-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TbOuoDTtiYbbNM8MGak7iAmW00j6bkyMI9SlwfUEFH8cxRmgu/Zk+RLVEehWFx+G H9NftsG0dy4y3w623J/TOA== 0000950123-04-004459.txt : 20040409 0000950123-04-004459.hdr.sgml : 20040409 20040409153725 ACCESSION NUMBER: 0000950123-04-004459 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040409 ITEM INFORMATION: FILED AS OF DATE: 20040409 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTFORD FINANCIAL SERVICES GROUP INC/DE CENTRAL INDEX KEY: 0000874766 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 133317783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13958 FILM NUMBER: 04727068 BUSINESS ADDRESS: STREET 1: HARTFORD PLZ CITY: HARTFORD STATE: CT ZIP: 06115 BUSINESS PHONE: 8605475000 MAIL ADDRESS: STREET 1: HARTFORD PLAZA T-15 CITY: HARTFORD STATE: CT ZIP: 06115 FORMER COMPANY: FORMER CONFORMED NAME: ITT HARTFORD GROUP INC /DE DATE OF NAME CHANGE: 19930328 8-K 1 y96034e8vk.txt THE HARTFORD FINANCIAL SERVICE, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 9, 2004 --------------- THE HARTFORD FINANCIAL SERVICES GROUP, INC. ------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 001-13958 13-3317783 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) The Hartford Financial Services Group, Inc. Hartford Plaza Hartford, Connecticut 06115-1900 ------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (860) 547-5000 Item 12. Results of Operations and Financial Condition. This Current Report on Form 8-K is filed on behalf of The Hartford Financial Services Group, Inc. ("The Hartford" or the "Company") to provide supplemental financial disclosure relating to the three fiscal years ended December 31, 2003. A copy is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The Hartford intends to change its reporting segments effective for the quarter ending March 31, 2004. The segment change is in accordance with the provisions of Statement of Financial Accounting Standard No. 131, and reflects the manner in which the Company is currently managing its businesses. The Company intends to reclassify its Property & Casualty doubtful accounts expense from underwriting expenses to other expenses. The Company also intends to report all debt and related interest expense in Corporate. The new segments and their component products are as follows: LIFE Retail Products Group: This segment will include the Company's individual annuities, retail mutual funds, 401(k) plans (formerly Corporate), 529 college savings plans, Canadian and offshore investment products. The Company is planning to continue to prepare a separate income statement in its financial supplement for the individual annuity line of business. Institutional Solutions Group: This segment will include Governmental products, institutional liability products, including structured settlements and institutional annuities (including terminal funding cases), as well as private placement life insurance owned by corporations (formerly reported as the Corporate Owned Life Insurance segment) and high net worth individuals. The Individual Life and Group Benefits segments remain unchanged from their definitions as of December 31, 2003. PROPERTY & CASUALTY Property & Casualty is now organized into four reportable operating segments: The underwriting segments of Business Insurance, Personal Lines, Specialty Commercial (collectively "Ongoing Operations") and the Other Operations segment. The Other Operations segment consists of certain property and casualty insurance operations of the Company which have discontinued writing new business and includes the financial results of the assumed reinsurance business previously reported in the Reinsurance segment. The Other Operations segment also includes substantially all of the Company's asbestos and environmental exposures. Property & Casualty will continue to include income and expense items not directly allocated to the operating segments, such as net investment income, net realized gains and losses, other expenses and income taxes. Additionally, in order to better analyze the financial performance of the property and casualty insurance businesses, doubtful accounts expense, which had previously been included in underwriting results, will now be reported in other expenses. CORPORATE The debt and related interest expense that had previously been reflected in Life and Property & Casualty will now be reported in Corporate to better reflect the Company's central control of its capital management function. Life's and Property & Casualty's debt has been replaced with equity. As provided in General Instruction B.6 of Form 8-K, the information and exhibit contained in this Form 8-K shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE HARTFORD FINANCIAL SERVICES GROUP, INC. Date: April 9, 2004 By: /s/ Robert J. Price ------------------------------------------- Name: Robert J. Price Title: Senior Vice President and Controller EX-99.1 3 y96034exv99w1.txt INVESTOR SUPPLEMENT EXHIBIT 99.1 THE HARTFORD FINANCIAL SERVICES GROUP, INC. SUPPLEMENTAL FINANCIAL DISCLOSURE TABLE OF CONTENTS Basis of Presentation ............................................ i, ii CONSOLIDATED Operating Results by Segment Year Ended December 31, 2003 ................................. C-1a Year Ended December 31, 2002 ................................. C-1b Consolidating Statements of Operations Year Ended December 31, 2003, 2002 and 2001 .................. C-2 Consolidating Balance Sheets As of December 31, 2003, 2002 and 2001 ....................... C-3 LIFE Financial Highlights Year Ended December 31, 2003 ................................. L-1a Year Ended December 31, 2002 ................................. L-1b Operating Results Year Ended December 31, 2003 ................................. L-2a Year Ended December 31, 2002 ................................. L-2b Retail Products Group Income Statements Individual Annuity Year Ended December 31, 2003 .......................... L-3a Year Ended December 31, 2002 .......................... L-3b Other Year Ended December 31, 2003 .......................... L-4a Year Ended December 31, 2002 .......................... L-4b Supplemental Data Sales/Other Deposits Year Ended December 31, 2003 .......................... L-5a Year Ended December 31, 2002 .......................... L-5b Assets Under Management As of December 31, 2003 ............................... L-6a As of December 31, 2002 ............................... L-6b Individual Annuity - Account Value Rollforward As of December 31, 2003 ............................... L-7a As of December 31, 2002 ............................... L-7b Other Retail - Account Value Rollforward As of December 31, 2003 ............................... L-8a As of December 31, 2002 ............................... L-8b Institutional Solutions Group Income Statements Year Ended December 31, 2003 .............................. L-9a Year Ended December 31, 2002 .............................. L-9b Supplemental Data Sales/Other Deposits Year Ended December 31, 2003 .......................... L-10a Year Ended December 31, 2002 .......................... L-10b Assets Under Management As of December 31, 2003 ............................... L-11a As of December 31, 2002 ............................... L-11b Account Value and Asset Rollforward As of December 31, 2003 ............................... L-12a As of December 31, 2002 ............................... L-12b PROPERTY & Financial Highlights CASUALTY Year Ended December 31, 2003 ................................. PC-1a Year Ended December 31, 2002 ................................. PC-1b Operating Results Year Ended December 31, 2003 ................................. PC-2a Year Ended December 31, 2002 ................................. PC-2b Ongoing Operations Underwriting Results Year Ended December 31, 2003 ................................. PC-3a Year Ended December 31, 2002 ................................. PC-3b Business Insurance Underwriting Results Year Ended December 31, 2003 ................................. PC-4a Year Ended December 31, 2002 ................................. PC-4b Personal Lines Underwriting Results Year Ended December 31, 2003 ................................. PC-5a Year Ended December 31, 2002 ................................. PC-5b Specialty Commercial Underwriting Results Year Ended December 31, 2003 ................................. PC-6a Year Ended December 31, 2002 ................................. PC-6b Other Operations Underwriting Results Year Ended December 31, 2003 ................................. PC-7a Year Ended December 31, 2002 ................................. PC-7b Consolidated Income Statements Year Ended December 31, 2003 ................................. PC-8a Year Ended December 31, 2002 ................................. PC-8b CORPORATE Consolidated Income Statements Year Ended December 31, 2003 ................................. CO-1a Year Ended December 31, 2002 ................................. CO-1b
THE HARTFORD FINANCIAL SERVICES GROUP, INC. BASIS OF PRESENTATION CHANGES IN PRESENTATION - - Life is organized into four reportable operating segments: Retail Products Group, Institutional Solutions Group, Individual Life and Group Benefits. Life also includes, in an Other category, its international operations, which are located primarily in Japan and Brazil; net realized capital gains and losses other than periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits; corporate items not directly allocated to any of its reportable operating segments; and intersegment eliminations. Periodic net coupon settlements on non-qualifying derivatives and net realized capital gains and losses related to guaranteed minimum withdrawal benefits are reflected in each applicable segment in net realized capital gains and losses. - - Property and Casualty includes Ongoing Operations and Other Operations. Ongoing Operations includes the combined underwriting results of the Business Insurance, Personal Lines and Specialty Commercial segments. Other Operations includes the combined underwriting results of certain property and casualty insurance operations that have discontinued writing new business (including the Company's assumed reinsurance business) and substantially all of the Company's asbestos and environmental exposures. Property & Casualty includes the combined underwriting results of Ongoing Operations and Other Operations along with income and expense items not directly allocated to the Company's property and casualty segments, such as net investment income, net realized capital gains and losses, other expenses and income taxes. - - Underwriting results represent earned premiums less incurred claims, claim adjustment expenses and underwriting expenses. Previously, the Company included doubtful accounts expense in its calculation of underwriting results. Doubtful accounts expense is now included in other expenses for all periods presented. - - Corporate includes all of the Company's debt financing and related interest expense, as well as certain capital raising and purchase accounting adjustment activities. DEFINITIONS AND PRESENTATION - - All amounts are in millions, except for per share and ratio information. - - In the fourth quarter of 2003, The Hartford changed its reporting of earned income on non-qualifying derivatives. Earned income from periodic net coupon settlements on derivatives that do not qualify for hedge accounting under Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", previously reported in net investment income, have been included in net realized capital gains and losses. The reclassification has been made to all periods presented. - - On December 31, 2003, the Company acquired the group life and accident, and short-term and long-term disability businesses of CNA Financial Corporation. Accordingly, there was no impact to the Company's results of operations for the year ended December 31, 2003. - - Operating income is a non-GAAP measure representing net income, before the after-tax effect of net realized capital gains and losses other than periodic net coupon settlements on non-qualifying derivatives and the cumulative effect of accounting changes. The Company believes that operating income provides investors with a valuable measure of the performance of the Company's ongoing businesses because it excludes the effect of those realized capital gains and losses that tend to be highly variable from period to period. Net income is the most directly comparable GAAP measure. - - The Company has included the non-GAAP measure operating income, before the impact of the 2003 asbestos reserve addition, Bancorp litigation, tax related items, severance charges, restructuring charges and September 11, 2001, as applicable, in its presentation of operating results by segment. The Company has provided this measure to enhance investor understanding of the financial performance of the Company's operating businesses by eliminating the effect of the Bancorp litigation, tax related items, severance charges, restructuring charges and September 11, 2001 because these items either are non-recurring or are highly variable from period to period, and the effect of the 2003 asbestos reserve addition, because it relates solely to legacy business. Net income is the most directly comparable GAAP measure. - - Certain operating and statistical measures have been incorporated herein to provide supplemental data that indicate trends in The Hartford's current business. These measures include sales, account value, insurance in-force and written premiums. Written premiums is a non-GAAP measure and represents the amount of premiums charged for policies issued in a fiscal period. Management believes that this performance measure is useful to investors as it reflects current trends in the Company's sale of property and casualty insurance products. The difference between written premiums and earned premiums is the change in unearned premium reserve. Earned premiums is the most directly comparable GAAP measure. - - The Hartford, along with others in the property and casualty insurance industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of claims expense (exclusive of claim adjustment expenses) to earned premiums. The loss adjustment expense ratio represents the ratio of claim adjustment expenses to earned premiums. The expense ratio is the ratio of underwriting expenses (amortization of deferred policy acquisition costs, as well as other underwriting expenses) to earned premiums. The policyholder dividend ratio is the ratio of policyholder dividends to earned premiums. The combined ratio is the sum of the loss ratio, the loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. These ratios are relative measurements that describe the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting loss. The catastrophe ratio (a component of the loss ratio) represents the ratio of catastrophe losses to earned premiums. i THE HARTFORD FINANCIAL SERVICES GROUP, INC. BASIS OF PRESENTATION (CONT.) DEFINITIONS AND PRESENTATION (CONTINUED) - - The Company adopted the provisions of FASB Interpretation No. 46 "Consolidation of Variable Interest Entities (revised December 2003), an interpretation of ARB No. 51", in the fourth quarter of 2003. After applying these provisions to the Company's presentation of trust preferred securities, the trust preferred securities were deconsolidated and simultaneously an equivalent note payable representing the junior subordinated debentures was recognized as debt. - - Accumulated other comprehensive income ("AOCI") represents unrealized gain (loss) on securities, net of tax; net gain (loss) on cash-flow hedging instruments, net of tax; foreign currency translation adjustments, net of tax; and minimum pension liability adjustment, net of tax. - - Assets under management is an internal performance measure used by the Company because a significant portion of the Company's revenues are based upon asset values. These revenues increase or decrease with a rise or fall, correspondingly, in the level of assets under management. - - Book value per share (including AOCI) is calculated by dividing equity including AOCI, net of tax, by common shares outstanding. Book value per share (excluding AOCI) is calculated by dividing equity excluding AOCI, net of tax, by common shares outstanding. - - Certain reclassifications have been made to the prior periods to conform to current presentation. - - NM - Not meaningful means increases or decreases greater than 200%, or changes from a net gain to a net loss position, or vice versa. ii THE HARTFORD FINANCIAL SERVICES GROUP, INC. OPERATING RESULTS BY SEGMENT
