual life insurance business ("Individual Life") to
The Prudential Insurance Company of America, a subsidiary of Prudential
Financial, Inc., for cash consideration of $615 million, consisting primarily of
a ceding commission, of which $590 is attributable to the Company.
Pro forma financial information with respect to these transactions is provided
in Item 9.01 of this Current Report on Form 8-K.


Item 9.01 Financial Statements and Exhibits.
(b)   Pro Forma Financial Information

The attached unaudited Pro Forma Condensed Consolidated Statements of Operations
for the year ended December 31, 2011 and the nine-months ended September 30,
2012 and the unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 2012 (collectively, the "Unaudited Pro Forma Condensed
Consolidated Financial Statements") are based on the Company's historical
consolidated results of operations and financial position, adjusted to give
effect to the sale of the Company's Retirement Plans and Individual Life
businesses.
The unaudited Pro Forma Condensed Consolidated Statements of Operations for the
year ended December 31, 2011 and the nine-months ended September 30, 2012 have
been prepared to present the Company's results of operations as if the sale of
each of the Retirement Plans and Individual Life businesses had occurred on
January 1, 2011. The unaudited Pro Forma Condensed Consolidated Balance Sheet as
of September 30, 2012 has been prepared to present the Company's financial
condition as if the sale of the Retirement Plans and Individual Life Insurance
businesses had occurred on September 30, 2012.
The Unaudited Pro Forma Condensed Consolidated Financial Statements do not
purport to be indicative of the financial position or results of operations of
the Company as of the dates or for such periods, nor are they necessarily
indicative of future results. The Unaudited Pro Forma Condensed Consolidated
Financial Statements and the accompanying notes should be read together with the
Company's audited Consolidated Financial Statements and accompanying notes as of
and for the year ended December 31, 2011 included in the Company's Current
Report on Form 8-K dated December 28, 2012, and Management's Discussion and
Analysis included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2011, as well as the Company's unaudited Condensed Consolidated
Financial Statements filed with the Securities & Exchange Commission on Form
10-Q as of and for the nine-months ended September 30, 2012.
(d)   Exhibit
Exhibit No.                                 Description

99.1 Unaudited Pro Forma Condensed Consolidated Statements of Operations of

Brand New FIA! Learn more.

Hartford Life Insurance Company and Subsidiaries for the year 

ended

December 31, 2011 and the nine-months ended September 30, 

2012 and the

              Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
              September 30, 2012





                                       2
--------------------------------------------------------------------------------
                                  Exhibit 99.1
                HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
            Pro Forma Condensed Consolidated Statement of Operations
                      For the year ended December 31, 2011

                                                                   Pro forma adjustments
                                                                            

Individual

(In millions, except for per share data)  As reported     Retirement Plans (1)         Life (1)       Pro forma
                                                                       (Unaudited)
Revenues
Fee income and other                     $     3,802     $             (373 )       $       (965 )   $    2,464
Earned premiums                                  234                     (7 )                107            334
Net investment income:
Securities available-for-sale and other        2,580                   (396 )               (420 )        1,764
Equity securities, trading (2)                   (14 )                                                      (14 )
Total net investment income                    2,566                   (396 )               (420 )        1,750
Net realized capital gains/losses                  1                     10                  (22 )          (11 )
Total revenues                                 6,603                   (766 )             (1,300 )        4,537
Benefits, losses and expenses
Benefits, losses and loss adjustment
expenses                                       3,107                   (308 )               (761 )        2,038
Benefits, losses and loss adjustment
expenses - returns credited on
international unit-linked bonds and
pension products (2)                             (14 )                                                      (14 )
Amortization of deferred policy
acquisition costs and present value of
future profits                                   474                    (84 )               (169 )          221
Insurance operating costs and other
expenses                                       3,048                   (423 )               (272 )        2,353
Dividends to policyholders                        17                                          (1 )           16
Total benefits, losses and expenses            6,632                   (815 )             (1,203 )        4,614
Loss from continuing operations before
income taxes                                     (29 )                   49                  (97 )          (77 )
Income tax expense/benefit                      (273 )                   52                  (12 )         (233 )
Net income                                       244                     (3 )                (85 )          156
Net income attributable to the
noncontrolling interest                            -                                                          -
Net income attributable to Hartford Life
Insurance Company                        $       244     $               (3 )       $        (85 )   $      156






    See Explanatory Notes to Pro Forma Condensed Consolidated Statements of
                                  Operations.


