The Hartford 2008 Annual Report Download - page 284

Table of Contents
December 31, 2007
AAA AA A BBB BB and Below Total
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value Cost Value
2003 & Prior $ 378 $ 320 $ 88 $ 73 $ 64 $ 42 $ 13 $ 10 $ — $ — $ 543 $ 445
2004 170 149 17 15 24 17 8 7 — — 219 188
2005 178 153 63 52 60 42 6 5 — — 307 252
2006 517 436 178 136 149 118 46 34 — — 890 724
2007 107 97 92 80 72 58 13 10 — — 284 245
Total $ 1,350 $ 1,155 $ 438 $ 356 $ 369 $ 277 $ 86 $ 66 $ — $ — $ 2,243 $ 1,854
Credit
protection 31.5% 27.1% 16.7% 10.4% — 27.5%
[1] The vintage year represents the year that the underlying collateral in the pool was originated. Individual CDO market
value is allocated by the proportion of collateral within each vintage year.
[2] As of December 31, 2008, approximately 36% of the underlying CMBS CRE CDO collateral are seasoned, below
investment grade securities.
[3] For certain CDOs, the collateral manager has the ability to reinvest proceeds that become available, primarily from
collateral maturities. The increase in the 2008 vintage year represents reinvestment under these CDOs.
[4] The credit qualities above include downgrades since December 31, 2007.
CMBS — IOs [1]
December 31, 2008 December 31, 2007
AAA AAA
Amortized Fair Amortized Fair
Cost Value Cost Value
2003 & Prior $ 440 $ 423 $ 548 $ 606
2004 268 199 360 374
2005 354 245 422 430
2006 165 104 194 205
2007 169 109 217 216
Total $ 1,396 $ 1,080 $ 1,741 $ 1,831
[1] The vintage year represents the year the pool of loans was originated.
In addition to commercial mortgage backed securities, the Company has whole loan commercial real estate investments. The
carrying value of mortgage loans on real estate was $6.5 billion and $5.4 billion as of December 31, 2008 and 2007,
respectively. The Company’s mortgage loans are collateralized by a variety of commercial and agricultural properties. The
mortgage loans are diversified both geographically throughout the United States and by property type.
At December 31, 2008, the Company held delinquent mortgage loans on three properties with a carrying value of $91 which
were deemed impaired and accordingly, a valuation allowance of $26 was established. At December 31, 2007, the Company
held no impaired, restructured, delinquent or in-process-of-foreclosure mortgage loans and therefore had no valuation
allowance.
The following table presents commercial mortgage loans by region and property type.
Commercial Mortgage Loans on Real Estate by Region
December 31, 2008 December 31, 2007
Carrying Percent of Carrying Percent of
Value Total Value Total
East North Central $ 162 2.5% $ 120 2.2%
East South Central — — 9 0.2%
Middle Atlantic 717 11.1% 674 12.4%
Mountain 223 3.4% 200 3.7%
New England 487 7.5% 404 7.5%
Pacific 1,495 23.1% 1,200 22.2%
South Atlantic 1,102 17.0% 1,104 20.4%
West North Central 64 1.0% 32 0.6%
West South Central 333 5.2% 286 5.3%
Other [1] 1,886 29.2% 1,381 25.5%
Total $ 6,469 100.0% $ 5,410 100.0%
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009