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------- 2003 2003 2003 2003 2002 2003 --------- ------- ------- ------- ------- ------- LIFE [1] Retail Products Group Individual Annuity $ 71 $ 93 $ 98 $ 111 $ 333 $ 373 Other Retail 6 8 9 10 23 33 --------------------------------------------------------------------------------------------------------------- Total Retail Products Group 77 101 107 121 356 406 Institutional Solutions Group 31 28 32 31 119 122 Individual Life 32 34 36 41 133 143 Group Benefits 34 35 38 41 128 148 Other 2 2 8 15 25 27 --------------------------------------------------------------------------------------------------------------- Life operating income before Bancorp litigation and tax related items 176 200 221 249 761 846 Bancorp litigation - - (40) - (11) (40) Tax related items - 30 - - 76 30 --------------------------------------------------------------------------------------------------------------- TOTAL LIFE OPERATING INCOME [2] 176 230 181 249 826 836 --------------------------------------------------------------------------------------------------------------- PROPERTY & CASUALTY Ongoing Operations Underwriting Results Business Insurance 7 50 34 67 94 158 Personal Lines 56 8 40 26 (31) 130 Specialty Commercial 5 25 (46) 26 6 10 --------------------------------------------------------------------------------------------------------------- Total Ongoing Operations underwriting results 68 83 28 119 69 298 Other Operations underwriting results (47) (89) (22) (78) (220) (236) --------------------------------------------------------------------------------------------------------------- Total Property & Casualty underwriting results 21 (6) 6 41 (151) 62 Net investment income [3] 281 286 297 308 1,060 1,172 Periodic net coupon settlements on non-qualifying derivatives, before-tax 4 5 5 4 15 18 Net servicing and other income (loss) 3 3 9 (7) 15 8 Other expenses (41) (52) (38) (42) (201) (173) Income tax expense (59) (49) (70) (79) (141) (257) - --------------------------------------------------------------------------------------------------------------------- Property & Casualty operating income before 2003 asbestos reserve addition and severance charges 209 187 209 225 597 830 2003 asbestos reserve addition (1,701) - - - - (1,701) Severance charges - (27) - - - (27) - --------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY OPERATING INCOME [2] (1,492) 160 209 225 597 (898) - --------------------------------------------------------------------------------------------------------------------- CORPORATE OPERATING INCOME (45) (50) (55) (41) (173) (191) - --------------------------------------------------------------------------------------------------------------------- Operating income, before 2003 asbestos reserve addition, Bancorp litigation, tax related items and severance charges [2] 340 337 375 433 1,185 1,485 - --------------------------------------------------------------------------------------------------------------------- 2003 asbestos reserve addition (1,701) - - - - (1,701) Bancorp litigation - - (40) - (11) (40) Tax related items - 30 - - 76 30 Severance charges - (27) - - - (27) - --------------------------------------------------------------------------------------------------------------------- Operating income (loss) [2] (1,361) 340 335 433 1,250 (253) Add: Net realized capital gains (losses), after-tax [2] [3] (29) 176 15 29 (234) 191 Less: Periodic net coupon settlements on non-qualifying derivatives, after-tax [2] 5 9 7 8 16 29 - --------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) $ (1,395) $ 507 $ 343 $ 454 $1,000 $ (91) - --------------------------------------------------------------------------------------------------------------------- PER SHARE DATA Diluted earnings (loss) per share Operating income, before 2003 asbestos reserve addition, Bancorp litigation, tax related items and severance charges $ 1.33 $ 1.25 $ 1.32 $ 1.52 $ 4.71 $ 5.42 Net income (loss) $ (5.46) $ 1.88 $ 1.20 $ 1.59 $ 3.97 $(0.33) - ---------------------------------------------------------------------------------------------------------------------
[1] Life allocates the net realized gains and losses from periodic net coupon settlements on non-qualifying derivatives to its segments. [2] Operating income includes the effect of periodic net coupon settlements on non-qualifying derivatives, after-tax. Such effects are included in net realized capital gains and losses. [3] Reflects reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). C-1a THE HARTFORD FINANCIAL SERVICES GROUP, INC. OPERATING RESULTS BY SEGMENT
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------- 2002 2002 2002 2002 2001 2002 ------- ------- -------- ------- ------- ------- LIFE [1] Retail Products Group Individual Annuity $ 90 $ 89 $ 76 $ 78 $ 378 $ 333 Other Retail 8 7 4 4 23 23 ---------------------------------------------------------------------------------------------------------------------------- Total Retail Products Group 98 96 80 82 401 356 Institutional Solutions Group 30 32 30 27 101 119 Individual Life 31 35 33 34 124 133 Group Benefits 28 30 34 36 108 128 Other 19 2 (3) 7 24 25 ---------------------------------------------------------------------------------------------------------------------------- Life operating income before September 11, 2001, Bancorp litigation and tax related items 206 195 174 186 758 761 September 11, 2001 - - - - (20) - Bancorp litigation (11) - - - - (11) Tax related items - - 76 - 130 76 ---------------------------------------------------------------------------------------------------------------------------- TOTAL LIFE OPERATING INCOME [2] 195 195 250 186 868 826 ---------------------------------------------------------------------------------------------------------------------------- PROPERTY & CASUALTY Ongoing Operations Underwriting Results Business Insurance 15 7 33 39 35 94 Personal Lines (8) (20) (9) 6 (66) (31) Specialty Commercial (8) 13 7 (6) (80) 6 ---------------------------------------------------------------------------------------------------------------------------- Total Ongoing Operations underwriting results (1) - 31 39 (111) 69 Other Operations underwriting results (44) (56) (46) (74) (281) (220) ---------------------------------------------------------------------------------------------------------------------------- Total Property & Casualty underwriting results (45) (56) (15) (35) (392) (151) Net investment income [3] 251 268 257 284 1,042 1,060 Periodic net coupon settlements on non-qualifying derivatives, before-tax 3 3 5 4 11 15 Net servicing and other income 2 1 4 8 22 15 Other expenses (34) (42) (60) (65) (99) (201) Income tax expense (36) (35) (34) (36) (78) (141) - ----------------------------------------------------------------------------------------------------------------------------------- Property & Casualty operating income before September 11, 2001 and restructuring charge 141 139 157 160 506 597 September 11, 2001 - - - - (420) - Restructuring charge - - - - (10) - - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY OPERATING INCOME [2] 141 139 157 160 76 597 - ----------------------------------------------------------------------------------------------------------------------------------- Corporate operating income before restructuring charge (43) (43) (42) (45) (238) (173) Restructuring charge - - - - (1) - - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CORPORATE OPERATING INCOME (43) (43) (42) (45) (239) (173) - ----------------------------------------------------------------------------------------------------------------------------------- Operating income, before September 11, 2001 Bancorp litigation, tax related items and restructuring charge [2] 304 291 289 301 1,026 1,185 - ----------------------------------------------------------------------------------------------------------------------------------- September 11, 2001 - - - - (440) - Bancorp litigation (11) - - - - (11) Tax related items - - 76 - 130 76 Restructuring charge - - - - (11) - - ----------------------------------------------------------------------------------------------------------------------------------- Operating income (loss) [2] 293 291 365 301 705 1,250 Add: Net realized capital gains (losses), after-tax [2] [3] 1 (103) (94) (38) (159) (234) Less: Periodic net coupon settlements on non-qualifying derivatives, after-tax [2] 2 3 6 5 5 16 Add: Cumulative effect of accounting changes, after-tax - - - - (34) - - ----------------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 292 $ 185 $ 265 $ 258 $ 507 $1,000 - ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA Diluted earnings per share Operating income, before September 11, 2001, Bancorp litigation, tax related items and restructuring charge $ 1.22 $ 1.16 $ 1.15 $ 1.17 $ 4.25 $ 4.71 Net income $ 1.17 $ 0.74 $ 1.06 $ 1.01 $ 2.10 $ 3.97 - -----------------------------------------------------------------------------------------------------------------------------------
[1] Life allocates the net realized gains and losses from periodic net coupon settlements on non-qualifying derivatives to its segments. [2] Operating income includes the effect of periodic net coupon settlements on non-qualifying derivatives, after-tax. Such effects are included in net realized capital gains and losses. [3] Reflects reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). C-1b THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATING STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2003, 2002 AND 2001
LIFE PROPERTY & CASUALTY --------------------------- ---------------------------- 2003 2002 2001 2003 2002 2001 ------- ------- ------- ------- ------- ------- Earned premiums $ 3,086 $ 2,697 $ 2,975 $ 8,805 $ 8,114 $ 7,267 Fee income 2,760 2,577 2,633 - - - Net investment income [1] 2,041 1,849 1,782 1,172 1,060 1,042 Other revenues 131 120 128 428 356 363 Net realized capital gains (losses) [1] 40 (308) (136) 253 (68) (92) - -------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 8,058 6,935 7,382 10,658 9,462 8,580 Benefits, claims and claim adjustment expenses [2] 4,616 4,158 4,444 8,926 5,870 6,146 Amortization of deferred policy acquisition costs and present value of future profits 769 628 642 1,642 1,613 1,572 Insurance operating costs and expenses 1,535 1,438 1,390 779 782 588 Interest expense [3] - - - - - - Other expenses [4] 72 32 37 634 542 455 - -------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 6,992 6,256 6,513 11,981 8,807 8,761 INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES 1,066 679 869 (1,323) 655 (181) Income tax expense (benefit) 221 49 90 (578) 112 (182) - -------------------------------------------------------------------------------------------------------------------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 845 630 779 (745) 543 1 Cumulative effect of accounting changes, after-tax [5] - - (26) - - (8) - -------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) [6] 845 630 753 (745) 543 (7) Less: Cumulative effect of accounting changes, after-tax - - (26) - - (8) Less: Net realized capital gains (losses), after-tax [1] 26 (190) (91) 165 (44) (68) Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 17 6 (2) 12 10 7 - -------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [6] [7] $ 836 $ 826 $ 868 $ (898) $ 597 $ 76 - -------------------------------------------------------------------------------------------------------------------- Operating Income ROE, (X-AOCI) 15.0% 16.5% 21.5% (20.1%) 11.5% (0.6%) Operating Income ROE, (X-AOCI) before 2003 asbestos reserve addition, Bancorp litigation, tax related items, severance charges, September 11, 2001, and restructuring charges. 15.2% 15.0% 18.4% 15.2% 11.5% 9.8%
CORPORATE CONSOLIDATED ---------------------- ------------------------------ 2003 2002 2001 2003 2002 2001 ------ ----- ----- -------- -------- -------- Earned premiums $ - $ - $ - $ 11,891 $ 10,811 $ 10,242 Fee income - - - 2,760 2,577 2,633 Net investment income [1] 20 20 18 3,233 2,929 2,842 Other revenues (3) - - 556 476 491 Net realized capital gains (losses) [1] - - - 293 (376) (228) - ----------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 17 20 18 18,733 16,417 15,980 Benefits, claims and claim adjustment expenses [2] 6 6 7 13,548 10,034 10,597 Amortization of deferred policy acquisition costs and present value of future profits - - - 2,411 2,241 2,214 Insurance operating costs and expenses - - - 2,314 2,220 1,978 Interest expense [3] 271 265 295 271 265 295 Other expenses [4] 33 15 63 739 589 555 - ----------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 310 286 365 19,283 15,349 15,639 INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES (293) (266) (347) (550) 1,068 341 Income tax expense (benefit) (102) (93) (108) (459) 68 (200) - ----------------------------------------------------------------------------------------------------------------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES (191) (173) (239) (91) 1,000 541 Cumulative effect of accounting changes, after-tax [5] - - - - - (34) - ----------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) [6] (191) (173) (239) (91) 1,000 507 Less: Cumulative effect of accounting changes, after-tax - - - - - (34) Less: Net realized capital gains (losses), after-tax [1] - - - 191 (234) (159) Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] - - - 29 16 5 - ----------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [6] [7] $ (191) $(173) $(239) $ (253) $ 1,250 $ 705 - ----------------------------------------------------------------------------------------------------------------- Operating Income ROE, (X-AOCI) NM NM NM (2.5%) 13.8% 9.1% Operating Income ROE, (X-AOCI) before 2003 asbestos reserve addition, Bancorp litigation, tax related items, severance charges, September 11, 2001, and restructuring charges. NM NM NM 14.8% 13.1% 13.2%
[1] Reflects reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). [2] Property & Casualty includes $2,604 in 2003 of before-tax impact of 2003 asbestos reserve addition. [3] Reflects the reclassification of all Life and Property & Casualty interest expense to Corporate. [4] Property & Casualty includes $41 in 2003 of before-tax severance charges. Life includes $62 in 2003 and $17 in 2002 of before-tax expense related to the Bancorp litigation dispute. 2001 includes goodwill amortization. [5] Represents the cumulative effect of the Company's adoption of ETIF Issue 99-20 of $(11) and SFAS No. 133 of $(23). [6] Property & Casualty includes $1,701 in 2003 of after-tax impact of the 2003 asbestos reserve addition and $27 in 2003 of after-tax severance charges. Life includes $40 in 2003 and $11 in 2002 of after-tax expense related to settlement of the Bancorp litigation dispute. Life includes $30 in 2003, $76 in 2002 and $130 in 2001 of tax benefit related to the favorable treatment of certain tax items arising during the 1996-2002 tax years. [7] Operating income includes the effect of periodic net coupon settlements on non-qualifying derivatives, after-tax. For GAAP reporting, such effects are included in net realized capital gains and losses. C-2 THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 2003, 2002 and 2001