                                       3
--------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
            Pro Forma Condensed Consolidated Statement of Operations
                  For the nine months ended September 30, 2012

                                                                     Pro

forma adjustments

Brand New FIA! Learn more.

                                                                                        Individual

(In millions, except for per share data) As reported Retirement Plans (1) Life (1) Pro forma

(Unaudited)

Revenues

Fee income and other                       $     2,680     $             (276 )       $       (712 )   $    1,692
Earned premiums                                     69                     (5 )                 91            155
Net investment income:
Securities available-for-sale and other          1,927                   (312 )               (346 )        1,269
Equity securities, trading (2)                     156                                          (1 )          155
Total net investment income                      2,083                   (312 )               (347 )        1,424
Net realized capital gains/losses                 (705 )                    1                  (15 )         (719 )
Total revenues                                   4,127                   (592 )               (983 )        2,552
Benefits, losses and expenses
Benefits, losses and loss adjustment
expenses                                         2,198                   (251 )               (617 )        1,330
Benefits, losses and loss adjustment
expenses - returns credited on
international unit-linked bonds and
pension products (2)                               155                                                        155
Amortization of deferred policy
acquisition costs and present value of
future profits                                     262                    (31 )                (76 )          155
Insurance operating costs and other
expenses                                           782                   (323 )               (237 )          222
Dividends to policyholders                          15                                          (1 )           14
Total benefits, losses and expenses              3,412                   (605 )               (931 )        1,876
Income before income taxes                         715                     13                  (52 )          676
Income tax expense/benefit                         137                     22                   (9 )          150
Net income                                         578                     (9 )                (43 )          526
Net income attributable to the
noncontrolling interest                             (1 )                                                       (1 )
Net income attributable to Hartford Life
Insurance Company                          $       579     $               (9 )       $        (43 )   $      527





                                       4
--------------------------------------------------------------------------------

                Hartford Life Insurance Company and Subsidiaries
 Explanatory Notes to Pro Forma Condensed Consolidated Statements of Operations
             (Dollar amounts in millions, unless otherwise stated)
                                  (Unaudited)


(1) These pro forma adjustments reflect the elimination of revenues and
benefits, losses and expenses of the business sold assuming the transaction
occurred on January 1, 2011. See Explanatory Notes to Condensed Consolidated Pro
Forma Balance Sheet for information related to the form of the sale transaction
and the estimated gain on the sale transaction.

(2)       Includes investment income and mark-to-market effects of equity
          securities, trading, supporting the international variable annuity
          business, which are classified in net investment income with
          corresponding amounts credited to policyholders within benefits, losses
          and loss adjustment expenses.





                                       5
--------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
                 Pro Forma Condensed Consolidated Balance Sheet
                            As of September 30, 2012
                                                             Pro forma adjustments
(In millions, except for                      Retirement

share and per share data) As reported Plans Individual Life

Brand New FIA! Learn more.

