The Hartford 2009 Annual Report Download - page 79

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Other, net • Other, net losses for the year ended December 31, 2009 primarily resulted in net losses of $463 on credit
derivatives where the Company purchased credit protection due to credit spread tightening, $400 related to net
additions to valuation allowances on impaired mortgage loans, and approximately $300 from contingent
obligations associated with the Allianz transaction. These losses were partially offset by gains of $155 on credit
derivatives that assume credit risk due to credit spread tightening, as well as $140 from a change in spot rates
related to transactional foreign currency predominately on the internal reinsurance of the Japan variable annuity
business, which is offset in accumulated other comprehensive income (loss) (“AOCI”).
• Other, net losses for the year ended December 31, 2008 were primarily due to net losses of $291 related to
transactional foreign currency losses predominately on the internal reinsurance of the Japan variable annuity
business, which is offset in AOCI, resulting from appreciation of the Yen, as well as credit derivative losses of
$312 due to significant credit spread widening. Also included were derivative related losses of $46 due to
counterparty default related to the bankruptcy of Lehman Brothers Holdings Inc.
• Other, net losses for the year ended December 31, 2007 were primarily driven by the change in value of non-
qualifying derivatives due to credit spread widening, as well as fluctuations in interest rates and foreign
currency exchange rates.