LIFE PROPERTY & CASUALTY ---------------------------------- ------------------------------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2003 2002 2001 2003 2002 2001 --------- --------- --------- -------- --------- -------- Investments Fixed maturities, available-for-sale, at fair value $ 37,462 $ 29,377 $ 23,301 $ 23,715 $ 19,446 $ 16,742 Equity securities, available-for-sale, at fair value 357 458 428 208 459 921 Policy loans, at outstanding balance 2,512 2,934 3,317 - - - Other investments 823 1,122 1,331 682 668 646 - ------------------------------------------------------------------------------------------------------------------------------- Total investments 41,154 33,891 28,377 24,605 20,573 18,309 Cash 265 179 167 197 198 186 Premiums receivable and agents' balances 335 208 229 2,750 2,403 2,561 Reinsurance recoverables 604 796 648 5,354 4,231 4,514 Deferred policy acquisition costs and present value of future profits 6,623 5,758 5,572 975 930 847 Deferred income taxes (486) (274) (16) 1,101 610 689 Goodwill 796 796 796 152 153 153 Other assets 1,668 1,362 1,116 2,025 2,031 1,928 Separate account assets 136,633 107,078 114,720 - - - - ------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 187,592 $ 149,794 $ 151,609 $ 37,159 $ 31,129 $ 29,187 - ------------------------------------------------------------------------------------------------------------------------------- Future policy benefits, unpaid claims and claim adjustment expenses $ 11,411 $ 8,583 $ 7,952 $ 21,715 $ 17,091 $ 17,036 Other policyholder funds and benefits payable 26,186 23,957 20,247 - - - Unearned premiums 58 54 45 4,372 3,942 3,399 Debt [1] [2] - - - - - - Other liabilities 4,440 2,858 2,535 3,285 2,939 2,734 Separate account liabilities 136,633 107,078 114,720 - - - - ------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 178,728 142,530 145,499 29,372 23,972 23,169 - ------------------------------------------------------------------------------------------------------------------------------- Equity excluding AOCI, net of tax 8,003 6,555 5,914 7,080 6,449 5,720 AOCI, net of tax 861 709 196 707 708 298 - ------------------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 8,864 7,264 6,110 7,787 7,157 6,018 - ------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 187,592 $ 149,794 $ 151,609 $ 37,159 $ 31,129 $ 29,187 - -------------------------------------------------------------------------------------------------------------------------------
CORPORATE CONSOLIDATED ---------------------------- ------------------------------ Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2003 2002 2001 2003 2002 2001 -------- -------- -------- -------- -------- -------- Investments Fixed maturities, available-for-sale, at fair value $ 86 $ 66 $ 3 $ 61,263 $ 48,889 $ 40,046 Equity securities, available-for-sale, at fair value - - - 565 917 1,349 Policy loans, at outstanding balance - - - 2,512 2,934 3,317 Other investments 2 - - 1,507 1,790 1,977 - ------------------------------------------------------------------------------------------------------------------------ Total investments 88 66 3 65,847 54,530 46,689 Cash - - - 462 377 353 Premiums receivable and agents' balances - - - 3,085 2,611 2,790 Reinsurance recoverables - - - 5,958 5,027 5,162 Deferred policy acquisition costs and present value of future profits 1 1 1 7,599 6,689 6,420 Deferred income taxes 230 209 20 845 545 693 Goodwill 772 772 772 1,720 1,721 1,721 Other assets 11 4 1 3,704 3,397 3,045 Separate account assets - - - 136,633 107,078 114,720 - ------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $ 1,102 $ 1,052 $ 797 $225,853 $181,975 $181,593 - ------------------------------------------------------------------------------------------------------------------------ Future policy benefits, unpaid claims and claim adjustment expenses $ (9) $ (16) $ (23) $ 33,117 $ 25,658 $ 24,965 Other policyholder funds and benefits payable (1) (1) (2) 26,185 23,956 20,245 Unearned premiums (7) (7) (8) 4,423 3,989 3,436 Debt [1] [2] 5,663 4,379 3,976 5,663 4,379 3,976 Other liabilities 468 384 (31) 8,193 6,181 5,238 Separate account liabilities - - - 136,633 107,078 114,720 - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 6,114 4,739 3,912 214,214 171,241 172,580 - ------------------------------------------------------------------------------------------------------------------------ Equity excluding AOCI, net of tax (4,690) (3,364) (3,155) 10,393 9,640 8,479 AOCI, net of tax (322) (323) 40 1,246 1,094 534 - ------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY (5,012) (3,687) (3,115) 11,639 10,734 9,013 - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,102 $ 1,052 $ 797 $225,853 $181,975 $181,593 - ------------------------------------------------------------------------------------------------------------------------
[1] Reflects the reclassification of all Life and Property & Casualty debt to Corporate. [2] Includes junior subordinated debentures. C-3 LIFE THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ----------------- 2003 2003 2003 2003 2002 2003 ------- ------- ------- ------- ------- ------- REVENUES Retail Products Group Individual Annuity $ 385 $ 430 $ 454 $ 487 $ 1,539 $ 1,756 Other Retail 93 103 112 123 403 431 --------------------------------------------------------------------------------------------------------- Total Retail Products Group 478 533 566 610 1,942 2,187 Institutional Solutions Group 422 470 733 485 1,757 2,110 Individual Life 244 240 249 249 958 982 Group Benefits 667 638 663 656 2,582 2,624 Other (25) 81 37 62 (304) 155 --------------------------------------------------------------------------------------------------------- TOTAL REVENUES $ 1,786 $ 1,962 $ 2,248 $ 2,062 $ 6,935 $ 8,058 - ---------------------------------------------------------------------------------------------------------------- OPERATING RESULTS BY SEGMENT Retail Products Group Individual Annuity $ 71 $ 93 $ 98 $ 111 $ 333 $ 373 Other Retail 6 8 9 10 23 33 --------------------------------------------------------------------------------------------------------- Total Retail Products Group 77 101 107 121 356 406 Institutional Solutions Group 31 28 32 31 119 122 Individual Life 32 34 36 41 133 143 Group Benefits 34 35 38 41 128 148 Other 2 2 8 15 25 27 --------------------------------------------------------------------------------------------------------- Operating income, before Bancorp litigation and tax related items 176 200 221 249 761 846 Bancorp litigation - - (40) - (11) (40) Tax related items - 30 - - 76 30 --------------------------------------------------------------------------------------------------------- Operating income 176 230 181 249 826 836 Add: Net realized capital (losses) gains, after-tax [1] (29) 38 3 14 (190) 26 Less: Periodic net coupon settlements on non-qualifying derivatives, after-tax 2 6 4 5 6 17 --------------------------------------------------------------------------------------------------------- NET INCOME $ 145 $ 262 $ 180 $ 258 $ 630 $ 845 - ----------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. L - 1a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------- 2002 2002 2002 2002 2001 2002 ------- ------- ------- ------- ------- ------- REVENUES Retail Products Group Individual Annuity $ 383 $ 391 $ 379 $ 386 $ 1,532 $ 1,539 Other Retail 107 107 96 93 359 403 --------------------------------------------------------------------------------------------------------------------------- Total Retail Products Group 490 498 475 479 1,891 1,942 Institutional Solutions Group 480 414 431 432 2,167 1,757 Individual Life 232 249 239 238 890 958 Group Benefits 644 654 645 639 2,507 2,582 Other (10) (117) (125) (52) (73) (304) --------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES $ 1,836 $ 1,698 $ 1,665 $ 1,736 $ 7,382 $ 6,935 - ---------------------------------------------------------------------------------------------------------------------------------- OPERATING RESULTS BY SEGMENT Retail Products Group Individual Annuity $ 90 $ 89 $ 76 $ 78 $ 378 $ 333 Other Retail 8 7 4 4 23 23 --------------------------------------------------------------------------------------------------------------------------- Total Retail Products Group 98 96 80 82 401 356 Institutional Solutions Group 30 32 30 27 101 119 Individual Life 31 35 33 34 124 133 Group Benefits 28 30 34 36 108 128 Other 19 2 (3) 7 24 25 --------------------------------------------------------------------------------------------------------------------------- Operating income, before September 11, 2001, Bancorp litigation and tax related items 206 195 174 186 758 761 September 11, 2001 - - - - (20) - Bancorp litigation (11) - - - - (11) Tax related items - - 76 - 130 76 --------------------------------------------------------------------------------------------------------------------------- Operating income 195 195 250 186 868 826 Add: Net realized capital (losses) gains, after-tax [1] (7) (75) (69) (39) (91) (190) Less: Periodic net coupon settlements on non-qualifying derivatives, after-tax - 1 2 3 (2) 6 --------------------------------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change, net of tax 188 119 179 144 779 630 Add: Cumulative effect of accounting change, net of tax - - - - (26) - --------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 188 $ 119 $ 179 $ 144 $ 753 $ 630 - ----------------------------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. L - 1b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE OPERATING RESULTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------- 2003 2003 2003 2003 2002 2003 ------ ------ ------ ------- ------- ------- REVENUES Earned premiums $ 683 $ 706 $ 981 $ 716 $ 2,697 $ 3,086 Fee income 617 656 716 771 2,577 2,760 Net investment income 503 504 512 522 1,849 2,041 Other revenues 27 37 35 32 120 131 Net realized capital (losses) gains [1] (44) 59 4 21 (308) 40 --------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 1,786 1,962 2,248 2,062 6,935 8,058 - --------------------------------------------------------------------------------------------------------------------------------- BENEFITS AND EXPENSES Benefits, claims and claim adjustment expenses 1,083 1,086 1,375 1,072 4,158 4,616 Amortization of deferred policy acquisition costs and present value of future profits 163 175 202 229 628 769 Insurance operating costs and expenses 351 395 379 410 1,438 1,535 Other expenses [2] 4 3 65 - 32 72 --------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 1,601 1,659 2,021 1,711 6,256 6,992 - --------------------------------------------------------------------------------------------------------------------------------- NET INCOME INCOME BEFORE INCOME TAXES 185 303 227 351 679 1,066 Income tax expense [3] 40 41 47 93 49 221 --------------------------------------------------------------------------------------------------------------------------- NET INCOME 145 262 180 258 630 845 Less: Net realized capital (losses) gains, after-tax [1] (29) 38 3 14 (190) 26 Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 2 6 4 5 6 17 --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME [3] [4] $ 176 $ 230 $ 181 $ 249 $ 826 $ 836 - ---------------------------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] The third quarter ended September 30, 2003 and year ended December 31, 2002 include expenses related to the Bancorp litigation dispute of $62 and $17, respectively. [3] The year ended December 31, 2002 includes a $76 tax benefit and the quarter ended June 30, 2003 and the year ended December 31, 2003 include a $30 tax benefit primarily related to the favorable treatment of certain tax items. [4] The third quarter ended September 30, 2003 and year ended December 31, 2002 includes after-tax expenses related to the Bancorp litigation dispute of $40 and $11, respectively. L - 2a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE OPERATING RESULTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ----------------- 2002 2002 2002 2002 2001 2002 ------ ------ ------ ------ ------- ------- REVENUES Earned premiums $ 709 $ 664 $ 667 $ 657 $ 2,975 $ 2,697 Fee income 662 672 627 616 2,633 2,577 Net investment income 448 448 460 493 1,782 1,849 Other revenues 32 32 27 29 128 120 Net realized capital (losses) gains [1] (15) (118) (116) (59) (136) (308) ---------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 1,836 1,698 1,665 1,736 7,382 6,935 - ---------------------------------------------------------------------------------------------------------------------- BENEFITS AND EXPENSES Benefits, claims and claim adjustment expenses 1,057 1,028 1,050 1,023 4,444 4,158 Amortization of deferred policy acquisition costs and present value of future profits 152 171 163 142 642 628 Insurance operating costs and expenses 357 358 335 388 1,390 1,438 Other expenses [2] 20 4 6 2 37 32 ---------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 1,586 1,561 1,554 1,555 6,513 6,256 - ---------------------------------------------------------------------------------------------------------------------- NET INCOME INCOME BEFORE INCOME TAXES 250 137 111 181 869 679 Income tax expense (benefit) [3] 62 18 (68) 37 90 49 ---------------------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change, net of tax 188 119 179 144 779 630 Cumulative effect of accounting change, net of tax - - - - (26) - ---------------------------------------------------------------------------------------------------------------- NET INCOME 188 119 179 144 753 630 Less: Cumulative effect of accounting change, net of tax - - - - (26) - Less: Net realized capital (losses) gains, after-tax [1] (7) (75) (69) (39) (91) (190) Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] - 1 2 3 (2) 6 ---------------------------------------------------------------------------------------------------------------- OPERATING INCOME [3] [4] $ 195 $ 195 $ 250 $ 186 $ 868 $ 826 - ----------------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] The first quarter ended March 31, 2002 includes an expense of $17 related to the Bancorp litigation dispute. The 2001 amount includes $24 of goodwill amortization. [3] The years ended December 31, 2002 and December 31, 2001 include a tax benefit related to the favorable treatment of certain tax items of $76 and $130, respectively. [4] The first quarter ended March 31, 2002 includes $11 of after-tax expense related to the Bancorp litigation dispute. L - 2b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP - INDIVIDUAL ANNUITY INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ------------------- 2003 2003 2003 2003 2002 2003 ------ ------ ------ ------ -------- -------- REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity fees $ 231 $ 259 $ 296 $ 326 $ 1,011 $ 1,112 Other fees 38 33 28 32 157 131 --------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 269 292 324 358 1,168 1,243 Net guaranteed separate account income 20 25 29 27 94 101 Direct premiums 28 30 20 18 87 96 Reinsurance premiums (37) (32) (29) (32) (113) (130) --------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 280 315 344 371 1,236 1,310 NET INVESTMENT INCOME Net investment income on G/A assets 116 127 128 125 374 496 Net investment income on assigned capital 14 16 16 18 56 64 Charge for invested capital (30) (31) (36) (36) (134) (133) --------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 100 112 108 107 296 427 Net realized capital gains (losses) [1] 5 3 2 9 7 19 ----------------------------------------------------------------------------------------------------------- TOTAL REVENUES 385 430 454 487 1,539 1,756 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 17 14 12 8 49 51 Other contract benefits 23 20 15 15 81 73 Change in reserve 12 16 10 7 29 45 Sales inducements 15 16 18 17 66 66 Interest credited on G/A assets 68 74 73 69 210 284 --------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 135 140 128 116 435 519 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 230 281 286 290 784 1,087 Operating expenses 45 49 46 50 195 190 Premium taxes and other expenses 6 4 5 2 20 17 --------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 281 334 337 342 999 1,294 Deferred policy acquisition costs (205) (250) (256) (254) (682) (965) --------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 76 84 81 88 317 329 Amortization of deferred policy acquisition costs and present value of future profits 87 101 125 137 370 450 --------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 298 325 334 341 1,122 1,298 INCOME BEFORE INCOME TAX EXPENSE 87 105 120 146 417 458 Income tax expense (benefit) 16 (7) 22 31 84 62 --------------------------------------------------------------------------------------------------------- NET