  Total Impact  Note    Pro forma
                                                               (Unaudited)
Assets
Total investments           $      65,745      $(9,431)       $(7,650)        $(17,081)     (1)   $   48,664
Cash                                1,552        355             590             945        (7)        2,497
Premiums receivable and
agents' balances, net                  75                                                                 75
Reinsurance recoverables,
net                                 3,762       9,055           7,083           16,138      (2)       19,900
Deferred policy acquisition
costs and present value of
future profits                      3,094       (218)          (1,976)         (2,194)      (3)          900
Deferred income taxes, net          1,333        226             345       
     571        (4)        1,904
Goodwill                              470        (87)           (224)           (311)       (3)          159
Other assets                        1,361       (240)           (268)           (508)       (3)          853
Separate account assets           148,357                                                            148,357
Total assets                $     225,749       $(340)        $(2,100)         $(2,440)           $  223,309
Liabilities
Reserve for future policy
benefits and unpaid losses
and loss adjustment
expenses                    $      11,825                                                         $   11,825
Other policyholder funds
and benefits payable               42,021                                                             42,021
Other policyholder funds
and benefits payable -
international variable
annuities                           1,905                                                              1,905
Consumer notes                        190                                                                190
Other liabilities                  10,879       (131)          (1,979)         (2,110)    (3) (5)      8,769
Separate account
liabilities                       148,357                                                            148,357
Total liabilities                 215,177       (131)          (1,979)         (2,110)               213,067
Commitments and
Contingencies
Stockholders' Equity
Common stock, $0.01 par
value - 1,500,000,000
shares authorized,
469,746,638 and 469,750,171
shares issued                           6                                                                  6
Additional paid-in capital          8,279                                                              8,279
Retained earnings                     261        109             363             472        (7)          733
Accumulated other
comprehensive income, net
of tax                              2,026       (318)           (484)           (802)       (6)        1,224
Total stockholders' equity         10,572       (209)           (121)           (330)                 10,242
Total liabilities and
stockholders' equity        $     225,749       $(340)        $(2,100)         $(2,440)           $  223,309


See Explanatory Notes to Pro Forma Condensed Consolidated Balance Sheet.




                                       6
--------------------------------------------------------------------------------
Hartford Life Insurance Company and Subsidiaries
      Explanatory Notes to Pro Forma Condensed Consolidated Balance Sheet
             (Dollar amounts in millions, unless otherwise stated)
                                  (Unaudited)

(1) These pro forma adjustments reflect the elimination of the assets of the businesses sold.

(2) Since these sale transactions are primarily in the form of reinsurance arrangements, the Company retains substantially all of the policyholder liabilities of the sold businesses but records a reinsurance recoverable from buyers at closing.

(3) These pro forma adjustments reflect write-offs of insurance contract-related assets and liabilities as part of the reinsurance transactions, segment and corporate goodwill related to the sold businesses, and other assets sold.

(4) The pro forma adjustment to the deferred tax asset primarily reflects elimination of the deferred tax liability associated with unrealized appreciation on investments.

(5) Includes accruals for estimated transaction and restructuring costs directly attributable to the sale of the businesses.

(6) Reflects the elimination of unrealized appreciation on investments directly related to the businesses.


(7) Using September 30, 2012 data, the following table reflects the estimated
pre-tax and after-tax gain to be recognized at the time of closing the sale.
                                  Retirement Plans      Individual Life       Total
Ceding commission               $           355        $         590       $     945
Fair value of assets in excess
of reserves                                (354 )               (498 )          (852 )
Recapture affiliate reinsurance               -                  349             349
Intangible asset write-off                 (472 )               (831 )        (1,303 )
Transaction costs                           (28 )                (35 )           (63 )
Reinsurance loss                           (499 )               (425 )          (924 )
Realized capital gains -
investments                                 473                  910           1,383
Realized capital gains -
derivatives                                 194                   76             270
Gain from disposal of business,
pre-tax                         $           168        $         561       $     729
Gain from disposal of business,
after-tax                       $           109        $         363       $     472



The actual gain to be reported in continuing operations for the first quarter of
2013 is subject to change pending final determination of the net assets of the
businesses, transaction costs and other adjustments.



                                       7

--------------------------------------------------------------------------------

Wordcount: 1804



USER COMMENTS:


  More Newswires

More Newswires >>
  Most Popular Newswires

More Popular Newswires >>
Hot Off the Wires  Hot off the Wires

More Hot News >>

insider icon Denotes premium content. Learn more about becoming an Insider here.
Brand New FIA! Learn more.