The Hartford 2008 Annual Report Download - page 428

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. Goodwill and Other Intangible Assets
The carrying amount of goodwill allocated to reporting segments as of December 31 is shown below.
Life 2008 2007
Retail $ 159 $ 581
Individual Life 224 224
Retirement Plans 79 —
Total Life 462 805
Property & Casualty
Personal Lines 119 119
Specialty Commercial 30 30
Total Property & Casualty 149 149
Corporate 449 772
Total Goodwill $ 1,060 $ 1,726
In 2008, the Company completed three acquisitions that resulted in additional goodwill of $79 in the Retirement Plans
reporting unit.
The Company’s interim goodwill impairment test performed in accordance with SFAS No. 142 “Goodwill and Other
Intangible Assets”, and in connection with the preparation of our year end 2008 financial statements, resulted in a pre-tax
impairment charge of $422 in the Individual Annuity reporting unit within Retail and $323 within the Individual Annuity
and International reporting units of Corporate. Goodwill within Corporate is primarily attributed to the Company’s
“buy-back” of Life in 2000 and is allocated to the various Life reporting units. The impairment charges taken in 2008 were
primarily due to the Company’s estimate of the International and Individual Annuity reporting units’ fair values falling
significantly below the related book values. The fair values of these reporting units declined as the statutory capital and
surplus risks associated with the death and living benefit guarantees sold with products offered by these reporting units
increased. These concerns had a comparable impact on the Company’s share price. The determination of fair values for the
Individual Annuity and International reporting units incorporated multiple inputs including discounted cash flow
calculations, market participant assumptions and the Company’s share price. No goodwill impairment charges were
recorded in 2007.
The following table shows the Company’s acquired intangible assets that continue to be subject to amortization and
aggregate amortization expense, net of interest accretion, if any. Acquired intangible assets are included in other assets in the
consolidated balance sheet. Except for goodwill, the Company has no intangible assets with indefinite useful lives.
2008 2007
Gross Carrying Accumulated Net Gross Carrying Accumulated Net
Acquired Intangible Assets Amount Amortization Amount Amortization
Renewal rights $ 22 $ 21 $ 22 $ 20
Distribution agreement 70 11 70 5
Servicing intangibles 14 1 — —
Other 15 14 14 14
Total Acquired Intangible Assets $ 121 $ 47 $ 106 $ 39
In 2008, the Company completed three acquisitions that resulted in additional acquired intangible assets of $15 in servicing
intangibles and other.
Net amortization expense for the years ended December 31, 2008, 2007 and 2006 was $8, $9 and $6, respectively, and
included in other expense in the consolidated statement of operations. As of December 31, 2008, the weighted average
amortization period was 7 years for renewal rights, 13 years for distribution agreement, 20 years for servicing intangibles,
5 years for other and 11 years for total acquired intangible assets.
F-63
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009