INCOME 71 112 98 115 333 396 Less: non operating net realized gains (losses), net of tax [2] - - - 4 - 4 --------------------------------------------------------------------------------------------------------- OPERATING INCOME 71 112 98 111 333 392 Less: tax related items - 19 - - - 19 --------------------------------------------------------------------------------------------------------- OPERATING INCOME, BEFORE TAX RELATED ITEMS $ 71 $ 93 $ 98 $ 111 $ 333 $ 373 ---------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of certain policyholder liabilities. L - 3a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP - INDIVIDUAL ANNUITY INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------------- 2002 2002 2002 2002 2001 2002 ------- ------- ------- ------- ---------- ---------- REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity fees $ 273 $ 270 $ 235 $ 233 $ 1,137 $ 1,011 Other fees 33 40 44 40 143 157 ------------------------------------------------------------------------------------------------------------ TOTAL FEE INCOME 306 310 279 273 1,280 1,168 Net guaranteed separate account income 26 25 20 23 102 94 Direct premiums 19 21 26 21 40 87 Reinsurance premiums (28) (29) (28) (28) (104) (113) ------------------------------------------------------------------------------------------------------------ TOTAL PREMIUMS AND OTHER CONSIDERATIONS 323 327 297 289 1,318 1,236 NET INVESTMENT INCOME Net investment income on G/A assets 80 82 100 112 307 374 Net investment income on assigned capital 14 15 13 14 56 56 Charge for invested capital (35) (35) (32) (32) (151) (134) ------------------------------------------------------------------------------------------------------------ TOTAL NET INVESTMENT INCOME 59 62 81 94 212 296 Net realized capital gains (losses) [1] 1 2 1 3 2 7 -------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 383 391 379 386 1,532 1,539 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 7 9 17 16 19 49 Other contract benefits 18 20 21 22 50 81 Change in reserve 6 7 11 5 16 29 Sales inducements 17 17 15 17 72 66 Interest credited on G/A assets 45 47 54 64 170 210 ------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND CLAIMS 93 100 118 124 327 435 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 189 185 178 232 709 784 Operating expenses 48 47 50 50 190 195 Premium taxes and other expenses 4 5 6 5 24 20 ------------------------------------------------------------------------------------------------------------ SUBTOTAL - EXPENSES BEFORE DEFERRAL 241 237 234 287 923 999 Deferred policy acquisition costs (163) (159) (155) (205) (618) (682) ------------------------------------------------------------------------------------------------------------ TOTAL OTHER INSURANCE EXPENSE 78 78 79 82 305 317 Amortization of deferred policy acquisition costs and present value of future profits 97 100 89 84 404 370 ------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 268 278 286 290 1,036 1,122 INCOME BEFORE INCOME TAX EXPENSE 115 113 93 96 496 417 Income tax expense (benefit) 25 24 17 18 118 84 ------------------------------------------------------------------------------------------------------------ NET INCOME 90 89 76 78 378 333 Less: non operating net realized gains (losses), net of tax [2] - - - - - - ------------------------------------------------------------------------------------------------------------ OPERATING INCOME 90 89 76 78 378 333 Less: tax related items - - - - - - ------------------------------------------------------------------------------------------------------------ OPERATING INCOME, BEFORE TAX RELATED ITEMS $ 90 $ 89 $ 76 $ 78 $ 378 $ 333 ------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of certain policyholder liabilities. L - 3b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP - OTHER INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ---------------- 2003 2003 2003 2003 2002 2003 ------- ------ ------ ------ ------- ------- REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity fees $ 8 $ 8 $ 11 $ 13 $ 26 $ 40 Mutual fund and other fees 67 76 84 92 303 319 -------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 75 84 95 105 329 359 Direct premiums - 3 (1) 1 2 3 -------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 75 87 94 106 331 362 NET INVESTMENT INCOME Net investment income on G/A assets 16 16 16 17 70 65 Net investment income on assigned capital - 1 1 - 2 2 Charge for invested capital 1 (1) - - - - -------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 17 16 17 17 72 67 Net realized capital gains (losses) [1] 1 - 1 - - 2 ---------------------------------------------------------------------------------------------------- TOTAL REVENUES 93 103 112 123 403 431 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Other contract benefits 2 1 2 2 6 7 Change in reserve - - - - (2) - Sales inducements - 1 - - 1 1 Interest credited on G/A assets 10 11 10 10 46 41 -------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 12 13 12 12 51 49 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 43 54 58 69 211 224 Operating expenses 30 32 37 38 125 137 Premium taxes and other expenses 3 3 1 3 8 10 -------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 76 89 96 110 344 371 Deferred policy acquisition costs (20) (24) (24) (30) (93) (98) -------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 56 65 72 80 251 273 Amortization of deferred policy acquisition costs 16 13 14 16 66 59 -------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 84 91 98 108 368 381 INCOME BEFORE INCOME TAX EXPENSE 9 12 14 15 35 50 Income tax expense 3 3 5 5 12 16 -------------------------------------------------------------------------------------------------- NET INCOME 6 9 9 10 23 34 Less: non operating net realized gains (losses), net of tax [2] - - - - - - -------------------------------------------------------------------------------------------------- OPERATING INCOME 6 9 9 10 23 34 Less: tax related items - 1 - - - 1 -------------------------------------------------------------------------------------------------- OPERATING INCOME, BEFORE TAX RELATED ITEMS $ 6 $ 8 $ 9 $ 10 $ 23 $ 33 --------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of product liabilities. L - 4a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP - OTHER INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ----------------- 2002 2002 2002 2002 2001 2002 ------ ------ ------ ------ -------- -------- REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity fees $ 6 $ 7 $ 6 $ 7 $ 19 $ 26 Mutual fund and other fees 83 83 70 67 271 303 ------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 89 90 76 74 290 329 Direct premiums 1 - 1 - 1 2 ------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 90 90 77 74 291 331 NET INVESTMENT INCOME Net investment income on G/A assets 16 17 19 18 67 70 Net investment income on assigned capital 1 - - 1 1 2 Charge for invested capital - - - - - - ------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 17 17 19 19 68 72 Net realized capital gains (losses) [1] - - - - - - --------------------------------------------------------------------------------------------------------- TOTAL REVENUES 107 107 96 93 359 403 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Other contract benefits 2 1 1 2 7 6 Change in reserve - (1) - (1) (2) (2) Sales inducements - 1 - - - 1 Interest credited on G/A assets 11 10 12 13 42 46 ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 13 11 13 14 47 51 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 64 61 45 41 223 211 Operating expenses 29 29 31 36 92 125 Premium taxes and other expenses 1 2 4 1 6 8 ------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 94 92 80 78 321 344 Deferred policy acquisition costs (27) (25) (19) (22) (94) (93) ------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 67 67 61 56 227 251 Amortization of deferred policy acquisition costs 15 18 16 17 51 66 ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 95 96 90 87 325 368 INCOME BEFORE INCOME TAX EXPENSE 12 11 6 6 34 35 Income tax expense 4 4 2 2 11 12 ------------------------------------------------------------------------------------------------------- NET INCOME 8 7 4 4 23 23 Less: non operating net realized gains (losses), net of tax [2] - - - - - - ------------------------------------------------------------------------------------------------------- OPERATING INCOME 8 7 4 4 23 23 Less: tax related items - - - - - - ------------------------------------------------------------------------------------------------------- OPERATING INCOME, BEFORE TAX RELATED ITEMS $ 8 $ 7 $ 4 $ 4 $ 23 $ 23 -------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of product liabilities. L - 4b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q -------------------- 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- --------- --------- SALES INDIVIDUAL ANNUITY Broker-dealer $ 2,521 $ 3,003 $ 2,853 $ 2,824 $ 7,734 $ 11,201 Banks 980 1,305 1,464 1,530 3,902 5,279 ----------------------------------------------------------------------------------------------------------- TOTAL SALES BY DISTRIBUTION $ 3,501 $ 4,308 $ 4,317 $ 4,354 $ 11,636 $ 16,480 ----------------------------------------------------------------------------------------------------------- Variable $ 3,437 $ 4,206 $ 3,954 $ 4,074 $ 10,348 $ 15,671 Fixed MVA/other 64 102 363 280 1,288 809 ----------------------------------------------------------------------------------------------------------- TOTAL SALES BY PRODUCT $ 3,501 $ 4,308 $ 4,317 $ 4,354 $ 11,636 $ 16,480 ----------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS $ 848 $ 1,151 $ 1,138 $ 1,634 $ 4,778 $ 4,771 401(K) Annuity $ 179 $ 276 $ 337 $ 570 $ 1,001 $ 1,362 Mutual funds 3 - - - 4 3 ----------------------------------------------------------------------------------------------------------- TOTAL 401(K) $ 182 $ 276 $ 337 $ 570 $ 1,005 $ 1,365 ----------------------------------------------------------------------------------------------------------- 529 COLLEGE SAVINGS PLAN/SPECIALTY PRODUCTS/OTHER $ 36 $ 49 $ 56 $ 91 $ 94 $ 232 --------------------------------------------------------------------------------------------------------------- SALES & OTHER DEPOSITS INDIVIDUAL ANNUITY Variable $ 3,437 $ 4,206 $ 3,954 $ 4,074 $ 10,348 $ 15,671 Fixed MVA/other 140 191 452 365 1,445 1,148 ----------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY 3,577 4,397 4,406 4,439 11,793 16,819 ----------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS 848 1,151 1,138 1,634 4,778 4,771 401(K) Annuity 396 327 409 440 1,244 1,572 Mutual funds 45 52 55 63 68 215 ----------------------------------------------------------------------------------------------------------- TOTAL 401(K) 441 379 464 503 1,312 1,787 ----------------------------------------------------------------------------------------------------------- 529 COLLEGE SAVINGS PLAN/SPECIALTY PRODUCTS/OTHER 36 49 56 91 94 232 --------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP $ 4,902 $ 5,976 $ 6,064 $ 6,667 $ 17,977 $ 23,609 - ----------------------------------------------------------------------------------------------------------------------
L - 5a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ------------------ 2002 2002 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- SALES INDIVIDUAL ANNUITY Broker-dealer $ 1,726 $ 1,761 $ 1,703 $ 2,544 $ 6,643 $ 7,734 Banks 1,047 979 846 1,030 3,342 3,902 --------------------------------------------------------------------------------------------------------- TOTAL SALES BY DISTRIBUTION $ 2,773 $ 2,740 $ 2,549 $ 3,574 $ 9,985 $ 11,636 --------------------------------------------------------------------------------------------------------- Variable $ 2,164 $ 2,308 $ 2,397 $ 3,479 $ 8,980 $ 10,348 Fixed MVA/other 609 432 152 95 1,005 1,288 --------------------------------------------------------------------------------------------------------- TOTAL SALES BY PRODUCT $ 2,773 $ 2,740 $ 2,549 $ 3,574 $ 9,985 $ 11,636 --------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS $ 1,589 $ 1,412 $ 945 $ 832 $ 5,576 $ 4,778 401(K) Annuity $ 144 $ 277 $ 234 $ 346 $ 801 $ 1,001 Mutual funds - 1 2 1 48 4 --------------------------------------------------------------------------------------------------------- TOTAL 401(K) $ 144 $ 278 $ 236 $ 347 $ 849 $ 1,005 --------------------------------------------------------------------------------------------------------- 529 COLLEGE SAVINGS PLAN/SPECIALTY PRODUCTS/OTHER $ 6 $ 31 $ 27 $ 30 $ - $ 94 ------------------------------------------------------------------------------------------------------------- SALES & OTHER DEPOSITS INDIVIDUAL ANNUITY Variable $ 2,164 $ 2,308 $ 2,397 $ 3,479 $ 8,980 $ 10,348 Fixed MVA/other 642 467 186 150 1,134 1,445 --------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY 2,806 2,775 2,583 3,629 10,114 11,793 --------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS 1,589 1,412 945 832 5,576 4,778 401(K) Annuity 367 257 325 295 853 1,244 Mutual funds 23 36 4 5 39 68 --------------------------------------------------------------------------------------------------------- TOTAL 401(K) 390 293 329 300 892 1,312 --------------------------------------------------------------------------------------------------------- 529 COLLEGE SAVINGS PLAN/SPECIALTY PRODUCTS/OTHER 6 31 27 30 - 94 ------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP $ 4,791 $ 4,511 $ 3,884 $ 4,791 $ 16,582 $ 17,977 - -------------------------------------------------------------------------------------------------------------------
L - 5b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT
1Q 2Q 3Q 4Q 2003 2003 2003 2003 --------- --------- --------- --------- INDIVIDUAL ANNUITY General account $ 9,523 $ 9,899 $ 9,796 $ 9,351 Guaranteed separate account 9,747 9,685 9,996 10,239 Non-guaranteed separate account 55,379 64,751 68,719 78,126 -------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY $ 74,649 $ 84,335 $ 88,511 $ 97,716 - ---------------------------------------------------------------------------------------------------------------------- 401(K) General account $ 1,000 $ 1,006 $ 1,027 $ 1,024 Non-guaranteed separate account 2,212 2,694 3,017 3,582 -------------------------------------------------------------------------------------------------------- TOTAL 401(K) $ 3,212 $ 3,700 $ 4,044 $ 4,606 - ---------------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP General account $ 10,523 $ 10,905 $ 10,823 $ 10,375 Guaranteed separate account 9,747 9,685 9,996 10,239 Non-guaranteed separate account 57,591 67,445 71,736 81,708 -------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP ACCOUNT VALUE $ 77,861 $ 88,035 $ 92,555 $ 102,322 - ---------------------------------------------------------------------------------------------------------------------- BY PRODUCT INDIVIDUAL ANNUITY Individual Variable Annuities General account $ 8,620 $ 8,959 $ 8,816 $ 8,345 Separate account 55,427 64,789 68,756 78,156 - ---------------------------------------------------------------------------------------------------------------------- Total individual variable annuities 64,047 73,748 77,572 86,501 Fixed MVA & other individual annuities 10,602 10,587 10,939 11,215 ------------------------------------------------------------------------------------------------------ TOTAL INDIVIDUAL ANNUITY 74,649 84,335 88,511 97,716 ------------------------------------------------------------------------------------------------------ 401(K) - ANNUITY 3,212 3,700 4,044 4,606 TOTAL RETAIL PRODUCTS GROUP ACCOUNT VALUE 77,861 88,035 92,555 102,322 SPECIALTY PRODUCTS/OTHER - SEGREGATED ASSETS 7 20 30 48 MUTUAL FUND ASSETS Retail mutual fund assets 13,742 16,290 17,208 20,301 401(K) mutual fund assets 394 471 502 585 Specialty Product/Other mutual fund assets 84 104 122 109 529 College Savings Plan assets 108 147 177 259 -------------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 14,328 17,012 18,009 21,254 -------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP ASSETS UNDER MANAGEMENT $ 92,196 $ 105,067 $ 110,594 $ 123,624 - ----------------------------------------------------------------------------------------------------------------------
