12. Discontinued Operations

On May 22, 2011, the Company announced a definitive merger agreement with CenterState Banks, Inc. (“CBI”), pursuant to which Federal Trust Corporation (“FTC”), a wholly owned subsidiary of the Company, will be merged with and into CBI, and Federal Trust Bank (“FTB”), a federally chartered, FDIC-insured thrift and wholly owned subsidiary of FTC, will be merged with and into CenterState Bank of Florida, N.A. (“CenterState Bank”), a wholly owned subsidiary of CBI. The mergers, which are subject to regulatory approval and customary closing conditions, are expected to close in the fourth quarter of 2011. At the time of the mergers, FTC and FTB will hold net assets including cash, certain mortgage loans, property and other assets equivalent to liabilities assumed including deposits and other liabilities, totaling approximately $240. The Company recorded an after-tax charge of $74 in the second quarter of 2011 related to the divestiture, including the write off of remaining goodwill of $10, after-tax, and losses on certain FTC and FTB assets and liabilities which will not be transferred to CenterState. The Company simultaneously engaged in activities to purchase certain assets and assume certain liabilities from FTC and FTB that were not part of the transactions with CBI and CenterState Bank. The Company anticipates disposing of these assets and liabilities within twelve months after closing, and thus any income or expense related to these assets and liabilities will be temporary in nature. FTC is included in the Corporate and Other category for segment reporting.

In the first quarter of 2011, the Company completed the sale of its wholly-owned subsidiary Specialty Risk Services (“SRS”). SRS is a third-party claims administration business that provides self-insured, insured, and alternative market clients with customized claims services. The Company will continue to provide certain transition services to SRS for up to 24 months. For the six months ended June 30, 2011, the Company recorded a net realized capital gain of $150, after-tax. SRS is included in the Property & Casualty Commercial reporting segment. In addition, during the fourth quarter of 2010, the Company completed the sales of its indirect wholly-owned subsidiaries Hartford Investments Canada Corporation (“HICC”) and Hartford Advantage Investment, Ltd. (“HAIL”). HICC is included in the Mutual Funds reporting segment and HAIL is included in the Global Annuity reporting segment.

The following table summarizes the amounts related to discontinued operations in the Condensed Consolidated Statements of Operations.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
*Revenues*
Fee income	$	1		$	9		$	1		$	18
Net investment income		3			5			11			11
Net realized capital gains (losses)		(1	)		2			(5	)		—
Other revenues		—			55			47			109

Total revenues		3			71			54			138

*Benefits, losses and expenses*
Amortization of deferred policy acquisition costs and present value of future profits		—			3			—			7
Insurance operating costs and other expenses		14			66			46			130
Goodwill impairment		—			153			—			153

Total benefits, losses and expenses		14			222			46			290
Income (loss) before income taxes		(11	)		(151	)		8			(152	)
Income tax expense (benefit)		(5	)		(52	)		2			(52	)

Income (loss) from operations of discontinued operations, net of tax		(6	)		(99	)		6			(100	)
Net realized capital gain (loss) on disposal, net of tax		(74	)		—			76			—

Income (loss) from discontinued operations, net of tax	$	(80	)	$	(99	)	$	82		$	(100	)