Business Dispositions and Discontinued Operations

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Business Dispositions and Discontinued Operations

16. BUSINESS DISPOSITION AND DISCONTINUED OPERATIONS

Sale of life and annuity business

On May 31, 2018, the Company’s wholly-owned subsidiary, Hartford Holdings, Inc., completed the sale of its life and annuity business to a group of investors led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group. Under the terms of the sale agreement signed December 3, 2017, the investor group formed a limited partnership, Hopmeadow Holdings LP, that acquired HLI, and its life and annuity operating subsidiaries. The Hartford received a 9.7% ownership interest in the limited partnership. The life and annuity operations met the criteria for reporting as discontinued operations and are reported in the Corporate category through the date of sale.

The Hartford reported its 9.7% ownership interest in Hopmeadow Holdings LP, which is accounted for under the equity method, in other assets in the Condensed Consolidated Balance Sheet. The Hartford recognizes its share of income in other revenues in the Condensed Consolidated Statement of Operations on a three month delay, when financial information from the investee becomes available. The Company recognized $28, before tax, of income for the three months ended March 31, 2019.

For further information on the sale, including ongoing transactions with the life and annuity business sold, see Note 20 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements, included in The Hartford's 2018 Form 10-K Annual Report.

Reconciliation of the Major Line Items Constituting Pretax Profit (Loss) of Discontinued Operations

	Three Months Ended March 31,
	2018
Revenues
Earned premiums	$	27
Fee income and other	232
Net investment income	312
Net realized capital gains	21
Total revenues	592
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses	328
Amortization of DAC	41
Insurance operating costs and other expenses [1]	101
Total benefits, losses and expenses	470
Income before income taxes	122
Income tax expense	15
Income from operations of discontinued operations, net of tax	107
Net realized capital gain on disposal, net of tax	62
Income from discontinued operations, net of tax	$	169

[1]Corporate allocated overhead has been included in continuing operations.

Cash Flows from Discontinued Operations

	Three Months Ended March 31,
	2018
Net cash provided by operating activities from discontinued operations	$	267
Net cash used in investing activities from discontinued operations	$	(187	)
Net cash used in financing activities from discontinued operations	$	(340	)
Cash paid for interest	$	2

Cash flows from discontinued operations are included in the Condensed Consolidated Statement of Cash Flows.