L - 6a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT
1Q 2Q 3Q 4Q December 31, 2002 2002 2002 2002 2001 --------- --------- --------- --------- ------------ INDIVIDUAL ANNUITY General account $ 5,463 $ 5,985 $ 7,569 $ 8,583 $ 5,283 Guaranteed separate account 9,219 9,562 9,684 9,721 8,725 Non-guaranteed separate account 70,442 62,578 52,878 56,604 70,145 --------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY $ 85,124 $ 78,125 $ 70,131 $ 74,908 $ 84,153 - ----------------------------------------------------------------------------------------------------------------------------------- 401(K) General account $ 902 $ 918 $ 971 $ 942 $ 879 Non-guaranteed separate account 1,898 1,833 1,788 2,030 1,639 --------------------------------------------------------------------------------------------------------------------- TOTAL 401(K) $ 2,800 $ 2,751 $ 2,759 $ 2,972 $ 2,518 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP General account $ 6,365 $ 6,903 $ 8,540 $ 9,525 $ 6,162 Guaranteed separate account 9,219 9,562 9,684 9,721 8,725 Non-guaranteed separate account 72,340 64,411 54,666 58,634 71,784 --------------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP ACCOUNT VALUE $ 87,924 $ 80,876 $ 72,890 $ 77,880 $ 86,671 - ----------------------------------------------------------------------------------------------------------------------------------- BY PRODUCT INDIVIDUAL ANNUITY Individual Variable Annuities General account $ 4,608 $ 5,127 $ 6,704 $ 7,702 $ 4,430 Separate account 70,436 62,585 52,914 56,641 70,151 ---------------------------------------------------------------------------------------------------------------- Total individual variable annuities 75,044 67,712 59,618 64,343 74,581 Fixed MVA & other individual annuities 10,080 10,413 10,513 10,565 9,572 ------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY 85,124 78,125 70,131 74,908 84,153 ------------------------------------------------------------------------------------------------------------------- 401(K) - ANNUITY 2,800 2,751 2,759 2,972 2,518 TOTAL RETAIL PRODUCTS GROUP ACCOUNT VALUE 87,924 80,876 72,890 77,880 86,671 MUTUAL FUND ASSETS Retail mutual fund assets 16,308 14,922 12,967 14,079 15,471 401(K) mutual fund assets 433 416 361 393 69 529 College Savings Plan assets 6 34 53 87 - ------------------------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 16,747 15,372 13,381 14,559 15,540 ------------------------------------------------------------------------------------------------------------------- TOTAL RETAIL PRODUCTS GROUP ASSETS UNDER MANAGEMENT $ 104,671 $ 96,248 $ 86,271 $ 92,439 $ 102,211 - -----------------------------------------------------------------------------------------------------------------------------------
L - 6b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - INDIVIDUAL ANNUITY - ACCOUNT VALUE ROLLFORWARD [1]
1Q 2Q 3Q 4Q 2003 2003 2003 2003 -------- -------- -------- -------- VARIABLE ANNUITIES BEGINNING BALANCE $ 64,343 $ 64,047 $ 73,748 $ 77,572 Sales/premiums/other deposits 3,437 4,206 3,954 4,074 Surrenders (1,800) (1,467) (1,427) (2,163) Death benefits/annuitizations/other (307) (297) (270) (278) Net exchanges 8 23 11 5 -------------------------------------------------------------------------------------------------- Net Flows 1,338 2,465 2,268 1,638 Change in market value/change in reserve/interest credited (1,634) 7,236 1,556 7,291 -------------------------------------------------------------------------------------------------- ENDING BALANCE $ 64,047 $ 73,748 $ 77,572 $ 86,501 - ---------------------------------------------------------------------------------------------------------------------------- FIXED MVA AND OTHER BEGINNING BALANCE $ 10,565 $ 10,602 $ 10,587 $ 10,939 Sales/premiums/other deposits 140 191 452 365 Surrenders (152) (239) (149) (159) Death benefits/annuitizations/other (99) (113) (98) (93) Net exchanges (7) (21) (11) (4) -------------------------------------------------------------------------------------------------- Net Flows (118) (182) 194 109 Change in market value/change in reserve/interest credited 155 167 158 167 -------------------------------------------------------------------------------------------------- ENDING BALANCE $ 10,602 $ 10,587 $ 10,939 $ 11,215 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY BEGINNING BALANCE $ 74,908 $ 74,649 $ 84,335 $ 88,511 Sales/premiums/other deposits 3,577 4,397 4,406 4,439 Surrenders (1,952) (1,706) (1,576) (2,322) Death benefits/annuitizations/other (406) (410) (368) (371) Net exchanges 1 2 - 1 -------------------------------------------------------------------------------------------------- Net Flows 1,220 2,283 2,462 1,747 Change in market value/change in reserve/interest credited (1,479) 7,403 1,714 7,458 -------------------------------------------------------------------------------------------------- ENDING BALANCE $ 74,649 $ 84,335 $ 88,511 $ 97,716 - ----------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 7a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - INDIVIDUAL ANNUITY - ACCOUNT VALUE ROLLFORWARD [1]
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 -------- -------- -------- -------- ----------- VARIABLE ANNUITIES BEGINNING BALANCE $ 74,581 $ 75,044 $ 67,712 $ 59,618 $ 78,174 Sales/premiums/other deposits 2,164 2,308 2,397 3,479 8,980 Acquisitions - - - - 4,123 Surrenders (1,522) (1,773) (1,957) (1,859) (6,583) Death benefits/annuitizations/other (295) (292) (265) (249) (1,236) Net exchanges (5) (11) (4) 11 110 --------------------------------------------------------------------------------------------------------- Net Flows 342 232 171 1,382 5,394 Change in market value/change in reserve/interest credited 121 (7,564) (8,265) 3,343 (8,987) --------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 75,044 $ 67,712 $ 59,618 $ 64,343 $ 74,581 - ----------------------------------------------------------------------------------------------------------------------------------- FIXED MVA AND OTHER BEGINNING BALANCE $ 9,572 $ 10,080 $ 10,413 $ 10,513 $ 9,059 Sales/premiums/other deposits 642 467 186 150 1,134 Acquisitions - - - - 323 Surrenders (196) (188) (142) (163) (1,097) Death benefits/annuitizations/other (95) (99) (95) (92) (340) Net exchanges 8 14 9 (10) (63) --------------------------------------------------------------------------------------------------------- Net Flows 359 194 (42) (115) (43) Change in market value/change in reserve/interest credited 149 139 142 167 556 --------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 10,080 $ 10,413 $ 10,513 $ 10,565 $ 9,572 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY BEGINNING BALANCE $ 84,153 $ 85,124 $ 78,125 $ 70,131 $ 87,233 Sales/premiums/other deposits 2,806 2,775 2,583 3,629 10,114 Acquisitions - - - - 4,446 Surrenders (1,718) (1,961) (2,099) (2,022) (7,680) Death benefits/annuitizations/other (390) (391) (360) (341) (1,576) Net exchanges 3 3 5 1 47 --------------------------------------------------------------------------------------------------------- Net Flows 701 426 129 1,267 5,351 Change in market value/change in reserve/interest credited 270 (7,425) (8,123) 3,510 (8,431) --------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 85,124 $ 78,125 $ 70,131 $ 74,908 $ 84,153 - -----------------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 7b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - OTHER RETAIL - ACCOUNT VALUE ROLLFORWARD [1]
1Q 2Q 3Q 4Q 2003 2003 2003 2003 ------- ------- ------- ------- 401(K) ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 2,972 $ 3,212 $ 3,700 $ 4,044 Sales/premiums/other deposits 396 327 409 440 Surrenders (100) (107) (138) (205) Death benefits/annuitizations/other (10) (9) (8) (1) --------------------------------------------------------------------------------------------- Net Flows 286 211 263 234 Change in market value/change in reserve/interest credited (46) 277 81 328 --------------------------------------------------------------------------------------------- ENDING BALANCE $ 3,212 $ 3,700 $ 4,044 $ 4,606 - ---------------------------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS ASSET ROLLFORWARD BEGINNING BALANCE $14,079 $13,742 $ 16,290 $17,208 Sales 848 1,151 1,138 1,634 Redemptions (716) (615) (654) (631) --------------------------------------------------------------------------------------------- Net Sales 132 536 484 1,003 Change in market value (458) 2,028 462 2,110 Other (11) (16) (28) (20) --------------------------------------------------------------------------------------------- ENDING BALANCE $13,742 $16,290 $17,208 $20,301 - ----------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 8a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE RETAIL PRODUCTS GROUP SUPPLEMENTAL DATA - OTHER RETAIL - ACCOUNT VALUE ROLLFORWARD [1]
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 ------- ------- ------- -------- ------------ 401(K) ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 2,518 $ 2,800 $ 2,751 $ 2,759 $ 2,236 Sales/premiums/other deposits 367 257 325 295 853 Surrenders (94) (124) (80) (174) (390) Death benefits/annuitizations/other (12) (13) (11) (15) (51) -------------------------------------------------------------------------------------------------- Net Flows 261 120 234 106 412 Change in market value/change in reserve/interest credited 21 (169) (226) 107 (130) -------------------------------------------------------------------------------------------------- ENDING BALANCE $ 2,800 $ 2,751 $ 2,759 $ 2,972 $ 2,518 - -------------------------------------------------------------------------------------------------------------------------------- RETAIL MUTUAL FUNDS ASSET ROLLFORWARD BEGINNING BALANCE $15,471 $16,308 $14,922 $ 12,967 $ 9,962 Sales 1,589 1,412 945 832 5,576 Redemptions (586) (727) (809) (705) (1,876) -------------------------------------------------------------------------------------------------- Net Sales 1,003 685 136 127 3,700 Acquisitions - - - - 3,001 Change in market value (55) (2,049) (2,074) 946 (1,064) Other (111) (22) (17) 39 (128) -------------------------------------------------------------------------------------------------- ENDING BALANCE $16,308 $14,922 $12,967 $ 14,079 $15,471 - --------------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 8b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q --------------- 2003 2003 2003 2003 2002 2003 ------ ------ ------ ------ ------ ------ REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 19 $ 22 $ 22 $ 25 $ 84 $ 88 Cost of insurance charges 53 53 51 50 236 207 Other fees 3 1 - - 25 4 -------------------------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 75 76 73 75 345 299 Net guaranteed separate account income 2 3 2 2 11 9 Direct premiums 100 142 403 150 422 795 Reinsurance premiums - - - - (1) - -------------------------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 177 221 478 227 777 1,103 NET INVESTMENT INCOME Net investment income on G/A assets 238 236 245 247 955 966 Net investment income on assigned capital 6 7 6 7 24 26 Charge for invested capital - 1 1 1 (2) 3 -------------------------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 244 244 252 255 977 995 Net realized capital gains (losses) [1] 1 5 3 3 3 12 ---------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 422 470 733 485 1,757 2,110 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 53 37 39 38 208 167 Other contract benefits 75 76 74 66 299 291 Change in reserve 71 118 387 148 315 724 Sales inducements - - 1 - - 1 Interest credited on G/A assets 136 143 144 143 547 566 -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 335 374 645 395 1,369 1,749 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 10 11 10 13 44 44 Operating expenses 25 28 29 31 106 113 Dividends to policyholders 14 25 14 7 62 60 Premium taxes and other expenses [3] 2 - 62 (2) 41 62 -------------------------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 51 64 115 49 253 279 Deferred policy acquisition costs (15) (16) (17) (19) (29) (67) -------------------------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 36 48 98 30 224 212 Amortization of deferred policy acquisition costs 6 7 6 15 8 34 -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 377 429 749 440 1,601 1,995 Income before income tax expense 45 41 (16) 45 156 115 Income tax expense (benefit) 14 12 (8) 14 48 32 -------------------------------------------------------------------------------------------------------------------------- NET INCOME 31 29 (8) 31 108 83 Less: non operating net realized gains (losses), net of tax [2] - - - - - - -------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 31 29 (8) 31 108 83 Less: Bancorp litigation - - (40) - (11) (40) Less: tax related items - 1 - - - 1 -------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME, BEFORE BANCORP LITIGATION AND TAX RELATED ITEMS $ 31 $ 28 $ 32 $ 31 $ 119 $ 122 --------------------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of product liabilities. [3] The third quarter ended September 30, 2003 and year ended December 31, 2002 includes an expense related to the Bancorp litigation dispute of $62 and $17, respectively. L - 9a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP INCOME STATEMENTS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q --------------- 2002 2002 2002 2002 2001 2002 ------ ------ ------ ------ ------ ------ REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 21 $ 22 $ 21 $ 20 $ 86 $ 84 Cost of insurance charges 60 54 61 61 291 236 Other fees 12 7 4 2 30 25 -------------------------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 93 83 86 83 407 345 Net guaranteed separate account income 2 3 3 3 12 11 Direct premiums 140 86 98 98 840 422 Reinsurance premiums - - (1) - (48) (1) -------------------------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 235 172 186 184 1,211 777 NET INVESTMENT INCOME Net investment income on G/A assets 240 236 239 240 937 955 Net investment income on assigned capital 6 6 6 6 22 24 Charge for invested capital (1) (1) - - (3) (2) -------------------------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 245 241 245 246 956 977 Net realized capital gains (losses) [1] - 1 - 2 - 3 ---------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 480 414 431 432 2,167 1,757 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 53 53 48 54 246 208 Other contract benefits 72 80 74 73 253 299 Change in reserve 122 46 88 59 699 315 Sales inducements - - - - 1 - Interest credited on G/A assets 135 139 135 138 593 547 -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 382 318 345 324 1,792 1,369 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 14 8 11 11 46 44 Operating expenses 26 26 27 27 120 106 Dividends to policyholders 5 15 7 35 66 62 Premium taxes and other expenses [3] 29 7 3 2 29 41 -------------------------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 74 56 48 75 261 253 Deferred policy acquisition costs (6) (7) (9) (7) (35) (29) -------------------------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 68 49 39 68 226 224 Amortization of deferred policy acquisition costs 2 2 3 1 6 8 -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 452 369 387 393 2,024 1,601 Income before income tax expense 28 45 44 39 143 156 Income tax expense (benefit) 9 13 14 12 44 48 -------------------------------------------------------------------------------------------------------------------------- NET INCOME 19 32 30 27 99 108 Less: non operating net realized gains (losses), net of tax [2] - - - - - - -------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 19 32 30 27 99 108 Less: September 11, 2001 - - - - (2) - Less: Bancorp litigation (11) - - - - (11) -------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME, BEFORE SEPTEMBER 11, 2001, BANCORP LITIGATION AND TAX RELATED ITEMS $ 30 $ 32 $ 30 $ 27 $ 101 $ 119 --------------------------------------------------------------------------------------------------------------------------
[1] Includes periodic net coupon settlements on non-qualifying derivatives. [2] Net gains (losses) on derivatives used as economic hedges of product liabilities [3] The first quarter ended March 31, 2002 includes a $17 expense related to the Bancorp litigation dispute. L - 9b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ------------------ 2003 2003 2003 2003 2002 2003 --------------------------------------------------------- SALES INSTITUTIONAL Structured settlements $ 144 $ 180 $ 172 $ 219 $ 516 $ 715 Institutional annuities 9 52 308 59 144 428 Mutual funds 16 47 55 221 47 339 GIC/Funding agreements 164 809 351 562 1,282 1,886 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL $ 333 $ 1,088 $ 886 $ 1,061 $ 1,989 $ 3,368 ----------------------------------------------------------------------------------------------------------------- GOVERNMENTAL Annuity $ 77 $ 104 $ 345 $ 102 $ 338 $ 628 Mutual funds 8 8 9 8 - 33 ----------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL $ 85 $ 112 $ 354 $ 110 $ 338 $ 661 ----------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE INSURANCE Corporate owned $ 80 $ 15 $ 12 $ 89 $ 1,280 $ 196 High net worth - 108 4 15 1 127 ----------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE $ 80 $ 123 $ 16 $ 104 $ 1,281 $ 323 ----------------------------------------------------------------------------------------------------------------- SALES & OTHER DEPOSITS INSTITUTIONAL Structured settlements $ 155 $ 142 $ 161 $ 151 $ 498 $ 609 Institutional annuities 9 53 304 64 144 430 Mutual funds 16 47 55 221 47 339 GIC/Funding agreements 165 623 327 466 1,028 1,581 Other 3 308 7 6 19 324 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 348 1,173 854 908 1,736 3,283 ----------------------------------------------------------------------------------------------------------------- GOVERNMENTAL Annuity 234 274 520 297 1,005 1,325 Mutual funds 8 8 9 8 45 33 ----------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL 242 282 529 305 1,050 1,358 ----------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE INSURANCE Corporate owned 87 2 55 89 1,243 233 High net worth - 108 4 15 1 127 ----------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE 87 110 59 104 1,244 360 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP $ 677 $ 1,565 $ 1,442 $ 1,317 $ 4,030 $ 5,001 - ----------------------------------------------------------------------------------------------------------------------
L - 10a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS
YEAR ENDED DECEMBER 31, 1Q 2Q 3Q 4Q ------------------ 2002 2002 2002 2002 2001 2002 --------------------------------------------------------- SALES INSTITUTIONAL Structured settlements $ 88 $ 132 $ 113 $ 183 $ 554 $ 516 Institutional annuities 47 15 43 39 444 144 Mutual funds 11 13 12 11 153 47 GIC/Funding agreements 245 524 347 166 1,619 1,282 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL $ 391 $ 684 $ 515 $ 399 $ 2,770 $ 1,989 ----------------------------------------------------------------------------------------------------------------- GOVERNMENTAL Annuity $ 53 $ 69 $ 165 $ 51 $ 770 $ 338 ----------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL $ 53 $ 69 $ 165 $ 51 $ 770 $ 338 ----------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE INSURANCE Corporate owned $ 612 $ 333 $ 260 $ 75 $ 1,535 $ 1,280 High net worth - - - 1 1 1 ----------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE $ 612 $ 333 $ 260 $ 76 $ 1,536 $ 1,281 ----------------------------------------------------------------------------------------------------------------- SALES & OTHER DEPOSITS INSTITUTIONAL Structured settlements $ 143 $ 116 $ 106 $ 133 $ 525 $ 498 Institutional annuities 43 19 44 38 436 144 Mutual funds 11 13 12 11 153 47 GIC/Funding agreements 148 523 300 57 1,067 1,028 Other 2 5 5 7 112 19 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 347 676 467 246 2,293 1,736 ----------------------------------------------------------------------------------------------------------------- GOVERNMENTAL Annuity 199 246 369 191 1,343 1,005 Mutual funds - - 43 2 - 45 ----------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL 199 246 412 193 1,343 1,050 ----------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE INSURANCE Corporate owned 589 314 265 75 1,499 1,243 High net worth - - - 1 1 1 ----------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE 589 314 265 76 1,500 1,244 ----------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP $1,135 $ 1,236 $ 1,144 $ 515 $ 5,136 $ 4,030 - ----------------------------------------------------------------------------------------------------------------------
L - 10b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT
1Q 2Q 3Q 4Q 2003 2003 2003 2003 -------- -------- -------- -------- INSTITUTIONAL General account $ 7,793 $ 8,578 $ 9,270 $ 9,912 Guaranteed separate account 407 401 367 343 Non-guaranteed separate account 1,763 2,245 2,265 2,405 ------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL $ 9,963 $ 11,224 $ 11,902 $ 12,660 - ----------------------------------------------------------------------------------------------------------------------- GOVERNMENTAL General account $ 3,557 $ 3,594 $ 3,787 $ 3,819 Non-guaranteed separate account 3,642 4,217 4,532 5,146 ------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL $ 7,199 $ 7,811 $ 8,319 $ 8,965 - ----------------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE INSURANCE General account $ 2,860 $ 2,835 $ 2,448 $ 2,403 Non-guaranteed separate account 20,162 20,628 20,711 21,114 ------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE $ 23,022 $ 23,463 $ 23,159 $ 23,517 - ----------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP General account $ 14,210 $ 15,007 $ 15,505 $ 16,134 Guaranteed separate account 407 401 367 343 Non-guaranteed separate account 25,567 27,090 27,508 28,665 ------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ACCOUNT VALUE $ 40,184 $ 42,498 $ 43,380 $ 45,142 - ----------------------------------------------------------------------------------------------------------------------- BY PRODUCT INSTITUTIONAL Structured settlements $ 2,838 $ 2,979 $ 3,140 $ 3,285 Institutional annuities 1,975 2,047 2,333 2,395 GIC/Funding agreements 3,469 4,047 4,261 4,677 Other 1,681 2,151 2,168 2,303 ---------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 9,963 11,224 11,902 12,660 ---------------------------------------------------------------------------------------------------------- GOVERNMENTAL - ANNUITY 7,199 7,811 8,319 8,965 PRIVATE PLACEMENT LIFE INSURANCE Variable 19,863 20,326 20,557 20,993 Leveraged 3,159 3,137 2,602 2,524 ---------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE 23,022 23,463 23,159 23,517 ---------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ACCOUNT VALUE 40,184 42,498 43,380 45,142 MUTUAL FUND ASSETS Institutional mutual fund assets 108 166 196 438 Governmental mutual fund assets 609 684 695 770 ---------------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 717 850 891 1,208 ---------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ASSETS UNDER MANAGEMENT $ 40,901 $ 43,348 $ 44,271 $ 46,350 - -----------------------------------------------------------------------------------------------------------------------
L - 11a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT
1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 -------- -------- -------- -------- ------------ INSTITUTIONAL General account $ 6,823 $ 7,084 $ 7,504 $ 7,496 $ 6,507 Guaranteed separate account 403 408 429 417 420 Non-guaranteed separate account 2,123 1,970 1,786 1,825 2,142 ----------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL $ 9,349 $ 9,462 $ 9,719 $ 9,738 $ 9,069 - ------------------------------------------------------------------------------------------------------------------------------------ GOVERNMENTAL General account $ 3,159 $ 3,231 $ 3,431 $ 3,475 $ 3,175 Non-guaranteed separate account 4,586 4,067 3,459 3,736 4,560 ----------------------------------------------------------------------------------------------------------------------- TOTAL GOVERNMENTAL $ 7,745 $ 7,298 $ 6,890 $ 7,211 $ 7,735 - ------------------------------------------------------------------------------------------------------------------------------------ PRIVATE PLACEMENT LIFE INSURANCE General account $ 3,742 $ 3,609 $ 3,211 $ 2,950 $ 3,749 Non-guaranteed separate account 19,315 19,586 19,688 20,045 18,585 ----------------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE $ 23,057 $ 23,195 $ 22,899 $ 22,995 $22,334 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INSTITUTIONAL SOLUTIONS GROUP General account $ 13,724 $ 13,924 $ 14,146 $ 13,921 $13,431 Guaranteed separate account 403 408 429 417 420 Non-guaranteed separate account 26,024 25,623 24,933 25,606 25,287 ----------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ACCOUNT VALUE $ 40,151 $ 39,955 $ 39,508 $ 39,944 $39,138 - ------------------------------------------------------------------------------------------------------------------------------------ BY PRODUCT INSTITUTIONAL Structured settlements $ 2,379 $ 2,485 $ 2,588 $ 2,686 $ 2,242 Institutional annuities 1,900 1,899 1,944 1,978 1,879 GIC/Funding agreements 3,066 3,209 3,485 3,333 2,925 Other 2,004 1,869 1,702 1,741 2,023 -------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 9,349 9,462 9,719 9,738 9,069 -------------------------------------------------------------------------------------------------------------------- GOVERNMENTAL - ANNUITY 7,745 7,298 6,890 7,211 7,735 PRIVATE PLACEMENT LIFE INSURANCE Variable 18,764 19,076 19,298 19,674 18,019 Leveraged 4,293 4,119 3,601 3,321 4,315 -------------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT LIFE INSURANCE 23,057 23,195 22,899 22,995 22,334 -------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ACCOUNT VALUE 40,151 39,955 39,508 39,944 39,138 MUTUAL FUND ASSETS Institutional mutual fund assets 124 151 107 120 436 Governmental mutual fund assets 824 693 604 642 833 -------------------------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 948 844 711 762 1,269 -------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL SOLUTIONS GROUP ASSETS UNDER MANAGEMENT $ 41,099 $ 40,799 $ 40,219 $ 40,706 $40,407 - ------------------------------------------------------------------------------------------------------------------------------------
L - 11b THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - ACCOUNT VALUE AND ASSET ROLLFORWARD [1]
1Q 2Q 3Q 4Q 2003 2003 2003 2003 ------- -------- -------- --------- INSTITUTIONAL ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 9,738 $ 9,963 $ 11,224 $ 11,902 Sales/premiums/other deposits 332 1,126 799 687 Surrenders (96) (130) (114) (210) Death benefits/annuitizations/other (93) (88) (90) (82) ------------------------------------------------------------------------------------------------ Net Flows 143 908 595 395 Change in market value/change in reserve/interest credited 82 353 83 363 ------------------------------------------------------------------------------------------------ ENDING BALANCE $ 9,963 $ 11,224 $ 11,902 $ 12,660 - --------------------------------------------------------------------------------------------------------------------------------- GOVERNMENTAL ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 7,211 $ 7,199 $ 7,811 $ 8,319 Sales/premiums/other deposits 234 274 520 297 Surrenders (152) (174) (154) (197) Death benefits/annuitizations/other (19) (18) (17) (17) ------------------------------------------------------------------------------------------------ Net Flows 63 82 349 83 Change in market value/change in reserve/interest credited (75) 530 159 563 ------------------------------------------------------------------------------------------------ ENDING BALANCE $ 7,199 $ 7,811 $ 8,319 $ 8,965 - --------------------------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT LIFE ACCOUNT VALUE ROLLFORWARD INSURANCE BEGINNING BALANCE $22,995 $ 23,022 $ 23,463 $ 23,159 Initial and subsequent premiums 87 110 59 104 Surrenders (189) (33) (571) (106) Death benefits/annuitizations/other (110) (120) (93) (38) ------------------------------------------------------------------------------------------------ Net Flows (212) (43) (605) (40) Change in market value/change in reserve/interest credited 239 484 301 398 ------------------------------------------------------------------------------------------------ ENDING BALANCE $23,022 $ 23,463 $ 23,159 $ 23,517 - ---------------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 12a THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INSTITUTIONAL SOLUTIONS GROUP SUPPLEMENTAL DATA - ACCOUNT VALUE AND ASSET ROLLFORWARD [1]
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 -------- ------- ------- ------- ------------ INSTITUTIONAL ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 9,069 $ 9,349 $ 9,462 $ 9,719 $ 7,704 Sales/premiums/other deposits 336 663 455 235 2,140 Surrenders (54) (442) (84) (312) (636) Death benefits/annuitizations/other (97) (103) (99) (94) (335) ------------------------------------------------------------------------------------------------------ Net Flows 185 118 272 (171) 1,169 Change in market value/change in reserve/interest credited 95 (5) (15) 190 196 ------------------------------------------------------------------------------------------------------ ENDING BALANCE $ 9,349 $ 9,462 $ 9,719 $ 9,738 $ 9,069 - ------------------------------------------------------------------------------------------------------------------------------------ GOVERNMENTAL ACCOUNT VALUE ROLLFORWARD (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 7,735 $ 7,745 $ 7,298 $ 6,890 $ 7,436 Sales/premiums/other deposits 199 246 369 191 1,343 Surrenders (173) (177) (245) (106) (454) Death benefits/annuitizations/other (22) (20) (19) (22) (97) ------------------------------------------------------------------------------------------------------ Net Flows 4 49 105 63 792 Change in market value/change in reserve/interest credited 6 (496) (513) 258 (493) ------------------------------------------------------------------------------------------------------ ENDING BALANCE $ 7,745 $ 7,298 $ 6,890 $ 7,211 $ 7,735 - ------------------------------------------------------------------------------------------------------------------------------------ PRIVATE PLACEMENT LIFE ACCOUNT VALUE ROLLFORWARD INSURANCE BEGINNING BALANCE $ 22,334 $ 23,057 $ 23,195 $ 22,899 $ 20,915 Initial and subsequent premiums 589 314 265 76 1,500 Surrenders (45) (194) (565) (299) (818) Death benefits/annuitizations/other (118) (112) (106) (66) (393) ------------------------------------------------------------------------------------------------------ Net Flows 426 8 (406) (289) 289 Change in market value/change in reserve/interest credited 297 130 110 385 1,130 ------------------------------------------------------------------------------------------------------ ENDING BALANCE $ 23,057 $ 23,195 $ 22,899 $ 22,995 $ 22,334 - ------------------------------------------------------------------------------------------------------------------------------------
[1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts. L - 12b PROPERTY & CASUALTY THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY FINANCIAL HIGHLIGHTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 ------- ------- ------- ------- ------- ------- GAAP TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS Written premiums $ 2,447 $ 2,134 $ 2,318 $ 2,166 $ 8,584 $ 9,065 Earned premiums 2,166 2,106 2,268 2,265 8,114 8,805 Business Insurance 7 50 34 67 94 158 Personal Lines 56 8 40 26 (31) 130 Specialty Commercial 5 25 (46) 26 6 10 --------------------------------------------------------------------------------------------------------------------------- ONGOING OPERATIONS UNDERWRITING RESULTS 68 83 28 119 69 298 Other Operations (2,651) (89) (22) (78) (220) (2,840) --------------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS $(2,583) $ (6) $ 6 $ 41 $ (151) $(2,542) GAAP ONGOING PROPERTY & CASUALTY UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 57.2 57.0 58.9 54.9 58.1 57.0 --------------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.6 11.9 11.8 12.6 11.8 12.2 Expenses 26.2 26.6 27.6 26.8 28.3 26.8 --------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 38.8 38.5 39.4 39.4 40.2 39.1 --------------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.5 0.5 0.4 0.2 0.8 0.4 --------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 96.6 96.0 98.8 94.6 99.1 96.5 - -------------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 2.7 4.7 3.4 1.5 1.4 3.1 - -------------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 93.8 91.3 95.3 93.1 97.6 93.4 - -------------------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY INCOME Net income (loss) $(1,495) $ 295 $ 218 $ 237 $ 543 $ (745) Operating income (loss) (1,492) 160 209 225 597 (898) Impacts of 2003 asbestos reserve addition and severance charges (1,701) (27) - - - (1,728) Operating income before impacts of 2003 asbestos reserve addition and severance charges 209 187 209 225 597 830 - --------------------------------------------------------------------------------------------------------------------------------
PC-1a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY FINANCIAL HIGHLIGHTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 [1] 2002 ------- ------- ------- ------- -------- ------- GAAP TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS Written premiums $ 2,083 $ 2,159 $ 2,205 $ 2,137 $ 7,586 $ 8,584 Earned premiums 1,877 1,976 2,107 2,154 7,267 8,114 Business Insurance 15 7 33 39 (210) 94 Personal Lines (8) (20) (9) 6 (75) (31) Specialty Commercial (8) 13 7 (6) (247) 6 ---------------------------------------------------------------------------------------------------------------------------- ONGOING OPERATIONS UNDERWRITING RESULTS (1) - 31 39 (532) 69 Other Operations (44) (56) (46) (74) (507) (220) ---------------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS $ (45) $ (56) $ (15) $ (35) $(1,039) $ (151) GAAP ONGOING PROPERTY & CASUALTY UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 57.8 59.4 58.2 57.0 65.2 58.1 ---------------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.2 11.9 11.3 11.9 13.4 11.8 Expenses 29.4 27.8 28.0 28.2 29.1 28.3 ---------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 41.7 39.7 39.3 40.1 42.5 40.2 ---------------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.5 0.9 0.8 0.8 0.6 0.8 ---------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 100.0 100.1 98.3 98.0 108.3 99.1 - -------------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 1.2 2.6 1.1 0.8 8.1 1.4 - -------------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 98.8 97.5 97.2 97.2 100.2 97.6 - -------------------------------------------------------------------------------------------------------------------------------- TOTAL PROPERTY & CASUALTY INCOME Net income (loss) $ 147 $ 109 $ 128 $ 159 $ (7) $ 543 Operating income 141 139 157 160 76 597 Impacts of September 11, 2001 and restructuring charges - - - - (430) - Operating income before impacts of September 11, 2001 and restructuring charges 141 139 157 160 506 597 - --------------------------------------------------------------------------------------------------------------------------------
[1] Includes impact of September 11 of 5.4 in the loss ratio, 1.0 in the loss adjustment expense ratio, 0.2 in the expense ratio and 6.6 in the combined ratio. PC-1b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OPERATING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 ------- ------- ------- ------- ------- ------- GAAP TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS Written premiums $ 2,447 $ 2,134 $ 2,318 $ 2,166 $ 8,584 $ 9,065 Change in reserve 281 28 50 (99) 470 260 --------------------------------------------------------------------------------------------------------------------------- Earned premiums 2,166 2,106 2,268 2,265 8,114 8,805 Loss and loss adjustment expenses 4,161 1,541 1,622 1,602 5,870 8,926 Underwriting expenses 578 562 630 617 2,338 2,387 Dividends to policyholders 10 9 10 5 57 34 --------------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS (2,583) (6) 6 41 (151) (2,542) Net servicing income (loss) 3 3 9 (7) 15 8 Net investment income [1] 281 286 297 308 1,060 1,172 Net realized capital gains (losses) [1] (1) 212 19 23 (68) 253 Other expenses (41) (93) (38) (42) (201) (214) Income tax (expense) benefit 846 (107) (75) (86) (112) 578 --------------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) (1,495) 295 218 237 543 (745) Less: Net realized capital gains (losses), after-tax [1] - 138 12 15 (44) 165 Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 3 3 3 3 10 12 --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) (1,492) 160 209 225 597 (898) 2003 asbestos reserve addition (1,701) - - - - (1,701) Severance charges - (27) - - - (27) --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME BEFORE IMPACTS OF 2003 ASBESTOS RESERVE ADDITION AND SEVERANCE CHARGES $ 209 $ 187 $ 209 $ 225 $ 597 $ 830 --------------------------------------------------------------------------------------------------------------------------- Total Property & Casualty effective tax rate - net income NM 26.9% 25.1% 26.9% 17.0% NM Total Property & Casualty effective tax rate - operating income NM 18.4% 24.6% 26.3% 19.0% NM - --------------------------------------------------------------------------------------------------------------------------------
[1] Reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). PC-2a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OPERATING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 2002 ------- ------- ------- ------- ------- ------- GAAP TOTAL PROPERTY & CASUALTY UNDERWRITING RESULTS Written premiums $ 2,083 $ 2,159 $ 2,205 $ 2,137 $ 7,586 $ 8,584 Change in reserve 206 183 98 (17) 319 470 --------------------------------------------------------------------------------------------------------------------------- Earned premiums 1,877 1,976 2,107 2,154 7,267 8,114 Loss and loss adjustment expenses 1,358 1,452 1,505 1,555 6,146 5,870 Underwriting expenses 555 563 603 617 2,122 2,338 Dividends to policyholders 9 17 14 17 38 57 --------------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS (45) (56) (15) (35) (1,039) (151) Net servicing income 2 1 4 8 22 15 Net investment income [1] 251 268 257 284 1,042 1,060 Net realized capital gains (losses) [1] 11 (43) (37) 1 (92) (68) Other expenses (34) (42) (60) (65) (114) (201) Income tax (expense) benefit (38) (19) (21) (34) 182 (112) Cumulative effect of accounting changes, after-tax - - - - (8) - --------------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) 147 109 128 159 (7) 543 Less: Net realized capital gains (losses), after-tax [1] 8 (28) (25) 1 (68) (44) Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 2 2 4 2 7 10 Less: Cumulative effect of accounting changes, after-tax - - - - (8) - --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME $ 141 $ 139 $ 157 $ 160 $ 76 $ 597 September 11, 2001 - - - - (420) - Restructuring charges - - - - (10) - --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME BEFORE IMPACTS OF SEPTEMBER 11, 2001 AND RESTRUCTURING CHARGES 141 139 157 160 506 597 --------------------------------------------------------------------------------------------------------------------------- Total Property & Casualty effective tax rate - net income 20.7% 15.1% 12.7% 17.9% NM 17.0% Total Property & Casualty effective tax rate - operating income 20.1% 20.2% 17.9% 18.1% NM 19.0% - --------------------------------------------------------------------------------------------------------------------------------
[1] Reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). PC-2b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY ONGOING OPERATIONS UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 2,166 $ 2,227 $ 2,301 $ 2,147 $ 7,824 $ 8,841 Change in reserve 159 190 115 (58) 492 406 ---------------------------------------------------------------------------------------------------------------------- Earned premiums 2,007 2,037 2,186 2,205 7,332 8,435 Loss and loss adjustment expenses 1,403 1,403 1,544 1,490 5,130 5,840 Underwriting expenses 526 542 604 591 2,076 2,263 Dividends to policyholders 10 9 10 5 57 34 ---------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 68 $ 83 $ 28 $ 119 $ 69 $ 298 - ------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 57.2 57.0 58.9 54.9 58.1 57.0 ---------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.6 11.9 11.8 12.6 11.8 12.2 Expenses 26.2 26.6 27.6 26.8 28.3 26.8 ---------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 38.8 38.5 39.4 39.4 40.2 39.1 ---------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.5 0.5 0.4 0.2 0.8 0.4 ---------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 96.6 96.0 98.8 94.6 99.1 96.5 - ------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 2.7 4.7 3.4 1.5 1.4 3.1 - ------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 93.8 91.3 95.3 93.1 97.6 93.4 - -------------------------------------------------------------------------------------------------------------------------
PC-3a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY ONGOING OPERATIONS UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 [1] 2002 -------- -------- -------- -------- -------- --------- GAAP UNDERWRITING RESULTS Written premiums $ 1,851 $ 1,969 $ 2,029 $ 1,975 $ 6,720 $ 7,824 Change in reserve 163 186 119 24 321 492 ----------------------------------------------------------------------------------------------------------------------- Earned premiums 1,688 1,783 1,910 1,951 6,399 7,332 Loss and loss adjustment expenses 1,184 1,270 1,330 1,346 5,032 5,130 Underwriting expenses 496 496 535 549 1,861 2,076 Dividends to policyholders 9 17 14 17 38 57 ----------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (1) $ - $ 31 $ 39 $ (532) $ 69 - -------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 57.8 59.4 58.2 57.0 65.2 58.1 ----------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.2 11.9 11.3 11.9 13.4 11.8 Expenses 29.4 27.8 28.0 28.2 29.1 28.3 ----------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 41.7 39.7 39.3 40.1 42.5 40.2 ----------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.5 0.9 0.8 0.8 0.6 0.8 ----------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 100.0 100.1 98.3 98.0 108.3 99.1 - -------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 1.2 2.6 1.1 0.8 8.1 1.4 - -------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 98.8 97.5 97.2 97.2 100.2 97.6 - --------------------------------------------------------------------------------------------------------------------------
[1] Includes impact of September 11 of 5.4 in the loss ratio, 1.0 in the loss adjustment expense ratio, 0.2 in the expense ratio and 6.6 in the combined ratio. PC-3b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY BUSINESS INSURANCE UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 990 $ 974 $ 987 $ 1,006 $ 3,412 $ 3,957 Change in reserve 110 77 40 34 286 261 --------------------------------------------------------------------------------------------------------------------- Earned premiums 880 897 947 972 3,126 3,696 Loss and loss adjustment expenses 598 561 595 586 1,962 2,340 Underwriting expenses 268 279 310 317 1,022 1,174 Dividends to policyholders 7 7 8 2 48 24 --------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 7 $ 50 $ 34 $ 67 $ 94 $ 158 - ------------------------------------------------------------------------------------------------------------------------ GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 55.0 49.8 50.6 48.2 50.7 50.8 --------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.9 12.8 12.4 12.0 12.0 12.5 Expenses 30.5 31.0 32.7 32.7 32.7 31.8 --------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 43.4 43.8 45.1 44.7 44.7 44.3 --------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.8 0.8 0.8 0.2 1.5 0.6 --------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 99.2 94.4 96.4 93.1 97.0 95.7 - ------------------------------------------------------------------------------------------------------------------------ Catastrophe ratio 4.6 2.5 3.2 0.7 0.8 2.7 - ------------------------------------------------------------------------------------------------------------------------ COMBINED RATIO BEFORE CATASTROPHES 94.6 91.9 93.3 92.4 96.2 93.0 - ------------------------------------------------------------------------------------------------------------------------
PC-4a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY BUSINESS INSURANCE UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 825 $ 835 $ 867 $ 885 $ 2,871 $ 3,412 Change in reserve 93 69 72 52 241 286 ---------------------------------------------------------------------------------------------------------------------- Earned premiums 732 766 795 833 2,630 3,126 Loss and loss adjustment expenses 466 497 489 510 1,934 1,962 Underwriting expenses 244 247 260 271 872 1,022 Dividends to policyholders 7 15 13 13 34 48 ---------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 15 $ 7 $ 33 $ 39 $ (210) $ 94 - ------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 51.6 53.3 50.1 48.2 59.9 50.7 ---------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.0 11.5 11.5 13.0 13.7 12.0 Expenses 33.4 32.2 32.7 32.6 33.2 32.7 ---------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 45.4 43.7 44.2 45.6 46.9 44.7 ---------------------------------------------------------------------------------------------------------------------- Policyholder dividends 1.0 2.0 1.6 1.6 1.3 1.5 ---------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 98.0 99.0 95.9 95.4 108.0 97.0 - ------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 0.6 1.3 0.7 0.4 10.0 0.8 - ------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 97.3 97.7 95.2 95.0 98.0 96.2 - -------------------------------------------------------------------------------------------------------------------------
PC-4b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY PERSONAL LINES UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 770 $ 854 $ 845 $ 803 $ 3,050 $ 3,272 Change in reserve (2) 69 40 (16) 66 91 ----------------------------------------------------------------------------------------------------------------------- Earned premiums 772 785 805 819 2,984 3,181 Loss and loss adjustment expenses 540 602 583 593 2,319 2,318 Underwriting expenses 176 175 182 200 696 733 ----------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 56 $ 8 $ 40 $ 26 $ (31) $ 130 - -------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 58.4 65.6 61.4 60.8 66.1 61.6 ----------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 11.3 11.3 11.0 11.8 11.6 11.3 Expenses 23.0 22.2 22.6 24.3 23.3 23.0 ----------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 34.2 33.5 33.6 36.1 35.0 34.4 ----------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 92.7 99.0 95.1 96.8 101.0 95.9 - -------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 1.4 8.2 4.2 2.7 2.5 4.1 - -------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 91.3 90.8 90.8 94.2 98.6 91.8 - -------------------------------------------------------------------------------------------------------------------------- GAAP COMBINED RATIO Automobile 96.1 98.0 95.9 101.9 103.1 98.0 Homeowners 80.8 102.9 92.1 80.1 93.8 88.8 ----------------------------------------------------------------------------------------------------------------------- TOTAL 92.7 99.0 95.1 96.8 101.0 95.9 - --------------------------------------------------------------------------------------------------------------------------
PC-5a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY PERSONAL LINES UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 726 $ 789 $ 779 $ 756 $ 2,860 $ 3,050 Change in reserve 8 47 21 (10) 113 66 ------------------------------------------------------------------------------------------------------------------------- Earned premiums 718 742 758 766 2,747 2,984 Loss and loss adjustment expenses 550 591 594 584 2,173 2,319 Underwriting expenses 176 171 173 176 649 696 ------------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (8) $ (20) $ (9) $ 6 $ (75) $ (31) - ---------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 65.0 67.5 67.0 64.8 67.4 66.1 ------------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 11.8 12.2 11.1 11.4 11.7 11.6 Expenses 24.4 23.0 23.0 22.9 23.6 23.3 ------------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 36.2 35.2 34.1 34.3 35.3 35.0 ------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 101.2 102.7 101.1 99.2 102.7 101.0 - ---------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 2.2 4.8 1.9 1.0 2.7 2.5 - ---------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 98.9 97.9 99.3 98.1 100.0 98.6 - ---------------------------------------------------------------------------------------------------------------------------- GAAP COMBINED RATIO Automobile 103.6 102.9 101.2 104.6 105.8 103.1 Homeowners 92.5 102.0 100.7 80.6 92.1 93.8 ------------------------------------------------------------------------------------------------------------------------- TOTAL 101.2 102.7 101.1 99.2 102.7 101.0 - ----------------------------------------------------------------------------------------------------------------------------
PC-5b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY SPECIALTY COMMERCIAL UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 406 $ 399 $ 469 $ 338 $ 1,362 $ 1,612 Change in reserve 51 44 35 (76) 140 54 ----------------------------------------------------------------------------------------------------------------------- Earned premiums 355 355 434 414 1,222 1,558 Loss and loss adjustment expenses 265 240 366 311 849 1,182 Underwriting expenses 82 88 112 74 358 356 Dividends to policyholders 3 2 2 3 9 10 ----------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 5 $ 25 $ (46) $ 26 $ 6 $ 10 - -------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 60.3 56.4 72.6 59.1 57.6 62.5 ----------------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 14.9 10.7 11.7 15.8 11.8 13.3 Expenses 22.6 25.3 25.9 17.9 29.3 22.9 ----------------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 37.4 36.0 37.6 33.7 41.1 36.2 ----------------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.7 0.7 0.6 0.7 0.7 0.7 ----------------------------------------------------------------------------------------------------------------------- COMBINED RATIO 98.4 93.2 110.7 93.5 99.4 99.3 - -------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 0.9 2.5 2.5 1.0 0.5 1.7 - -------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 97.5 90.7 108.2 92.5 98.9 97.6 - --------------------------------------------------------------------------------------------------------------------------
PC-6a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY SPECIALTY COMMERCIAL UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 300 $ 345 $ 383 $ 334 $ 989 $ 1,362 Change in reserve 62 70 26 (18) (33) 140 ------------------------------------------------------------------------------------------------------------------------ Earned premiums 238 275 357 352 1,022 1,222 Loss and loss adjustment expenses 168 182 247 252 925 849 Underwriting expenses 76 78 102 102 340 358 Dividends to policyholders 2 2 1 4 4 9 ------------------------------------------------------------------------------------------------------------------------ UNDERWRITING RESULTS $ (8) $ 13 $ 7 $ (6) $ (247) $ 6 - --------------------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 55.6 54.7 57.8 61.0 73.1 57.6 ------------------------------------------------------------------------------------------------------------------------ Loss adjustment expenses 14.0 12.2 11.4 10.4 17.6 11.8 Expenses 32.5 28.4 28.1 29.1 33.1 29.3 ------------------------------------------------------------------------------------------------------------------------ EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 46.5 40.6 39.6 39.5 50.7 41.1 ------------------------------------------------------------------------------------------------------------------------ Policyholder dividends 0.7 0.6 0.5 1.0 0.4 0.7 ------------------------------------------------------------------------------------------------------------------------ COMBINED RATIO 102.8 96.0 97.8 101.5 124.2 99.4 - --------------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 0.0 0.3 0.5 1.0 17.9 0.5 - --------------------------------------------------------------------------------------------------------------------------- COMBINED RATIO BEFORE CATASTROPHES 102.8 95.7 97.4 100.5 106.3 98.9 - ---------------------------------------------------------------------------------------------------------------------------
PC-6b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OTHER OPERATIONS UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2002 2003 -------- -------- -------- -------- -------- -------- GAAP UNDERWRITING RESULTS Written premiums $ 281 $ (93) $ 17 $ 19 $ 760 $ 224 Change in reserve 122 (162) (65) (41) (22) (146) -------------------------------------------------------------------------------------------------------------------------- Earned premiums 159 69 82 60 782 370 Loss and loss adjustment expenses 2,758 138 78 112 740 3,086 Underwriting expenses 52 20 26 26 262 124 -------------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (2,651) $ (89) $ (22) $ (78) $ (220) $ (2,840) - -----------------------------------------------------------------------------------------------------------------------------
PC-7a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OTHER OPERATIONS UNDERWRITING RESULTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2001 2002 ----- ----- ----- ----- ------------ ------ GAAP UNDERWRITING RESULTS Written premiums $ 232 $ 190 $ 176 $ 162 $ 866 $ 760 Change in reserve 43 (3) (21) (41) (2) (22) ---------------------------------------------------------------------------------------- Earned premiums 189 193 197 203 868 782 Loss and loss adjustment expenses 174 182 175 209 1,114 740 Underwriting expenses 59 67 68 68 261 262 ---------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (44) $ (56) $ (46) $ (74) $ (507) $ (220) - -------------------------------------------------------------------------------------------------------
PC-7b THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY AND CASUALTY CONSOLIDATED INCOME STATEMENTS
1Q 2Q 3Q 4Q 2003 2003 2003 2003 ------- ------- ------- ------- Earned premiums $ 2,166 $ 2,106 $ 2,268 $ 2,265 Net investment income [1] 281 286 297 308 Other revenues 95 113 110 110 Net realized capital gains (losses) [1] (1) 212 19 23 - --------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 2,541 2,717 2,694 2,706 Benefits, claims and claim adjustment expenses [2] 4,161 1,541 1,622 1,602 Amortization of deferred policy acquisition costs 401 382 431 428 Insurance operating costs and expenses 187 189 209 194 Other expenses [3] 133 203 139 159 - --------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 4,882 2,315 2,401 2,383 INCOME (LOSS) BEFORE INCOME TAXES (2,341) 402 293 323 Income tax expense (benefit) (846) 107 75 86 - --------------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) (1,495) 295 218 237 Less: Net realized capital gains (losses), after-tax [1] - 138 12 15 Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 3 3 3 3 - --------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [2] [3] $(1,492) $ 160 $ 209 $ 225 Total Property & Casualty effective tax rate - net income NM 26.9% 25.1% 26.9% Total Property & Casualty effective tax rate - operating income NM 18.4% 24.6% 26.3% - ---------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2002 2003 ------- ------- Earned premiums $ 8,114 $ 8,805 Net investment income [1] 1,060 1,172 Other revenues 356 428 Net realized capital gains (losses) [1] (68) 253 - ------------------------------------------------------------------------------------------------------- TOTAL REVENUES 9,462 10,658 Benefits, claims and claim adjustment expenses [2] 5,870 8,926 Amortization of deferred policy acquisition costs 1,613 1,642 Insurance operating costs and expenses 782 779 Other expenses [3] 542 634 - ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 8,807 11,981 INCOME (LOSS) BEFORE INCOME TAXES 655 (1,323) Income tax expense (benefit) 112 (578) - ------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) 543 (745) Less: Net realized capital gains (losses), after-tax [1] (44) 165 Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 10 12 - ------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [2] [3] $ 597 $ (898) Total Property & Casualty effective tax rate - net income 17.0% NM Total Property & Casualty effective tax rate - operating income 19.0% NM - -------------------------------------------------------------------------------------------------------
[1] Reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). [2] The quarter ended March 31, 2003 includes the impact of 2003 asbestos reserve addition of $2,604 before-tax and $1,701 after-tax. [3] The quarter ended June 30, 2003 includes severance costs of $41 before-tax and $27 after-tax. PC-8a THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY AND CASUALTY CONSOLIDATED INCOME STATEMENTS
1Q 2Q 3Q 4Q 2002 2002 2002 2002 ------- ------- ------- ------- Earned premiums $ 1,877 1,976 $ 2,107 $ 2,154 Net investment income [1] 251 268 257 284 Other revenues 81 88 88 99 Net realized capital gains (losses) [1] 11 (43) (37) 1 - ------------------------------------------------------------------------------------------------------------------------ TOTAL REVENUES 2,220 2,289 2,415 2,538 Benefits, claims and claim adjustment expenses 1,358 1,452 1,505 1,555 Amortization of deferred policy acquisition costs 403 402 405 403 Insurance operating costs and expenses 161 178 212 231 Other expenses [2] 113 129 144 156 - ------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 2,035 2,161 2,266 2,345 INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES 185 128 149 193 Income tax expense (benefit) 38 19 21 34 - ------------------------------------------------------------------------------------------------------------------------ INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 147 109 128 159 Cumulative effect of accounting changes, after-tax - - - - - ------------------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) 147 109 128 159 Less: Net realized capital gains (losses), after-tax [1] 8 (28) (25) 1 Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 2 2 4 2 Less: Cumulative effect of accounting changes, after-tax - - - - - ------------------------------------------------------------------------------------------------------------------------ OPERATING INCOME [2] $ 141 $ 139 $ 157 $ 160 Total Property & Casualty effective tax rate - net income 20.7% 15.1% 12.7% 17.9% Total Property & Casualty effective tax rate - operating income 20.1% 20.2% 17.9% 18.1% - ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2001 2002 ------- ------- Earned premiums $ 7,267 $ 8,114 Net investment income [1] 1,042 1,060 Other revenues 363 356 Net realized capital gains (losses) [1] (92) (68) - ------------------------------------------------------------------------------------------------------- TOTAL REVENUES 8,580 9,462 Benefits, claims and claim adjustment expenses 6,146 5,870 Amortization of deferred policy acquisition costs 1,572 1,613 Insurance operating costs and expenses 588 782 Other expenses [2] 455 542 - ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 8,761 8,807 INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES (181) 655 Income tax expense (benefit) (182) 112 - ------------------------------------------------------------------------------------------------------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 1 543 Cumulative effect of accounting changes, after-tax (8) - - ------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) (7) 543 Less: Net realized capital gains (losses), after-tax [1] (68) (44) Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax [1] 7 10 Less: Cumulative effect of accounting changes, after-tax (8) - - ------------------------------------------------------------------------------------------------------- OPERATING INCOME [2] $ 76 $ 597 Total Property & Casualty effective tax rate - net income NM 17.0% Total Property & Casualty effective tax rate - operating income NM 19.0% - -------------------------------------------------------------------------------------------------------
[1] Reflects the reclassification of periodic net coupon settlements on non-qualifying derivatives from net investment income to net realized capital gains (losses). [2] Full Year 2001 includes restructuring charges of $15 before-tax and $10 after-tax. PC-8b CORPORATE THE HARTFORD FINANCIAL SERVICES GROUP, INC. CORPORATE CONSOLIDATED INCOME STATEMENTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2003 2003 2003 2003 2003 2002 ---- ----- ----- ----- ------ ----- Earned premiums $ - $ - $ - $ - $ - $ - Fee income - - - - - - Net investment income 4 6 5 5 20 20 Other revenues - (3) - - (3) - Net realized capital gains (losses) - - - - - - - ------------------------------------------------------------------------------------------------------------------------ TOTAL REVENUES 4 3 5 5 17 20 Benefits, claims and claim adjustment expenses 1 2 1 2 6 6 Amortization of deferred policy acquisition costs and present value of future profits - - - - - - Insurance operating costs and expenses - - - - - - Interest expense 66 69 70 66 271 265 Other expenses 6 8 18 1 33 15 - ------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 73 79 89 69 310 286 INCOME (LOSS) BEFORE INCOME TAXES (69) (76) (84) (64) (293) (266) Income tax expense (benefit) (24) (26) (29) (23) (102) (93) - ------------------------------------------------------------------------------------------------------------------------ INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (45) (50) (55) (41) (191) (173) Cumulative effect of accounting change, net of tax - - - - - - - ------------------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) (45) (50) (55) (41) (191) (173) Less: Net realized capital gains (losses), after-tax - - - - - - Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax - - - - - - - ------------------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) $(45) $ (50) $ (55) $ (41) $ (191) $(173) - ------------------------------------------------------------------------------------------------------------------------
CO-1 THE HARTFORD FINANCIAL SERVICES GROUP, INC. CORPORATE CONSOLIDATED INCOME STATEMENTS
YEAR ENDED 1Q 2Q 3Q 4Q DECEMBER 31, 2002 2002 2002 2002 2002 2001 ---- ----- ----- ----- ----- ----- Earned premiums $ - $ - $ - $ - $ - $ - Fee income - - - - - - Net investment income 4 5 5 6 20 18 Other revenues - - - - - - Net realized capital gains (losses) - - - - - - - ------------------------------------------------------------------------------------------------------------------------ TOTAL REVENUES 4 5 5 6 20 18 Benefits, claims and claim adjustment expenses 1 2 2 1 6 7 Amortization of deferred policy acquisition costs and present value of future profits - - - - - - Insurance operating costs and expenses - - - - - - Interest expense 66 65 67 67 265 295 Other expenses [1] 4 3 2 6 15 63 - ------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 71 70 71 74 286 365 INCOME (LOSS) BEFORE INCOME TAXES (67) (65) (66) (68) (266) (347) Income tax expense (benefit) (24) (22) (24) (23) (93) (108) - ------------------------------------------------------------------------------------------------------------------------ INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (43) (43) (42) (45) (173) (239) Cumulative effect of accounting change, net of tax - - - - - - - ------------------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) (43) (43) (42) (45) (173) (239) Less: Net realized capital gains (losses), after-tax - - - - - - Add: Periodic net coupon settlements on non-qualifying derivatives, after-tax - - - - - - - ------------------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) $(43) $ (43) $ (42) $ (45) $(173) $(239) - ------------------------------------------------------------------------------------------------------------------------
[1] 2001 includes amortization of goodwill. CO-2 -----END PRIVACY-ENHANCED MESSAGE-----